PROF. DR. HARALD ROBERT BRUCH: I BELIEVE THE WORLD ECONOMY WILL RECOVER FROM THE COVID CRISIS IN TWO YEARS
15 May 2020
Prof. Dr. Harald Robert Bruch - leading lecturer of Infectious Diseases at the University of Seville, Spain and the University of Bonn, Germany and a renowned German hematologist and economist, delivered a public lecture to students and faculty at Varna Free University "Chernorizets Hrabar" on "Economic and Medical Aspects in the Light of the Spread of COVID 19 in Europe". The lecture was held with great interest in the virtual auditorium of the university. In a particularly attractive way, Prof. Bruch analyzed COVID 19 and its distribution in Bulgaria and Germany, not missing the comparison between the two countries. As a professor at the University of Seville, he also gave examples from Spain.The professor explained what is important to know and how to protect ourselves from the disease that has caused an unprecedented global pandemic in our century.
"Bulgaria has a low number of deaths compared to Italy," said Prof. Bruch. "The problem is like an iceberg - if we don't test a lot, we won't know the number of cases and we won't know what the real mortality rate is."
Prof. Bruch cited the long-term forecast of Harvard Medical School according to which in the next 2 to 3 years up to 2/3 of the world's population will be infected. "There is no guarantee that the climate will be the only factor in improving the situation," he added.
According to the leading scientist, so far about 3% immunity has been built in society and it is not certain how much and for what period of time it would protect us. We can flatten the contagion curve through social distancing - that is, we will support the health and social system - the number of those infected will not exceed the capacity of the health care system.
The spread of the disease has a major impact on the economy. The global economic crisis has hit the whole world, the German scientist shared in his lecture. And the world is connected - it interacts and exists through import and export. Prof. Bruch gave the example of Germany, where in March exports fell by 8%, companies slowed down; people have no income if they have lost their jobs. The state has no money, companies have no money, the financial sector is in a bad situation.
It is very difficult to make forecasts, commented Prof. Bruch, but people hope that the crisis will end after the end of the summer and the economy will begin to recover quickly. The stock market collapsed during a pandemic. The gold market is rising. The recovery of the stock market can be expected only after the crisis is overcome.
States are taking various emergency measures. "In Germany, we have given money to companies to stabilise corporate liquidity, financial market liquidity and reduced taxes for companies, short-term employment measures have been introduced. The self-employed are financed - 9,000 euros each, and if a company has up to 50 employees, it receives 25,000 euros. This happened within a week, very atypical of a bureaucratic system. Even hospitals are protected by a hospital shield - they receive money when increasing the number of beds in intensive care units - 50,000 euros per bed and money for protective equipment, "said the professor.
According to him, there are three possible scenarios to get the global economy out of the crisis with COVID:
- The first possible scenario that I believe in, said Prof. Bruch, is that the worst is over or will be over by early July. The economy will recover quickly, it will start producing and supplying goods again, there will be no disruption in the supply chain. And while a recession is possible, the world economy will return to normal in a period of one to two years.
- The second scenario is that the virus does not pass for a year, it will continue to spread if restrictions are relaxed in the second half of the year. There will be a strategy of "opening - closing", there will be stronger and weaker companies, the stronger ones will survive, there will probably be new models, maybe the state will support some companies and the gross product may fall initially, but then it will rise again, the unemployment rate will fall to the bottom and then it will be possible to control in the next 12 months.
- The third scenario is related to a global pandemic response in the next 12 to 24 months. Over time, countries will embark on increasingly coordinated action - the European Union has begun such coordination - on the development of $ 8 billion worth of vaccines. "Tourism is also suffering greatly, but I think it will start working at the end of this year. And yes, there will be a global recession, but it will be overcome in a few months, even just a year, in my opinion, "concluded Prof. Bruch.
He recalled the words of the Nobel laureate Joshua Lederberg, who said that our resourcefulness, our intelligence, would stand up to "their genes," meaning the virus under their genes. The epidemic of COVID 19 is an unprecedented threat to our health and economy, to politics, to people, to all of you, and it may last a long time, but if we use our intelligence and we all do, we have a chance to overcome it.