The Socioeconomic Impact of COVID-19 on Eastern European Countries

Rafał Wisła, Paweł Dykas

• Publisher: Routledge
• Year: 2021
• ISBN:
  9781000513875
• Edition: 1
• Topic: Economics
• Subtopic: Macroeconomics
• Index: Economics

The year 2020 went down in economic history due to the dramatic and drastic changes in economic and social conditions that resulted from the outbreak of the global pandemic of COVID-19. This book offers a multi-level narrative about the pandemic, written from national and international perspectives, enabling the authors to construct several macro- and mega-scenarios.

The book consists of six chapters. Four of them discuss the process of the COVID-19 pandemic caused by the SARS-CoV-2 virus in Europe in 2020, i.e. the directions and dynamics of the spread and its socioeconomic consequences, and provide a comparative analysis of fiscal and monetary packages employed by Europe, with an emphasis on Eastern European countries. The remaining two chapters contain forecasts and scenarios. The fifth chapter, dedicated to forecasts, provides readers with a comprehensive description of possible consequences of any epidemic leading to severe social losses such as high percentages of infected and dead, limited interpersonal contacts as a result of lockdown, a lowered level of general individual and social well-being, as well as economic losses, for example a decline in production as a result of the collapse of aggregate demand and a reduction in the supply capacity of the economy, consequently slowing down the pace of capital accumulation. The sixth, final chapter describes possible scenarios of the spread of the pandemic in Poland and Ukraine, depending on measures taken by the governments of those countries.

The Socioeconomic Impact of COVID-19 on Eastern European Countries is designed as a practical reference for scholars, researchers and policymakers.

The Open Access version of this book, available at www.taylorfrancis.com, has been made available under a Creative Commons Attribution-Non Commercial-No Derivatives 4.0 license.

1 The coronavirus SARS-CoV-2 and its impact on the world

Andrzej Nowosad, Ümit Turanli, and Katarzyna Lorenc

DOI: 10.4324/9781003211891-1

1.1 Introduction

Severe acute respiratory syndrome coronavirus (SARS-CoV-2)¹ (Gorbalenya et al. 2020: 536) is the virus that causes the coronavirus disease 2019 (COVID-19), the respiratory illness responsible for the COVID-19 pandemic (BBC: February 11, 2020).² The World Health Organization (WHO) declared the disease a Public Health Emergency of International Concern on January 30, 2020 and a pandemic on March 11, 2020 (WHO: January 30, 2020; WHO: March 11, 2020). The last time WHO announced a pandemic was during the 2009 H1N1 outbreak³ (the 2009 swine flu pandemic), which infected nearly a quarter of the world’s population.⁴

1 SARS-CoV-2 is a positive-sense single-stranded RNA virus (Machhi et al. 2020: 359–386) and hence Baltimore class IV (Baltimore 1971) that is contagious in humans (Chan et al. 2020). As described by the US National Institutes of Health, it is the successor to SARS-CoV-1, the virus that caused the 2002–2004 SARS outbreak (NIH: March 17, 2020). 2 Colloquially known simply as ‘the coronavirus’, it was previously referred to by its provisional name, 2019 novel coronavirus (2019-nCoV) (WHO January 2020 Report; CDC ­February 11, 2020) and has also been called human coronavirus 2019 (HCoV-19 or hCoV‑19) (Andersen et al. 2020: 450–452). 3 In virology, influenza A virus subtype H1N1 (A/H1N1) is a subtype of Influenza A virus. Well-known outbreaks of H1N1 strains in humans include the 2009 swine flu pandemic as well as the 1918 flu pandemic. It is an orthomyxovirus that contains the glycoproteins haemagglutinin and neuraminidase. For this reason, they are described as H1N1, H1N2 etc. depending on the type of H or N antigens they express with metabolic synergy (Lim, Mahmood 2011). 4 The 2009 swine flu pandemic was an influenza pandemic that lasted about 19 months, from January 2009 to August 2010. The number of lab-confirmed deaths reported to the World Health Organization (WHO) is 18,449, though the 2009 H1N1 flu pandemic is estimated to have actually caused about 284,000 (range from 150,000 to 575,000) deaths.

The so-called Wuhan virus (COVID-19) spreads among people primarily through close contact and via respiratory droplets produced by coughs or sneezes, and epidemiological studies estimate each infection results in 5.7 new ones (Sanche et al. 2020). Each case of infection has an individual course of the disease. Usually, the virus causes a severe inflammation of the airways but it also affects other organs and organ systems.

As of September 8, 2021, there have been 222,903,649 total confirmed cases of SARS-CoV-2 infection during the ongoing pandemic and the number of virus infections is increasing quickly, particularly in the United Kingdom and in the United States. The total number of deaths attributed to the virus is 4,603,035 (CSSE: September 8, 2021). And although it should be noted that many recoveries from both confirmed and untested infections go unreported since some countries do not collect this data, at least 199,461,542 people have recovered from confirmed infections (CSSE: September 08, 2021). The number of confirmed cases is lower than the number of actual cases; the main reason for that is limited testing.

The large scale of the COVID-19 pandemic is causing unprecedented human and economic costs throughout the world. Trying to reduce the spread of the virus and thus the number of people infected and deceased, most state governments in the world introduced limitations for many industries and activities, which contributed to the ongoing economic decline. In this chapter, we analyze the origins, development, and current state of the COVID-19 epidemic, the ways in which the governments are trying to fight the deadly virus and the economic crisis caused by the pandemic, and the differences in perception of the threat caused by COVID-19. We also mention new challenges the world faces in 2021 as well as introduce the reader to the broad spectrum of costs of the pandemic, including the possible costs for people’s mental health.

1.2 Origin and spread of SARS-CoV-2

The origin of SARS-CoV-2 coronavirus has not yet been explained. Journal of Medical Virology (three special issues on the Novel Coronavirus (COVID-19), 2019, 2020) indicated snakes (serpentes), then bats (chiroptera), and currently Asiatic pangolins, sometimes known as scaly anteaters (manidae),⁵ as the source of the coronavirus disease. There are also a lot of theories on how the virus transferred to humans. However, none of them is coherent and reliable enough and publications on this subject are increasingly moving away from the norms of scientific literature.

5 Shou-Jiang (ed.) ‘Three special issues on the Novel Coronavirus (COVID-19)’, Journal of Medical Virology, monthly editions for years 2019–2020.

Coronavirus SARS-CoV-2 (originally called 2019-nCoV) was officially identified for the first time in the Chinese city of Wuhan (武漢市) in the province Hubei (湖北) in central China in December 2019. However, it can be assumed that it had already affected humans earlier as Spanish virologists found traces of the novel coronavirus in a sample of Barcelona wastewater collected in March 2019, nine months before the COVID-19 disease was identified in China (Reuters: June 26, 2020). But there is no reliable data on the source of the SARS-CoV-2 and the geography of its spread before it was identified in Wuhan, and this very fact caused speculations that China spread the virus around the world.

Currently, there are many hypotheses about how this dangerous virus was released – from global warming and melting glaciers to being artificially created in a military laboratory as a new kind of biological weapon. Disagreements on this topic among scientists and members of the public are accompanied by conspiracy theories pouring globally into the media, thanks to which they gain the popularity and trustworthiness of scientific theories.

The claims of virologists and “experts” are also not consistent. Some claim that they have sufficient evidence that SARS-CoV-2 coronavirus was produced naturally, in wildlife not in a laboratory, and that SARS-CoV-2 coronavirus is not suitable for biological weapons. Others say the opposite and claim that the virus has “escaped” from a Chinese laboratory (see the statement by the US President Donald Trump from May 1, 2020 (The Guardian: May 1, 2020)).⁶

6 “Donald Trump claims to have seen evidence to substantiate the unproven theory that the coronavirus originated at the Wuhan Institute of Virology, despite US intelligence agencies’ conclusion that the virus was ‘not manmade or genetically modified’. ‘We’re going to see where it comes from,’ Trump said at a White House event on Thursday. ‘We have people looking at it very, very strongly. Scientific people, intelligence people, and others. We’re going to put it all together. I think we will have a very good answer eventually. And China might even tell us.’ Pressed to explain what evidence he had seen that the virus originated in a Chinese lab, Trump responded, ‘I can’t tell you that. I’m not allowed to tell you that’” (The Guardian: May 1, 2020).

1.3 SARS, MERS and COVID-19

The human coronavirus was first identified in 1962 in a child with cold symptoms and was called B814. Since then, six species of this type of virus have appeared in the world. The most severe diseases were caused by SARS in 2003, with 812 deaths, and MERS-CoV which between 2012 and 2017 resulted in the deaths of 712 people. SARS-CoV-2 is the seventh known coronavirus that is dangerous for humans. COVID-19 does not cause high mortality compared to acute respiratory failure MERS-CoV or SARS. However, it spreads rapidly and has already caused more deaths worldwide than SARS and MERS combined.

According to Worldometer Data (WMD) (https://www.worldometers.info/coronavirus/, data collected as of December 31, 2020), there were 83,135,180 global cases of COVID-19 infection by the end of 2020, of which 1,813,389 cases resulted in humans’ death, and 58,933,056 people recovered. The coronavirus COVID-19 is affecting 218 countries and territories around the world and two international conveyances. The fatality rate is still being assessed (WMD: December 31, 2020).

When it comes to the pandemic’s development over time, as of September 08, 2021, we are expecting the fourth wave, we are experiencing the third wave of an increased number of people infected. After originally erupting in China in November and December 2019, the first worldwide wave of the COVID-19 pandemic started at the end of March 2020 and peaked in April 2020. Governmental responses across countries differed greatly at that time, from severe lockdown introduced in Italy – the country most affected among those in Europe – to the United Kingdom and Sweden who were convinced that the economic and social costs of a lockdown would be too big and decided against introducing severe restrictions, at least at the beginning. The summer of 2020 brought hope, encouraging many governments to lower restrictions and people to protest against the restrictions as the numbers of new COVID-19 cases dropped in many countries. However, in October and November 2020 it became clear that the second wave of the pandemic was inevitable. This time, similar but often less severe restrictions were introduced around the world. Spirits were kept up by the news about vaccines against the deadly virus which were already invented and during the last phases of testing. After reaching peaks in the winter of 2020, the beginnings of 2021 saw a decline in the worldwide number of new COVID-19 cases. From late December 2020, the vaccination process started as well, letting some experts believe that the COVID-19 pandemic was a thing of 2020. However, as new virus mutations appeared in the United Kingdom and South Africa and the European Union governments avoided early implementation of a new lockdown, in March 2021 the third wave of the pandemic began, leaving experts to wonder about the future (Johns Hopkins University: March 25, 2021).

Geographically, the highest number of cases of infection and death have been reported in the United States (41,206,672 total cases and 669,022 total deaths), India (33,096,718 total cases and 441,443 total deaths), Brazil (20,913,578 total cases and 584,208 total deaths), Russia (7,065,904 total cases and 189,582 total deaths), the United Kingdom (7,056,106 total cases and 133,483 deaths), France (6,854,028 total cases and 115,159 total deaths), Turkey (6,542,654 total cases and 58,651 total deaths), Argentina (5,211,801 total cases and 112,851 total deaths), Iran (5,210,978 total cases and 112,430 total deaths), Colombia (4,921,410 total cases and 125,378 total deaths), Spain (4,892,640 total cases and 85,066 total deaths), Italy (4,579,502 total cases and 129,638 total deaths), Indonesia (4,147,365 total cases and 137,782 total deaths) and Germany (4,029,849 total cases and 92,949 total deaths), Mexico (3,449,295 total cases and 264,541 total deaths), Poland (2,891,602 total cases and 75,403 total deaths), (September 08, 2021).

Moreover, it should be noted that many cases and deaths have not been statistically recorded as they have been asymptomatic, and not every country has provided reliable data on cases and deaths.

1.4 Virus denial and miscalculations

One of the biggest problems connected with the pandemic is that many countries around the world have denied the existence of the pandemic and the virus itself, or have neglected the threat. The well-known examples of such a denial include Russia, Belarus, Turkmenistan, and Azerbaijan, which even decided to organize mass sporting events during the pandemic. What is more, the US President Donald Trump, the British Prime Minister Boris Johnson, the Russian President Vladimir Putin, the Polish President Andrzej Duda, the Brazilian President Jair Bolsonaro, and the Mexican President Andres Manuel Lopez Obrador have repeatedly downplayed the coronavirus threat. This “cavalier” leadership approach as well as the lack of social safety nets and strong public health systems have worsened the crisis. The lack of an effective response to the virus’s spread in the United States, the United Kingdom, Brazil, Poland or Russia has been one of the most surprising developments of the pandemic.

With some political leaders openly neglecting the threats of the COVID-19 pandemic, s...