The global economy had not recovered from the financial crisis that hit it at the end of 2007 by the mortgage crisis, which made it more fragile until the Corona pandemic affected it again, and it will suffer in the near future from very serious social and economic disasters.
In a World Bank report issued late 2020, the World Bank concluded that the social and economic losses will be enormous, after the outbreak of the Corona Virus pandemic crisis. The World Bank expected that the focus of the losses would be in the markets of emerging countries and the developing countries as well as it will be exposed to violent economic vibrations following the end of the Corona crisis.
Dana Foresk, an economist in the Development Economics Prospects Group at the World Bank, pointed out that the emerging second world economies and developing countries will be affected because most of them suffer from weak health systems, as well as health insurance, and heavy reliance on imports, or tourism in all its forms.
Foresk said that the Gulf countries, especially Saudi Arabia, will be exposed to significant negative effects because they depend on oil as a main source of income, and they sell crude oil, which has increased their foreign debt at large rates for the first time in its history, which will make it vulnerable to major financial crises and economic pressures.
Foresk said that the negative effects of the Corona pandemic on economies will extend for the long term, especially on countries that suffer from large deficits in their balance sheets, and the oil countries will be severely affected, due to the most important reasons being the decline in oil prices, and the increase in their expenditures in order to shift from the completely oil-based system to a multiple and diverse system.
The report said that the pandemic is expected to lead to a decline in productivity growth rates that have suffered from weakness over the past ten years, and this will apply to all countries of the world, including the major industrial ones, so what about the crude trading countries with fragile economies such as the Gulf states?
As for solutions to crises, the report said that countries, especially those that depend on crude oil, led by the Kingdom of Saudi Arabia, should set for themselves comprehensive and serious reform programs to improve and develop their institutions, so as to guarantee a return, even after a while, to real economic growth based on a diversified economy, after countries have become the single resource suffers from violent economic fluctuations, especially those who depend on the tourism sector, oil, or investment in low-paid Asian labor.
The economic expert confirmed in the report that Saudi Arabia and countries like it, if the reform plan was adopted on a well-studied scientific basis, will prepare to get out of the danger and escape complete economic collapse.
