Before 2020, the economy was booming through globalization. Where individuals (aka the consumer) could easily exit their home and move which allows trade to occur. Travel allows trade and trading is essential to life.
In the Neolithic Age, the Tabon Caves are the oldest habitation in the Philippines that dates back to approximately 50,000 years ago. The site uncovered possible the oldest Homo Sapien fossil evidence in Southeast Asia along with burial jars, earthenware, jade ornaments and other jewellrey, stone tools, animal bones and human fossils date back to 47,000 year BP (according to UNESCO).
This, along with other territorial principalities in both Insular and Mainland Southeast Asia, characterised as Agrarian kingdoms had by around 500 BCE developed an economy based on surplus crop cultivation and moderate coastal trade of domestic natural products.
We need each other to survive, but at present, people have not been able to leave their household in fear of catching the coronavirus resulting in less consumer spending. How does this mess up the economy? Well, let’s break it down:
AD = C + I + G + X – M
AD = Aggregate Demand – the total planned expenditure in an economy.
Aggregate Demand is composed of various factors C, I, G, X – M
- C= Consumer spending
- I = Investment (Gross Fixed Capital Formation)
- G= Government Spending
- X= Exports
- M= Imports
| Before COVID-19 | During COVID-19 |
| High Consumer Spending Property and Real-Esate Investments Blooming Stock Market Business paying Taxes Causing Government to earn and invest into infrastructure and transportation development and services Leading to larger quantities of Export and Import | Less Consumer Spending at Physical Establishments Causing the Property Market to decline Risky Stock Market Business with unpaid taxes and in need of government support causing higher expenditures from the government to support businesses, citizens and demand Export and Import exists Digital Market Develops |
Reference List: Economics Help, Perfect Order: Recognizing Complexity in Bali, UNESCO World Heritage Site Tabon Caves
Where do we go from here? You would have to gather the courage within your spirit to push forward in these times. With that, explore the e-commerce world, consider your local community and utilise this time to reflect on where and what you truly want in this lifetime. With will-power and grit, we can all bounce back from here.
For example, companies are moving towards innovating warehouses through robotic systems to catalogue and sort, agricultural farms are feeding vegetation through drone and helicopter sprinklers, and the list goes on.
This is a time to see how can you take advantage of the situation and contribute towards our society as a whole. No situation is perfect but if you look on the bright side and work with your resources, only together we can all go forward. The power of people.
Raine Baljak 