Help please

This case study will describe the situation in a country following the covid-19 pandemic. Many problems will be laid out, your job is to read and identify as many problems as you can, and using your knowledge of macro economics, creativity and help from google come up with 25 clauses.

These clauses will be direct orders, e.g., "Increase interest rate of state bank to 12%" or "Impose a 20% duty on all Imports except primary goods"

These clauses should contain commands that if implemented will solve the problems or at least attempt to do that, if implemented.

You will be judged based on how well you identify the problems from the case study, how effective and accurate your 25 clauses are, how creative you have been, and the number of problems they will solve if implemented.

This document containing these 25 clauses will be called your policy proposal.

Possible Solutions

1) IMF and World Bank can be contacted for loans but taking more than 2 billion USD will have a negative long-term impact.

2) Optimizing the growth of the natural resource industry a) Gold (need 500mil investment can make 2 bill profit) b) Other minerals ( need 2 billion investment, can make 5 billion profit) c) Fossil fuels (2 billion to explore, 3 billion to extract, 8 billion profit)

Final question focused on: Assume the pandemic situation is to prolong for 3-5 years, suggest ways in which Auromara can tackle these problems, including combatting the law situation deterioration, allocation of the budget for the vaccine, and fill in the gap between demand and supply in the global market.

REFERENCE MATERIAL:

The reason the US has been used to draw these parallels is that this is a country that projects extremities of the virus, since it was one of the countries where it spread in most, however, its resources even out its impacts, and makes it suitable to compare to any country such as Auromara. Labor Market Concern Another major hit that the country of Auromara took was the toll on its labor market. The reason such a sharp decline was seen was that after the virus spread, and symptoms of the flu and cold became overlining, people were advised to stay home and away from work, compromising the number of workers that showed up, not just that, but many workers would not return and there was a permanent decrease in the task force because of individuals not recovering from the virus and hence passing away. Besides that, many laborers also thought it credible to migrate to rural areas from urban ones, hence the shift in populace cost industries their productivity in the area, and gradually a number of factors decreased the number of laborers. BLS: 1970s BLS: 1980s BLS: 1990s BLS: 2000s BLS: 2010 Nielsen: COVID19 82020M2 Labor force participation rate 56 57 58 59 60 61 62 63 64 65 66 67 o 2020M3 52 54 56 58 60 62 64 Employment to population ratio As the graph above illustrates and reflects the situation in Auromara, the labor force, which ties back directly to employment, has decreased significantly, this is due to uncontrollable situations that COVID-19 brought, and also actions industries had to take themselves while following SOPs, where there were smaller workforces, different shifts, and so a sense of disorganization raised concerns of the productivity of these task forces. Furthermore, a social issue comes to play where workers themselves hesitated from showing up to work despite strict rules being followedbecause of a lack of awareness and understanding of the safety that was involved, and since they could not be targetted individually, this becomes a hurdle for the country of Auromara. Small Businesses Concern Additionally, small businesses were heavily impacted by the pandemic in Auromara, having to be shut down after going bankrupt amidst the drop in demand for many goods and services, as the focus of the public turned elsewhere. However this was not the only reason for their decline, it was also because they could not continue due to the lockdowns being unable to adapt to the work from home set up. This was due to a lack of prior experience and any sort of training offered that would help them get back on their feet. Together all these small businesses did contribute to the GDP and helped keep a lot of families afloat, none of which was now possible by their forced shutdowns. Impact of COVID-19 on Small Businesses According to the National Restaurant Association, 3 out of 4 small business owners surveyed said they were very concerned about the economic impacts of COVID-19 on their companies The same study found that at least 50% of respondents said they have seen a reduction in customers since the outbreak began 3/6 By June, between 5 and 7 million restaurant workers could be out of a job Source: National Restaurant Association Bankrate As depicted above, supporting the upcoming and current conditions of Auromara, many other countries too faced that in terms of their small businesses, they were closing down, or close to doing so, and if they were not closing down, they were not doing well enough, as projected above "50% of the respondents said they had seen a decrease in customers", depicting that their situations were far worse off when the pandemic started than it was before, which is critical since such funds and supported are needed now by these small business owners, than ever before. Construction Industry Concern The construction industry has been hit as well and there are very few construction projects that are still being conducted, most projects have been called off. Specifically, some impacts include a slowdown of available goods and labor through to suspensions and, in some instances,terminations of parties or entire projects. Construction activities remain in flux in some states and cities depending upon whether construction is classified as an essential business. The most immediate impact was the tap was turned off for parts of the business, and supplies to site simply stopped. Within a three- to four-day period, remote working was the norm, with some projects having to be designed from remote locations, forcing contractors to look for new ways of working to ensure productivity. Many contractors are unable to source basic materials - such as sand, cement, and bricks - while also suffering from labor shortages. While Auromara faces this as well, a similar example is seen in the UK, where a national shortage of plaster led to significantly increased costs. To further highlight Auromara's problems regarding the construction sector, the widespread surge in remote working induced by the pandemic has created various security implications for contractors. These include protecting the new connectivity options deployed, considering the security of devices outside the safety of protected office environments, and better managing bring your own device policies. Contractors have needed to think of ways to identify and authorize incoming connection requests from a range of new sources, lockdown sensitive remote workstations, and deploy endpoint protection that ensures machines are malware-free. Increased remote working has also increased reliance on collaboration tools, and cloud technology, for which security is sometimes only a secondary consideration. 35% 32%% 30% 30 3% 10 4/6 Not affected at all Slightly affected Significant reduction of Factory in closed production The chart above highlights the magnitude of the effects on various construction companies with a high 30% of them closing down, 32% decreasing in production, and only 3% being in good enough shape to survive the pandemic or maintain their previous work. This means a solid chunk of around 97% was impacted, with its productivity going down, and due to such a large number of industries being impacted the problem of unemployment was inevitable because if a factory were to close down the workers are sent home, no prehand check is provided because the company isn't in the financial position to do so, and hence, they are vulnerably left on their own.Industries and Demand Concern Due to the third wave, most industries have also been instructed to close down their factories by the health ministry of Auromara, this is specifically for those with crowded workspaces and workers, increasing transmission of the virus. Moreover, there has been a huge drop in the demand for imported goods, especially consumer goods. This should be good for the current account but there has been a simultaneous decrease in demand for goods that were exported to other countries, such means the GNP and GDP, alongside overall industry benefits, take a significant negative hit. Furthermore, momentarily all imports have been restricted. Amongst these items previously imported, there were primary as well as secondary goods vital for many industries that cannot operate without them, hence forcing them to shut down, this once again fuels the unemployment problem, and gives rise to homelessness, and other social implications that come with the problem of unemployment. Extra EU trade in goods, 2019 - 2020 (EUR billion, seasonally adjusted data) 200 150 100 50 Mat-20 May-20 Jun-20 Aug 20 Sep 20 Now-20 Trade balance -Export -Import Source Euroital (online data code, eat_it_27_2020msbec) eurostat The diagram above illustrates the decrease in exports and imports, alongside the unfavorable anomaly of trade balance as the pandemic struck, this shows how industries suffered significantly as the products required for their productivity were not supplied to them, and their sales were put a limitation to, making them vulnerable to bankruptcy, and leaving the few standing industries that were not asked by the health ministry to be shut down, to essentially close down due to this very reason, hence this remains a center of concern for the country of Auromara. Budget Allocation The country's budget allocation also poses a huge problem that needs to be considered while keeping in mind the country's internal infrastructure. With an annual budget of just over 23billion USD, the country not only faces problems pertaining to a lack of funds but also a huge budget allocation issue. According to a WHO Global Health Report, the minimum a developing country should spend on healthcare is 17.1 percent of its annual budget as opposed to the 13.04 percent (3 billion dollars) that Auromara does. This in particular becomes an issue when you take into account COVID-19. The same can be said for infrastructure (roads, public bodies, community centers, etc.). Furthermore, another problem arises with the allocation when the funds allocated to defense come to mind. Developed countries/superpowers such as Russia spend a little over 4.1 percent of their annual budget on defense, ensuring that other sectors have substantial funding to develop the country internally. Clearly, a contrast can be seen with Auromara, a third-world nation spending approximately 40 percent of its annual budget on defense, often neglecting other sectors such as education (only 25 percent of the entire budget) and environment (less than 10 percent of the entire budget). Lastly, we must consider how many other sectors are also neglected under this budget. These include projects on sustainability, foreign import/export, and developing trade relations with other countries. Revenue Taxation isn't itself a big issue as compared to its collection. Tax revenue has dropped from over 12 billion to 7 billion in less than a year and so has income from exports (3 billion to now almost 1 billion). With lack of trust towards the government-run sector, government-owned/regulated mining revenue has dropped to from 1 billion to 200 million and departments have also seen a steep decline in this (total gain 1 billion (train +200 million, buss system - 300 million, airline -700 million, steel mill -600 million, tourism was +200 million now -100 million, government-owned enterprise + 2.5 billion). Candidates are expected to come up with ideas on how to increase revenue in general as well as make current systems more efficient keeping in mind the developing situation as COVID-19 continues to ravage harm. Lastly, they must also keep in mind the import/exports from the country contribute to little less than 1 percent of the entire revenue, another aspect to be handled. Possible Solutions 1) IMF and World Bank can be contacted for loans but taking more than 2 billion USD will have a negative long-term impact. 2) Optimizing the growth of the natural resource industry a) Gold (need 500mil investment can make 2 bill profit) b) Other minerals ( need 2 billion investment, can make 5 billion profit) c) Fossil fuels (2 billion to explore, 3 billion to extract, 8 billion profit) Final question focused on: Assume the pandemic situation is to prolong for 3-5 years, suggest ways in which Auromara can tackle these problems, including combatting the law situation deterioration, allocation of the budget for the vaccine, and fill in the gap between demand and supply in the global market.Introduction The COVID-19 pandemic took the world by storm in 2019 affected the country Auromara in a number of different ways, with different elements, and sectors taking a hit, not just economically, but socially as well. This case study aims to reflect on the impacts it has had on the country's capital, its labor market, small businesses, the construction industry, consumer goods, and transport, which indirectly ties back to a number of industries whose purchasing and selling depends on its arrival at the required ports, airline stations, or to its suppliers. Hence, all of these problems alongside the overarching one of unemployment will be shed light upon, to depict the trying times Auromara has suffered and how it could possibly recover and begin operating sustainably again in a feasible manner. Capital Concern One of the most pertinent and overarching issues of the COVID-19 pandemic that was given rise to was the decrease in Auromara's capital, this would mean that the country is restricted from expanding, in terms of the country's assets, which covers equipment required by industries, real estate management, and other monetary value related aspects. The decrease in Auromara's capital also means an impact on its budgeting, since capital is cash flow, hence its decrease would mean limitation of allocation and further development of all other aforementioned sectors of Auromara. As in the diagram presented below, parallels can be drawn between the situation of Auromara and other countries due to the pandemic. There has been a currency crisis due to the banking sector being ignored as precedence was provided to those such as the health ones, in order to contain the virus and prevent its spread, this similar pattern was also reflected in the US in 1997, however as the graph depicts, the situation is much worse with the COVID-19 shock, where the bar falls much lower. 5.0 4.0 3.0 2.0 Currency 10 crises in EM Dot-com crash Covid-19 and 9/11 shock 0.0 1995 2010 2008 2016 2011 2014 2015 2018 2007 2012 2013 2017 2019 2020 2009 -1.0 -2.0 Sub-prime crash and -3.0 global financial crisis World GDP growth (percentage growth rate) -IMF Oct/19 Outlook = = = Downside