The impact of informal economy in the long run will be positive, in that it will spark new technological development on the one hand. On the other reviews our mental state as to what constitutes work environment; for sure that shall be debated for long time to come. Simply because a percentage of the large organisations have remodeled and are still making more money at present, eg, Entertainment, Energy and Telecommunication industries.
Food and food provision shall be a concern in the developing countries since Production and Transportation above all food-storage systems shall drive the new technologies development irrespective of the population (dynamics) involved directly or indirectly. For sure unemployment rate shall increase in specific industries since means of production, distribution may never recover as a result of fact that MEANS OF ACQUISITION has already morphed. Banking sectors are preparing to capitalise on digital money, and a shift to rapid touch and GO system with HUMAN EMBEDDED payment/travel systems.
Although, the BANKING INDUSTRY will be outsmarted by the younger generation as "the Known" business models transform in panic and are transitioning into the NEW TAKE IT or LEAVE IT Market environment. I task the best among us to GET READY since the Normal shall constitute "get stuck at home" Abnormal life style.
Dr. Tarek Selmi,
Do you think that the decision of the UK to leave the EU will change the level of the gray economy?
Pandemics are large-scale outbreaks of infectious disease that can momentously increase morbidity and mortality over a wide geographic area and cause significant economic, social, and political disruption. definitely, the more the SARS-CoV-2 virus spreads around the globe—there are more than 1.3 million cases of the related COVID-19 disease, as of this writing—the greater the concern over not just our health, but our livelihoods. With millions of people in the around the world in a virtual lockdown, a ripple effect throughout the economy is inevitable. While experts can estimate what the economic fallout from a pandemic such as the coronavirus will be, the precise impact will vary based on how many people are affected, The spread of virus has led to fears of a worldwide economic impacts.
There maybe be a significant loss and a negative impact on the informal economy.
Dr. Hamze ALI Abdillahi,
Thank you for your contribution and your attention! The time will tell us what the consequences of a pandemic will be, but it would be great for science to make predictions.
Dr. Hassan Izzeddin Sarsak,
In this case, can we expect even more people to stay out of the health and social security system?
In some areas, for example - the speculative sale of PPEs, medicines, some imported foodstuffs and transport arranged via the internet or mobile services, it may be blooming.
Lack of regulation does not signify the absence of offered goods and services, but rather - the lack of price regulation, exchange or quality of goods/ services. :)
I think it is a very important question because the economy in general was affected by the epidemic, and the people's actions were directly affected. Many companies have laid off workers and cut production costs. The medical supplies industry, respirators, and others have now thrived
Dear Ilhan Cetin, Thank you for your contribution! Unfortunately, such consequences are very likely.
Often after the epidemic, like the plague previously, wars come to cover the losses of affected countries. I think there are wars and a new switch to lead the world after this epidemic
It will definitely have a huge impact, which will cause a great loss for him
The pandemic puts all to hard trials. Those who have worked in the gray sector and have not been insured are in the most difficult situation in the present emergency.
It has and shall have a huge impact on economy world wide, many are unemployed due to the pandemic and many shall loose their jobs, oil prices have crashed down and there is a lot of mess and there shall be an after math mess also
The impact of informal economy is already felt from the developing countries since more than 86 percent of the population involved directly or indirectly informal economy, it increases unemployment rate, dicreases saving and many smal business are out of market since normal got stuck and everyone is at home, the result unemployment will result to increase crime of rubbery, the impact of this pandemic on informal economy it hugely hit and will hit lower income countries and vulnerable populations who already used to live less than a dollar.
Thanks for asking
Halane
I think the main effect will be reflect by disruption of financial markets and its implications for the economic structure in general and for financial trading in particular.
Devastating because those in the informal economy which covers working in unprotected jobs and self-employment will need to find ways and means to earn their keep which comes from daily wages. The number is huge because when we look at the US market (which is quite well monitored), more than 22 million filed for unemployment benefits during the lockdown with a forecast unemployment rate of 20% in the coming month.
The impact of informal economy in the long run will be positive, in that it will spark new technological development on the one hand. On the other reviews our mental state as to what constitutes work environment; for sure that shall be debated for long time to come. Simply because a percentage of the large organisations have remodeled and are still making more money at present, eg, Entertainment, Energy and Telecommunication industries.
Food and food provision shall be a concern in the developing countries since Production and Transportation above all food-storage systems shall drive the new technologies development irrespective of the population (dynamics) involved directly or indirectly. For sure unemployment rate shall increase in specific industries since means of production, distribution may never recover as a result of fact that MEANS OF ACQUISITION has already morphed. Banking sectors are preparing to capitalise on digital money, and a shift to rapid touch and GO system with HUMAN EMBEDDED payment/travel systems.
Although, the BANKING INDUSTRY will be outsmarted by the younger generation as "the Known" business models transform in panic and are transitioning into the NEW TAKE IT or LEAVE IT Market environment. I task the best among us to GET READY since the Normal shall constitute "get stuck at home" Abnormal life style.
Devastating Bistra Nikolova . In the short term, revenue and working capital. Survival, COVID-19 is depriving them of oxygen.
Thanks to all participants for contributing to this discussion to clarify an identified problem in today's economy (the gray sector) that has been complicated by the current pandemic.
This is just the 'shadow economy.' "Friedrich Schneider, an economist at Johannes Kepler University in Austria who has done studies on underground economies all over the world, estimates that Thailand’s shadow economy accounted for 40.9 per cent of real GDP in 2014, which would have been more than $155 billion in illicit revenue generated." I would estimate that many of the jobs in, for example, food and agriculture won't be hugely affected, but tourism and related activities (some illicit, some simply informal) are and will suffer on a severe scale.
Informal economy is specifically important in developing and emerging nations. It provides a solid backbone. There are many service providers in this economy. These are severely hit by the Covid-19. There is lock-down in most of these developing countries (In Asia/Africa). The travel is restrictive. Movement of people /good is seriously impacted. This economy will hit badly unless there is financial package by respective governments sand /or international donor agencies.
Pandemic will have informal impact on the informal economy.
There would be a global recession, which may last for 3-5 years. The countries who are totally dependant on imports of goods would bear the severest impact. But, people would learn to live a simple life, fulfilling their basic necessities.
Dr. Muhammad Shoaib Ahmedani,
Prof. Raju Vaishya,
Thank you for your contribution!
Another update in relation to Thailand's informal economy (source: Foreign Correspondents' Club of Thailand [FCCT]): "Huge numbers of those employed in the informal sector, more than 60% of the Thai workforce, have lost their jobs, and now rely on food handouts. Given the dire forecasts for job losses, already estimated at 7 million with warnings by a government advisory council that more than 10 million could be out of work within the next few months, political leaders seem set to come under more pressure."
In my country, the informal sector has a great impact on Convid-19 pandemic. The government has to subsidies their income during the outbreak.
In India the situation going worst. small business people getting suffered. But govt taken some initiatives to support them. But sure the pandemic created a big issue in economy no doubt in that.
Bistra Nikolova . A good question which is relevant to the current disastrous moments. Although both formal and informal economies have been stuck due to pandemic, yet the impact may be more ruinous on informal economies because informal economies are generally not well structured and not covered under the compact shields of public or private insurance. Unfortunately, the negative impact of pandemic on the growth of informal economies may directly affect the peoples in no time with serious consequences as compared to the dents made by pandemic on formal economies, which may take relatively considerable trickle down time.
Bistra Nikolova
https://www.ilo.org/wcmsp5/groups/public/---ed_protect/---protrav/---travail/documents/briefingnote/wcms_743623.pdf
The impact of the pandemic on the informal economy is beyond calculation. Both formal and informal are effected by Corona tsunami.
Economy became worse than before during this covid. Middle class suffered a lot. There is no import and export during these days so the economy is affected from home to society , society to country.
Informal economy has been very badly affected, especially in developing and emerging economies. . India is no exception. Unfortunately, many of the units are not registered in the government repository. These units are having literally hand-to-mouth existence. Lock down, social distancing and lack of money supply in the hands of consumers have drastically affected these units. Government is trying to revive these units.
the impact will nt be universally even to all players int e informal sector, owing to the pre-existing disparities political social economic and environmentally. however this epoch will surely stimulate innovation for the better. morever those who will adjust will certainly be able to make a killing and will continue to do so for quite a time whilst some may be pushed out of the game to the point that without timeous bail-out they will not stand again.
I believe that the impact will be negative, because people in order to cover their needs they enter to informal economy as a reaction to pandemic situation!!! For example one of the sectors that suffers in tourism industry. When a hotel closes and the employees are unemployed they turn to informal economic activities to have more and cover their needs.....It would be useful to write a collective book all of us with pandemic impacts in informal economy of our country. What do you think?
The pandemic will affect the informal economy positively, the reason being when household and or companies feel pressure financially they will turn to under declare their incomes and some of their services, causing the informal to grow and the formal economy to shrink. The pandemic simply favors the Informal economy.
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