GENEVA / COVID-19 ECONOMY

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04-Mar-2020 00:04:19
The extent of the damage to the global economy caused by novel coronavirus COVID-19 moved further into focus today as UN economists announced a likely USD 50 billion drop in worldwide manufacturing exports in February alone. UNTV CH

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STORY: GENEVA / COVID-19 ECONOMY
TRT: 4:19
SOURCE: UNTV CH
RESTRICTIONS: NONE
LANGUAGE: ENGLISH / NATS

DATELINE: 4 March 2020, GENEVA, SWITZERLAND

SHOTLIST:

1. Wide shot, exterior, flag alley, Palais des Nations, United Nations Geneva
2. Med shot, Press room III, journalists, podium speakers, UN logo
3. Med shot, Press room III, Pamela Coke-Hamilton, UNCTAD, Director, Division on International Trade and Commodities, speaking from podium, with Alessandro Nicita, Economist, Division on International Trade and Commodities, at her side. Journalists shown out of focus in front of sho.
4. SOUNDBITE (English) Pamela Coke-Hamilton, Director, Division on International Trade and Commodities, United Nations Conference on Trade and Development (UNCTAD):
“We have done an analysis based on what is called a Manufacturing Purchasing Manager’s Index (PMI), which has fallen to 37.5 - a drop of about 20 points – the lowest reading since 2004. This also correlates directly to exports and also implies a two per cent drop in overall exports. This results in a – well, this will show - that there’s a ripple effect throughout the global economy to the tune of a USD 50 billion fall in exports across the world.”
5. Med shot, Press room III, TV camera crews
6. SOUNDBITE (English) Alessandro Nicita, Economist, Division on International Trade and Commodities: “Of course, if the virus continues to spread and gets out of control, and we’ll see closures not only in China but also in India and the United States and everywhere else in the world, then it would be a big problem.”
7. Close up, journalist leafing through press release
8. SOUNDBITE (English) Pamela Coke-Hamilton, Director, Division on International Trade and Commodities, United Nations Conference on Trade and Development (UNCTAD):
“Right now, the impact on the global value chains is already being felt and will continue probably for a few months. But if it rebounds, say in the next few months, then the long-term or year-long impact will be a little different and will be better. So it depends on what happens in China.”
9. Close up, several journalists in profile looking down, one is wearing a conference listening device
10. SOUNDBITE (English) Pamela Coke-Hamilton, Director, Division on International Trade and Commodities, United Nations Conference on Trade and Development (UNCTAD):
“Assuming that it is not mitigated in the short-term, it’s likely that the overall impact on the global economy is going to be significant in terms of a negative downturn. I think also for developing countries, the impact of what’s happening in China is going to be felt very, very intensely.”
11. Med shot, journalists looking off camera
12. SOUNDBITE (English) Pamela Coke-Hamilton, Director, Division on International Trade and Commodities, United Nations Conference on Trade and Development (UNCTAD):
“The issues with relation to what the US is doing now in terms of visitor arrivals, cancelling various meetings, it’s all kind of having a kind of knock-on effect as well in terms of demand. So right now, we’re not clear on where it will go – a lot will depend on what happens with COVID-19; if they are able to come up with a vaccine then hallelujah, hopefully it will end very quickly; but if not, the impact can be severe.”
13. Med shot, journalists wearing conference listening devices looking to right of shot, one leans back
14. SOUNDBITE (English) Alessandro Nicita, Economist, Division on International Trade and Commodities:
“China has built a huge logistics - transport logistics - which is like harbours, shipping lanes, airplanes, that actually are able to move all of those goods in and out of China. Now yes, some industries may be able to find some sort of alternative supplier like in Mexico or in East Europe, but that will require even more time, because not only production needs to be moved, but also the infrastructure related to logistics would need to be built.”
15. Close up, journalists wearing conference listening devices, TV cameras
16. SOUNDBITE (English) Pamela Coke-Hamilton, Director, Division on International Trade and Commodities, United Nations Conference on Trade and Development (UNCTAD):
“It was the same argument that was used when the US President thought that simply improving – well, sorry - simply imposing certain measures on certain countries would shift production back to the United States. It’s never that easy, because when companies move and they relocate and they set up their industries and their logistics frameworks, it’s very hard to shift in the short term.”
17. Med shot, TV camera operator adjusting lens and moving camera
18. SOUNDBITE (English) Alessandro Nicita, Economist, Division on International Trade and Commodities:
“Ultimately, the economic impact of this virus depends on the measures that countries apply to contain the virus. So, China has done a great job in containing the virus, but it has sacrificed a little bit the economy, at least in the first few weeks. So, planned closures, restriction to movement of people, which were all necessary; but there is an economic effect when you take those measures.”
19. Close up, journalist looking down at her laptop, the top of which is visible only
20. Med shot, journalists and photographer, podium speakers, UN logo
21. Close up, hands typing on laptop keyboards

STORYLINE:

The extent of the damage to the global economy caused by novel coronavirus COVID-19 moved further into focus today as UN economists announced a likely USD 50 billion drop in worldwide manufacturing exports in February alone.

Preliminary economic data analysed by the UN Conference on Trade and Development (UNCTAD) in Geneva indicate that virus containment measures in China – where the outbreak emerged in December – have already caused a substantial decline in output.

Those expected to be worst hit are the European Union (USD 15.5 billion), the United States (USD 5.8 billion) and Japan (USD 5.2 billion), noted by Pamela Coke-Hamilton, who heads UNCTAD’s Division on International Trade and Commodities.

For developing economies that are reliant on selling raw materials, the effects could be felt “very, very intensely”, she added.

Coke-Hamilton said, “assuming that it is not mitigated in the short-term, it’s likely that the overall impact on the global economy is going to be significant in terms of a negative downturn.”

Citing the China Manufacturing Purchasing Manager’s Index (PMI), the UN economist noted that it had fallen to 37.5 - a drop of about 20 points – the lowest reading since 2004.

She said, “this also correlates directly to exports and also implies a two per cent drop in overall exports,” adding that, with a resulting “ripple effect” worldwide “to the tune of a $50 billion fall in exports”.

Because China has become the main supplier of finished products and so-called intermediate products used in countless industries, from chemicals for pharmaceuticals to parts for digital cameras and the car industry, concerns about the long-term disruption to supply chains there has left many companies around the world fearful that their own output may soon be affected, according to UNCTAD.

Alessandro Nicita, from UNCTAD’s Division on International Trade and Commodities said, “of course, if the virus continues to spread and gets out of control, and we’ll see closures not only in China but also in India and the United States and everywhere else in the world, then it would be a big problem.”

He said, “Ultimately, the economic impact of this virus depends on the measures that countries apply to contain the virus. So, China has done a great job in containing the virus, but it has sacrificed a little bit the economy, at least in the first few weeks. So, planned closures, restriction to movement of people, which were all necessary; but there is an economic effect when you take those measures.”

In addition to falling manufacturing levels, UNCTAD also highlighted a decrease in the number of container ships leaving Shanghai in the first half of February, from around 300 a week to 180, which then returned to normal levels in the second half of the month.

Coke-Hamilton said, “right now, the impact on the global value chains is already being felt and will continue probably for a few months,” adding that “but if it rebounds, say in the next few months, then the long-term or year-long impact will be a little different and will be better. So, it depends on what happens in China.”

Responding to questions about whether countries might react to a potential supply-chain squeeze by looking to domestic manufacturers instead, the UNCTAD economists explained that such a measure would unlikely be effective in the short-term.

Nicita explained, “China has built a huge logistics - transport logistics - which is like harbours, shipping lanes, airplanes, that actually are able to move all of those goods in and out of China.”

He continued, “now yes, some industries may be able to find some sort of alternative supplier like in Mexico or East Europe, but that will require even more time, because not only production needs to be moved, but also the infrastructure related to logistics would need to be built.”

Coke-Hamilton added, “it was the same argument that was used when the US President thought that … imposing certain measures on certain countries would shift production back to the United States. It’s never that easy, because when companies move and they relocate and they set up their industries and their logistics frameworks, it’s very hard to shift in the short term.”

Highlighting ongoing uncertainty surrounding the economic impact of the epidemic, in which there have been more than 90,000 confirmed cases in more than 70 countries (the majority in China) and over 3,000 deaths, Coke-Hamilton said that US measures “in terms of visitor arrivals, cancelling various meetings” were having a “knock-on effect” in terms of demand.

She said, “so right now, we’re not clear on where it will go – a lot will depend on what happens with COVID-19; if they are able to come up with a vaccine then hallelujah, hopefully it will end very quickly; but if not, the impact can be severe.”
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