With the emergence of the coronavirus pandemic, 2020 brought challenges that no one was prepared for, changing the way we live, dominating political scenes, and sending shock waves across the world markets.
The respiratory disease known as COVID-19 has driven schools to shut down, employees to work remotely, and people to remain inside their homes. It mitigated some environmental risks but did not prevent armed conflicts to break out around the world.
It was a golden year for science and technology to flourish. However, this did not prevent millions of people to go below the poverty line.
The year 2020 was actually one of the most eventful years in recent history and maybe a turning point that is expected to change the dynamics of life in the future.
Hence, the year of face masks and quarantines will have many other reasons to go down the history books rather than coronavirus.
Conflicts, Wars Go On
There was no wonder that the most volatile political scene in 2020 was in the US, where more than 18 million cases and more than 320,000 deaths from coronavirus were recorded, the highest figures in the world. From Black Lives Matter demonstrations to a fierce presidential campaign that ended with the fall of President Donald Trump and the coming of democrats, coronavirus was one of the political tools that was used by all parties.
The year also witnessed a historic day in US presidential history after Trump became the third president to be impeached and subsequently acquitted by the Senate.
It was also the year when relations between the US and China hit rock bottom. After a breakthrough in the nearly two-year trade war between the world’s two largest economies in January with signing a deal that relaxes some US tariffs on Chinese imports and obliges China to buy an additional $200 billion worth of American goods, tensions soared again amid the coronavirus pandemic. Officials in both China and the US blamed the other side for the pandemic.
While Chinese officials claimed that the US military brought the virus to China, Trump made repeated references to the “Chinese virus,” which he says spread because of failures by the Chinese government. The situation escalated when the US ordered China to close its consulate in Houston alleging that it was a hub of espionage and intellectual property theft. China hit back by closing the US consulate in Chengdu.
The coronavirus and the economic situation did not prevent China to engage in another dangerous conflict with neighboring India. The tension between the two world powers heightened following skirmishes at the border near Pangong Lake in Galwan Valley in eastern Ladakh in May. Around 20 Indian soldiers and an undisclosed number of Chinese soldiers were killed in overnight clashes on June 16.
The year also has seen an escalation in the US-Iranian hostilities after a US drone strike killed Iran’s Revolutionary Guards Corps commander Qassem Soleimani.
There is no doubt that coronavirus has played a positive role in deescalating tension in some old conflict zones such as in Syria where fewer civilians were killed in the war in Syria than in any other year since the conflict began in 2011. The year also witnessed the diminishing of activities of the Islamic State terror group in Iraq and Syria. The situation in Yemen was calmer with wide steps toward ceasefire and reconciliation.
However, the pandemic was not able to prevent new conflicts from emerging, such as the renewed conflict between Armenia and Azerbaijan over the Nagorno-Karabakh region or the conflict between Ethiopia’s federal government and defiant authorities in its northern Tigray region, where hundreds of civilians died, while tens of thousands have sought refuge in Sudan, as the conflict threatens to further destabilize the Horn of Africa region.
According to the United Nations High Commissioner for Refugees (UNHCR)’s latest report, “some 79.5 million people had been forced from their homes due to persecution, conflict, and human rights violations.” That number includes 29.6 million refugees, 4.2 million asylum seekers, as well as 45.7 million internally displaced people (IDPs).
War, conflicts (both existing and new) and the coronavirus pandemic have all contributed to increasing those figures as the year has passed, stated the UNHCR report.
According to the report, the virus made things worse for refugees as the restrictions imposed globally to curb the spread of the virus also made it more difficult for refugees to reach safety. During the first wave of the pandemic, 168 countries fully or partially closed their borders, according to UNHCR. Ninety of those countries made no exception for asylum seekers.
Throwing the Economy into Disarray
During last year, the coronavirus proved to be not only a public health emergency but also a major threat to the world’s economy.
It has already caused global stock markets to crash, while lockdown measures have led the global economy into one of its most severe recessions. For example, China’s gross domestic product (GDP) dropped by 6.8% in Q1 2020, compared with the same period in the previous year, while the US and the European Union (EU) saw their GDPs slumped by 34.3% and 12.1%, respectively, in the Q2 2020
According to a recent study, compiled by online platform IG, the pandemic wiped nearly $6.7 trillion from the world economy in 2020.
The forecast drop in global GDP – down 5.2% from $89.94 trillion to $83.19 trillion – is equivalent to the annual economic output of Germany and France combined.
According to the study, this would represent the deepest recession since World War II, and nearly three times as severe as the one caused by the 2008 credit crunch.
The analysis suggests that 346 billion working hours were lost globally in H1 2020, which is equivalent to 555 million full-time jobs worldwide.
After the World Health Organization (WHO) declared COVID-19 a global pandemic, central banks around the globe have announced an emergency to counter the impact of COVID-19 on the struggling economy.
Despite hopes that the global economy should rebound in 2021, this recovery could not be felt until a vaccine is widely available, as possible further waves of COVID-19 may lead governments to reimpose restrictions. Potential challenges in the rollout of a vaccine, structural damage to labor markets and US-China tensions still pose risks.
According to World Bank statistics, global extreme poverty was expected to rise in 2020 for the first time in over 20 years as the disruption of the COVID-19 pandemic joined the forces of conflict and climate change, which were already slowing poverty reduction progress.
According to the report, COVID-19 was estimated to push an additional 88 million to 115 million people into extreme poverty in 2020, with the total rising to as many as 150 million by 2021.
In the meantime, the United Nations Educational, Scientific and Cultural Organization (UNESCO) estimated that nearly 24 million children, including 11 million girls may drop out of education in the coming year due to the pandemic’s economic impact alone. According to UNESCO experts, this will threaten to reverse decades of progress made toward gender equality.
Oil, Gas Dilemma
In the oil and gas world, 2020 was the historic year where oil recorded negative prices for the first time ever when US oil benchmark West Texas Intermediate fell from $17.85 at the start of the trading day to negative $37.63 by the close. This comes at a time when the Organization of the Petroleum Exporting Countries and its allies (OPEC+) group have agreed to cut output by 10 million barrels a day (mmbbl/d) in an attempt to stabilize oil prices after a decline in demand and a prices war by Saudi Arabia and Russia led oil markets to crash.
According to experts, even the roll-out of vaccines by the end of the year is not expected to quickly reverse the destruction wrought on global oil demand.
“The understandable euphoria around the start of vaccination programs partly explains higher prices but it will be several months before we reach a critical mass of vaccinated, economically active people and thus see an impact on oil demand,” the International Energy Agency (IEA) warned in its latest monthly report.
The IEA revised down its estimates for oil demand in 2020 by 50,000 barrels per day (bbl/d) and for next year by 170,000 bbl/d, citing scarce jet fuel use as fewer people travel by air.
Although the oil and gas sector is used to the highs and lows of economic and price cycles, this downturn seems unlike any other, said a recent report by Deloitte which provides industry-leading audit, consulting, tax and advisory services to many of the world’s brands.
According to the report, the year has witnessed “great compression” of the oil and gas industry. “With the survival of many companies at risk, and the longer-term decline in petroleum demand, the next decade could look very different for the entire oil and gas value chain,” said Deloitte who thinks 2021 will either be a leapfrog year or a test of endurance for many.
Most oil companies have to enter 2021 with tactics to guard against downside risks and to be ready for any potential upsides. Such tactics may include accelerating digital transformation, maintaining flexibility in their operations, and optimizing their capital allocation for their future projects.
The Bright Side of An Ominous Year
The pandemic and lockdown policies did not only affect production activities and people’s lifestyles, but also lead to substantial changes in energy consumption and harmful emissions. For example the IEA projected a decline of global CO2 emissions by 8% in 2020, which led the CO2 emissions level back to 10 years ago.
A green pandemic recovery could cut anticipated emissions in 2030 by up to 25% and increase the chances of keeping the world below a 2-degree Celsius scenario by up to 66%, according to a UN report published in December.
Throughout the year, COVID-19 has forced many organizations to undergo important transformation, rethinking key elements of their business processes and use of technology to maintain operations while observing a changing landscape of guidelines and new procedures.
It is difficult to imagine how rough 2020 would have been without remote communications tech. Zoom and similar tools enabled companies to switch to remote meetings. The amount of traffic online jumped dramatically, and the internet mostly handled it easily.
The COVID-19 pandemic highlighted the need for cross-border scientific collaboration, as well as the need for proper tools to maintain and support this collaboration, especially during emergency situations.
Hard as it was, 2020 can be seen as a window for new opportunities for science and economics, leading to roads that were not noticeable before.