AL FARABI JOURNAL 8 th International Conference on Social Sciences 21-22 July 2020 / Almaty, Kazakhstan Proceeding Book | ISBN: 000000000000000 www.farabicongress.org 383 farabidergisi@gmail.com COVID-19 OUTBREAK AND ITS GLOBAL ECONOMIC EFFECTS Rıza Bayrak Dr. Öğr. Üyesi, OSTİM Teknik Üniversitesi İ.İ.B.F., Ankara/Türkiye, ORCID: 0000-0002-7397-2295 Necmettin ÇELİK Dr. Öğr. Üyesi, İzmir Kâtip Çelebi Üniversitesi İktisat Bölümü, İzmir/Türkiye, ORCID: 0000-0003-0139-7778 ABSTRACT COVID-19 Outbreak, which threatens world health with its global effect, draws attention to its uncertainty on economies. As the biggest one since World War II, this situation is both a health crisis and an economic crisis, which has occurred simultaneously while affecting many countries. For this reason, it is predicted by many international institutions that the epidemic may cause serious contractions on some variables such as foreign trade, investment decisions, income, and employment. In this basic framework, the possible economic effects of the epidemic on economies are tried to be analyzed. First of all, the negative effects that may be experienced in macroeconomic balances are addressed, and thereafter some predictions are made for possible structural changes in the future. Within the scope of the study, based on the fact that the reflections of the contraction process can take two years, state interventions and protectionist policies may increase worldwide. Accordingly, it can be judged that economies may get closed inward compared to former periods, and therefore the globalization process can be questioned as well. In other words; as the most meaningful and effective model of the future, the economic structure takes place, where the public share gets increased rather than the market and capital-oriented structure. In that model, the protection and continuation of life is the main driving force; the income is distributed fairly and equally among economic actors. On the other hand, the digitalization process, minimizing the amount of labor in the production process, would be deeper in the world. Therefore, governments should improve their investments and policies in accordance with these technological and structural changes. KeyWords: Outbreaks, Uncertainties, Economic Crises, Macro-economic Imbalances, The New Economic System. JEL Codes: E21, E24, E32, E44, E64. INTRODUCTION It is well known that widespread outbreaks have many times been a great threat to human life throughout history and as a result of epidemics, significant costs have been incurred. Moreover, according to some views, the number of deaths in these outbreaks is greater than the deaths incurred in wars. According to Meydan (2020), the number of people who died in the Crimean War (1853-1856) was 20.000, while the number of people who died as a result of disease was 75.000. While the number of people who died because of Spanish Flu was 50 million, the number of deaths in World War I (1914-1918) was eight million. Thus, there have been significant losses and costs arising due to epidemics and as a natural consequence of this, several structural economic changes have been observed. It is possible to note that the COVID-19 crisis will result in the emergence of new economic views and changes all around the world in the next period. It is observed that the COVID-19 VIRUS, which is considered as the widest health crisis since the Second World War (ILO, 2020; Deutsche Welle, 2020), has a significant contractionary impact on international commerce system due to major crisis on health, economy, and measures implemented to prevent the spread of the pandemic. Following the prediction of the International Monetary Fund, the contractionary impacts of the pandemic on global economies might be deeper than the impacts of the Global Financial Crisis of 2008 (IMF, 2020: V). This gives the impression that some of the models already accepted as valid in international monetary and commercial systems can also change. In other words, there will be some structural changes in the international economic system.