Ebola– Dual Catastrophe; Human Suffering and Global Economic Impact: Crisis Within a Crisis– $40 Billion Fear Factor…

Ebola’s impact on world economies is not so much the virus but ‘fear’… In a world gripped by fear from Ebola it’s worth remembering that the bigger threat to the global economy lies not with people afflicted by the virus, but with those who are not…

Economists and public health experts have learned much from recent epidemics, such as; Chinese outbreak of  ‘severe acute respiratory syndrome’ (SARS) in 2003 and that of ‘H1N1 influenza’, ‘swine flu’, in Mexico in 2009. According to Michael J. Casey; one key lesson from those experiences is that the indirect costs of public ‘risk aversion’ can generate far more economic damage than the direct cost of health care outlays and other containment expenditures… The losses are found in empty hotel rooms, reduced travel, school closures, disrupted work routines… Or, they come from the blow to consumer confidence that accompanies widespread fear…

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According to Mead Over; any significant economic impact would not be as a result of the actual disease, rather it would be a consequence of ‘aversion behavior’ caused by fear of Ebola… The impact of aversion behavior on markets is like a speculative bubble, but in reverse… According to Jeremy Warner; we know that pandemics will frequently have deeply negative economic consequences… and, this has actually very little to do with the direct impact of the virus itself. Much more important is the effect on behavior, which is the fear factor and the aversion response it triggers… Already we are seeing the early signs in reduced international travel and cancelled trade, never mind the direct consequences for already fragile African economies…

Much of the relevant analysis of epidemics’ economic impact has dealt with airborne diseases, such as SARS and avian flu, whose transmission rates are much higher than the Ebola, which is passed through bodily fluid. But while it’s likely that the economic impact will correlate with the actual spread of the disease, outcomes depend on the public response.

One study led by U.K economists that modeled the global economic fallout from a hypothetical influenza pandemic predicted only a 0.5% GDP loss from the base effect of the disease itself, but up to 8% due to policies intended to mitigate its spread, such as; school closures… for society at large, it’s the economic contagion from Ebola that matters more than any actual infectious disease contagion…

What is Ebola? by Samuel Kevorkian writes: Ebola Virus Disease  (EVD) or Ebola hemorrhagic fever (EHF) is the name of a human disease which has a high mortality rates, as high as 90%. This virus has many variations. The virus is named after the Ebola River in the Democratic Republic of Congo, where the first outbreak was in 1976… Ebola epidemic emerged from the remote villages of Central and West Africa, near the rain forests.

Virus transmits from wildlife to humans and then spread out in the community from humans to humans. The World Health Organization (WHO) said the fruit bats (Pteropodidae) are natural hosts of Ebola. In addition, gorillas, apes and pigs… can also become vectors if they come into contact with saliva or droppings of bats… People who are infected with Ebola virus have an incubation period of from 2 to 21 days… There is no vaccine or treatment therapy for this disease…

Ebola virus is transmitted from animals to people after close contact with either; blood or secretions of infected animals… then it can be transmitted from person to person by direct contact with either; blood, body secretions (feces, urine, saliva, semen), scratches on the skin… or, by mucous membranes of healthy people who have been exposed to infected physical areas by secretions of the virus, for example; infected people’s clothes, contaminated bed sheets, used needles… No specific treatment for the disease is yet available. The disease has a high risk of death, killing between 25% and 90% of those infected with the virus (average is about 50%)…

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U.S. Centers for Disease Control (CDC) Reports– Predicted that if the virus continues to spread at current rates, more than 1.4 million people will be infected before the outbreak is contained. But this prediction is a worst-case scenario that does not take into account recent efforts by the international community to stem the spread of the disease. It’s, however, stark reminder of the possible exponential transmission rate of the disease, if collective response to the Ebola threat is not fast and effective…

The CDC has also emphasized the importance of building new medical facilities, improving home care treatment (including training thousands of health care workers), and implementing broad-based, effective public information campaigns. Although CDC projected a sobering, worst-case scenario of 1.4 million cases of Ebola by January 2015, it didn’t take into account the planned interventions by the international community…

International donors such as World Bank and IMF have pledged to provide over $400 million and $130 million financing (respectively) toward emergency response and medium and long-term recovery in the most-affected countries. The U.S. has provided a surge of $175 million and 3,000 troops to help train nurses and set-up emergency treatment facilities in Liberia. China has committed 174 doctors to Sierra Leone and $37 million in assistance to West Africa. Cuba has also pledged to provide the largest team of medical professionals of any country to assist the region, with 165 doctors set to arrive in Sierra Leone in October and additional 296 heading to Guinea and Liberia.

World Bank Report– The Economic Impact of the 2014 Ebola Epidemic: As of October 16, 2014, the Ebola worldwide death toll will pass 4,500, including 236 health workers, and the number infected will pass 9,000, including; 427 health workers with three worst-affected countries of Guinea, Liberia, Sierra Leone. A new economic impact assessment from World Bank Group says that if the epidemic were to significantly infect people in neighboring countries, some of which have much larger economies, the two-year regional financial impact could reach US$32.6 billion by the end of 2015… According to the analysis, the economic impacts of Ebola are already very serious in the core three countries – particularly; Liberia, Guinea, Sierra Leone – and, could become even catastrophic under slow-containment…

In broader regional terms, the economic impact could be limited if immediate national and international action stop the epidemic and alleviate the ‘aversion behavior’ or fear factor that is causing neighboring countries to close their borders, and airlines and other regional and international companies to suspend their commercial activities in the three worst-affected countries… According to Jim Yong Kim; the international community must act on the knowledge that weak public health infrastructure, institutions, and systems in many fragile countries are a threat not only to their own citizens but also to their trading partners and the world at large…

International Monetary Fund (IMF) Reports: The projected economic growth rate could decline for Sierra Leone from 11.3% to 8%, for Liberia from 5.9% to 2.5% and for Guinea from 3.5% to 2.4%. The IMF admits that the situation is evolving, and that the crisis is not over yet. All the three countries are covered by IMF programs… However, according to Meinie Nicolai; the reality appears to indicate that the IMF needs to revise its figures… the Ebola epidemic is having a major impact in affected countries in Western Africa and the situation is becoming catastrophic… and, the international response to the emergency is ‘below standard’ and ‘way too slow’… it’s important to remember that the epidemic is still spreading, that it’s highly deadly, and it can not be predict when it will be contained…

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Ebola has a major impact on society: It’s contagious and extremely fatal. It creates enormous fear among the population and has a paralyzing effect on countries, for example; in Liberia, before the Ebola outbreak there were 11 airline companies flying to the country, now there are only two international companies left. Ports have reduced access. Borders have been closed… Hospitals are closing, staff are scared to go to work. Patients don’t go for other health treatments, so people die from other diseases… prices are increasing, entrepreneurs are leaving the country, there are cash problems… they need ‘hands on the ground’ to build hospitals and to help set-up treatment centers for patients…

Ebola is not a West African problem. It is not an African problem. It’s a global problem… and, it needs to be addressed at all levels (national, regional, international) as swiftly and completely as possible. In this sense, it’s important to coordinate a united African and global response, in the short-term, but also consider how to integrate investment in health systems into regional development plans. in the medium to long-term, so that public health crises like the current Ebola outbreak can be addressed more quickly (or averted entirely) in the future…

As stressed by the World Bank; the largest economic effects of the crisis are not as a result of the direct costs (e.g.; mortality, morbidity, care-giving, loss in work days…), but rather the results from ‘aversion behavior’ driven by fear of contagion… The impact of this behavior is like a speculative bubble, yet in reverse… however, once ‘fear’ is subsided the impact will diminish…

Predicting where Ebola might spread and how long the outbreak could last is impossible, and so is gauging its potential economic impact. What is clear, however, is that containing the disease is not just humanitarian necessity but economic imperative…