As the world makes frantic efforts to contain the effects of the Coronavirus (COVID-19), which the World Health Organisation has described as a pandemic, CHINAKA OKORO conclude his retospection on previous pandemics and their economic implications
Continued from yesterday
2010
An epidemic of cholera killed at least 10,000 people in Haiti in 2010 following a deadly earthquake that paralysed socio-economic activities in that country. The United Nations later apologised for initially denying claims that Nepalese peacekeepers brought the deadly disease to the country following the earthquake.
2012
In 2012, approximately 122,000 people worldwide died from measles, a highly contagious disease caused by a virus. Typhoid fever kills around 216,000 people a year. Tuberculosis, an infectious bacterial disease, killed an estimated 1.3 million in 2012. These are some of the infectious diseases that most concern health officials currently.
2014
The 2014 epidemic of Ebola hemorrhagic fever in West Africa was the largest Ebola outbreak on record. The virus killed more than 11,300 people before it was declared to have ended in 2016.
2016
The World Health Organisation declared a public health emergency of international concern over Zika virus, predicting that three to four million people would be infected within a year as it was “spreading explosively” throughout the Americas.
Zika is the first mosquito-borne disease to cause a birth defect. Medical experts say the devastating birth defect is microcephaly. The virus is also associated with miscarriage, stillbirth and other neurological deficits.
While not deadly in the way other epidemics are, there is a huge impact on future generations when fewer children are born because parents are afraid of the virus.
Despite the persistence of disease and pandemics throughout history, there seems to be one consistent trend over time. This is a gradual reduction in the death rate, which could be as a result of improved health care and an appreciable knowledge of the factors that incubate pandemics. These have been powerful tools in mitigating their impact.
Economic impacts of epidemics
Writing on Finance and Development in June, Vol. 55, No. 2 2018 edition of Pandemics and the Global Economy, David E. Bloom, Daniel Cadarette and JP Sevilla noted that new and resurgent infectious diseases can have far-reaching economic repercussions.
David E. Bloom, a Clarence James Gamble Professor of Economics and Demography, Daniel Cardarette, a Research Assistant and JP Sevilla, a Research Associate at Harvard University’s Teaching Hospital, Chan School of Public Health maintained that the health risks of outbreaks and epidemics—and the fear and panic that accompany them—map to various economic risks.
“A sizeable outbreak can overwhelm the health system of any country, limiting the capacity to deal with routine health issues and compounding the problem. Beyond shocks to the health sector, epidemics force both the ill and their caretakers to miss work or be less effective at their jobs, driving down and disrupting productivity.
“Fear of infection can result in social distancing or closed schools, enterprises, commercial establishments, transportation, and public services—all of which disrupt economic and other socially valuable activities, they said.
Apart from the above, the concern over the spread of an outbreak can lead to decreased trade.
They cited the ban imposed by the European Union on exports of British beef which lasted for 10 years following the identification of a mad cow disease outbreak in the United Kingdom. This, according to them, impeded the vibrancy of the British economy in some way.
“Travel and tourism from and to regions affected by outbreaks are also likely to decline. Some long-running epidemics, such as HIV and malaria, deter foreign direct investment as well,” they maintained.
The scenarios are playing out in Nigeria generally and some states of the federation that have ordered the closure of markets, schools and other social events as a result of the current Coronavirus pandemic.
On the inequitable distribution of the economic risks of epidemics, the trio stated that “the consequences of outbreaks and epidemics are not distributed equally throughout the economy. Some sectors may benefit financially, while others will suffer disproportionately.
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“Pharmaceutical companies that produce vaccines, antibiotics, or other products needed for outbreak response are potential beneficiaries. Health and life insurance companies are likely to bear heavy costs, at least in the short-term, as are livestock producers in the event of an outbreak linked to animals.
“As with other forms of risks, the economic risk of health shocks can be managed with policies that reduce their likelihood and that position country to respond swiftly when they occur,” they stated.
Despite significant medical progress over the years, infectious diseases such as influenza or malaria still represent a considerable threat to humanity.
While the first and most crucial aspect of an epidemic is, and will always remain, the loss of human life, the spread of a virus can also have important repercussions for national or regional economies.
Research reports from various studies indicate that epidemic disease impacts on a country’s economy through several channels, including the health, transportation, agricultural and tourism sectors.
At the same time, trade with other countries may also be affected, while the interwoven modern economies indicate that an epidemic in one country can also implicate international supply chains.
Research initiated by the International Monetary Fund (IMF) revealed that “vulnerable populations, particularly the poor, are likely to suffer disproportionately from an outbreak, as they may have less access to health care and lower savings to protect against financial catastrophe.”
“At the regional level, a World Bank report estimates that “the recent Ebola epidemic in Guinea, Liberia, and Sierra Leone, cancelled-out many of the previous years’ economic gains for the three countries which, until then, were among the fastest-growing economies in the world.”
Managing the risk
Epidemiologists and experts in Pathology are of the view that pandemic risk is complex, even as they agreed that policymakers have tools at their disposal to respond to the challenge.
“Some tools”, they say “minimise the likelihood of outbreaks or limit their proliferation, others attempt to minimise the health impact of outbreaks that cannot be prevented or immediately contained. Still, others aim to minimise the economic impact.”
What to do
To effectively manage an outbreak of global proportion, experts have advised that “every country should invest in improved sanitation, provision of clean water and better urban infrastructure which, they say, can reduce the frequency of human contact with pathogenic agents.
“Building strong health systems and supporting proper nutrition will help ensure good baseline levels of health, making people less susceptible to infection. Strengthening basic systems, services, and infrastructure becomes easier with economic growth and development.
“However, policies to protect spending in these areas even when budgets are constrained can help safeguard developing economies from major health shocks that could significantly impinge upon human capital and impede economic growth.
“Investment in reliable disease surveillance in both human and animal populations is also critical. Within formal global surveillance systems, it may be beneficial to develop incentives for reporting suspected outbreaks, as countries may reasonably fear the effects of such reporting on trade, tourism and other economic outcomes.
“Informal surveillance systems which aggregate information from official surveillance reports, media reports, online discussions and summaries and eyewitness observations, can also help national health systems and international responders get ahead of the epidemiological curve during the early stages of an outbreak. Social media offers additional opportunities for early detection of shifts in infectious disease incidence.
“Countries should be ready to take initial measures to limit the spread of disease when an outbreak does occur. Historically, ships were quarantined in port during plague epidemics to prevent the spread of the disease to coastal cities.
“In the case of highly infectious and highly transmissible diseases, quarantines may still be necessary, although they can inspire concerns about human rights,” experts advised.
Collaboration is crucial
The profit-seeking interest does not align well with the social interest of minimising the risk posed by an epidemic.
The drive to make more financial gains in the stead of helping fellow humankind to survive an epidemic outbreak would not allow those who sell or produce antidotes to the health problem to willingly make the products available for people in need of them to access them.
To make more gains, some of the traders create artificial scarcity by hoarding the products, a situation that makes the prices to skyrocket.
In the circumstances, there is significant market failure when it comes to vaccines against individual low-probability pathogens that collectively are likely to cause epidemics.
Given the low probability that any single vaccine of this type will be needed, high Research and Development (R&D) costs, and delayed returns, pharmaceutical companies hesitate to invest in their development.
The advantage is that the authorities can take proactive steps to manage the risk of epidemics and mitigate their impacts. Concerted action at the local, national and multinational levels can go a long way toward protecting our collective well-being in the future.
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