The global financial crisis and the
consequent economic contraction are already taking a heavy toll on the businesses and
economies across nations. Now, a travel-related infection is spreading about as
rapidly as most strains of flu do and has rattled the global economy. However, its
ultimate cost will depend how serious it becomes and how long it lasts. During
a global economic crisis, a pandemic could present a greater threat, as even
a mild one has considerable effects on global economic output. According to a
report by the World Bank, a severe
pandemic (H1N1, H stands for Haemagglutinin and N for
Neuraminidase) like the Spanish flu outbreak in 1918 that killed millions of
people would cause around a 5% drop in global economic activity, costing the
world about $3.1 tn. That the World Health Organization (WHO) has raised the
flu alarm to phase 6 on a six-point scale indicates that the latest flu is the
first 21st century flu pandemic. According
to the WHO, "The virus can be contagious among humans in close contact and
the outbreak has `pandemic potential', meaning there is risk of a spread
across regions or continents." It counseled
governments of many nations to prepare for a long-drawn-out battle against
the persistent flu virus.
The virus appears to be spreading fast with the number of cases growing
in many nations and has started affecting the global economy which is in no
condition to handle the fear factor. Consumers, investors, airline, tourism
and travel are feeling the pinch of the epidemic. Investors, who just began to
regain their confidence in the wake of the global financial crisis, have
again caught heebie-jeebies. While travelers are canceling their trips to
Mexico (Cuba was the first to ban all flights to Mexico), where the outbreak
originated in mid-March, the country could lose at least $2 bn in business in the
coming months, as indicated by reports. China, Russia and South Korea banned
imports of some North American pork, despite the assurances given by the
WHO that the flu is not transmitted through eating or preparing pig meat.
Many Asian countries, including Japan, have tightened border controls. The
economic effects of the outbreak are already visible, especially in airlines
industry which has been hit hard in anticipation of the fact that people will fly
less, whereas the drug companies' stocks rallied on prospects that demand for
antiviral drugs may surge to deal with any pandemic. Switzerland-based
Roche and British manufacturer GlaxoSmith Kline are responding to increased
global demand.
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