Multimedia Reporter
Patricia Mirasol
Despite the growing clamor around Covid-19, the world is no stranger to outbreaks. In fact, over the last 30 years, the number of infectious disease outbreaks has increased with trade and travel. , the annual global cost of moderately severe to severe pandemics is approximately $570 billion, or 0.7% of the global income.
This latest coronavirus brings to mind the other two that have caused global upheavals this century: SARS (Severe Acute Respiratory Syndrome) and MERS (Middle East Respiratory Syndrome). All affected the travel, tourism, and leisure industries significantly. Fear of catching the infectious diseases discouraged people from visiting places with high foot traffic. Schedules, plans, and decisions were postponed, invariably hurting cruise liners, airlines, event facilities, hotels, and tour operators.听
This mass panic also caused more damage than the zoonotic viruses themselves. mentions the economic losses due to SARS to be “driven by public avoidance, which contributed to a disproportionate aggregate disease prevention cost.” : “Remarkably, estimates suggest that only 39% of the economic losses from outbreaks are associated with direct effects on infected individuals. Rather, the bulk of the costs results from healthy people鈥檚 change of behavior as they seek to avoid infection.”
Here鈥檚 a more comprehensive breakdown:
| Comparisons | SARS (Severe Acute Respiratory Syndrome) | MERS (Middle East Respiratory Syndrome) | Covid-19 (also known as SARS-CoV-2 and 2019-nCoV; formerly known as nCoV or novel coronavirus) |
| Period of outbreak听 | 2002-2003 | 2012-2015 | 2019-present |
| Source and transmission | The primary way that SARS appears to spread is by close person-to-person contact. through the intermediate host of farmed civet cats bred for human consumption in China.听 | Most human cases have been attributed to human-to-human infections in healthcare settings, but current scientific evidence suggests that and an animal source of MERS infection in humans.听 | . Many of the initial cases frequented the Huanan seafood wholesale market, which also sold live and newly slaughtered animals. China鈥檚 national health commission has confirmed human-to-human virus transmission. |
| Symptoms | high fever, chills, headache, a general feeling of discomfort, and body aches. Some people also experience mild respiratory symptoms, diarrhea. Most develop pneumonia. Up to 20% require mechanical ventilation.听 | fever, cough, and shortness of breath. Pneumonia is common, but not always present. Gastrointestinal symptoms like diarrhoea have been reported. Some laboratory-confirmed cases are reported as asymptomatic. | fever,听 cough, and shortness of breath. Reported illnesses have ranged from mild symptoms to severe illness and death.听 |
| Vaccine and treatment听 | There is currently no cure for SARS, but research to find a vaccine is ongoing. Treatment is mainly supportive. | No vaccine or specific treatment is currently available; however, several vaccines and treatments are in development. Treatment is supportive and based on the patient鈥檚 clinical condition. | There is currently no vaccine to prevent Covid-19. Treatment is mainly supportive. For severe cases, treatment includes care to support vital organ functions. |
| Countries affected | From China, it quickly spread to other Asian countries. in several other countries, including 4 in the UK, plus a significant outbreak in Toronto, Canada. | 27 countries have reported cases of MERS-CoV. Saudi Arabia, United Arab Emirates, and the Republic of Korea.听 | have confirmed cases of the infection. The 10 most affected places include mainland China, Japan, South Korea, Italy, Iran, and Singapore. |
| Infections | as of March 03, 2020, 12:15 p.m. Philippine time | ||
| Deaths | 听 | 听 | as of March 03, 2020, 12:15 p.m. Philippine time |
Here鈥檚 how different industries were affected by these outbreaks:
| Industry | SARS (Severe Acute Respiratory Syndrome) | MERS (Middle East Respiratory Syndrome) | Covid-19 (also known as SARS-CoV-2 and 2019-nCoV; formerly known as nCoV or novel coronavirus) |
| Sports听 | to refrain from school activities such as field trips and sports events. | , with high-profile postponements including the Formula One Chinese Grand Prix and the Hong Kong Sevens rugby tournament. South Korea鈥檚 K-league has also postponed the start of the new football season. | |
| Travel | from an average of around 27,500 passengers to roughly 5,000 passengers per day at the end of April 2003. Airlines such as Cathay Pacific canceled over 45% of their scheduled flights during the same month, and ticketing revenues plunged from HK$120 million ($15.3 million) to HK$4 million ($510,000) in the first two weeks of April.听 | to and from South Korea. The Department of Health is urging Filipinos to postpone their travel to some parts of South Korea that have seen a spike in the number of people with coronavirus infection. | |
| Tourism | were estimated to amount to around $1.4 billion, or 300 times the direct cost of medical treatment for SARS cases in the city. | to the country, which caused the Bank of Korea to cut its benchmark interest rate to a record low. | to or within Asia to reconsider their trips. Moreover, the department warned that repatriation flights organized by the US government “should not be relied upon as an option for US citizens under the potential risk of quarantine by local authorities.鈥 This statement came in the heels of the in the cruise ship Diamond Princess.
The virus in Italy. Milan鈥檚 Salone del Mobile, the world’s largest and most important furniture fair, .听 |
| Hospitality | within the first two weeks of April and over 1,600 restaurant staff became unemployed. As many as 16,000 staff were forced to take leave or pay cuts.
The SARS outbreak in Canada caused to its accommodation and food service sector. |
in South Korea associated with the decrease of non-citizen visitors were US$542 million, US$359 million, and US$106 million, respectively. | |
| Construction and manufacturing | , where investors from several countries – including Japan, Korea, and Taiwan – have financed factories.
Meanwhile, at their homes when an assembly-line worker was found to be infected with SARS. As a precaution, Motorola asked more than 500 night-shift employees not to report to work. |
Singapore’s construction firms , as the government turns away or quarantines Chinese workers.听
Hong Kong’s construction due to delays in receiving building materials from the mainland.听 , where Chinese direct and indirect products account for up to 20% of materials used in building sites. More supply chain shortage situations: Fiat Chrysler Automobiles NV ing on February 14 that 鈥.鈥 Hyundai made a similar statement and said it 鈥渄ecided to suspend its production lines from operating at its plants in Korea 鈥 due to disruptions in the supply of parts resulting from the coronavirus outbreak in China.鈥听 |
Sources: WHO, CDC, World Economic Forum, AFP, ScienceDirect, Reuters, Nikkei Asian Review, ADB, QuayCo, CNN, Liebert, Inc., Time, Dezeen, The Channel Company, HBR
Silver linings
Some sectors typically stand to benefit from disease outbreaks, although the picture is not black and white, . Here are the industries that may experience positive economic outlooks under such a scenario:听
- Pharmaceuticals and medical devices – demand for medications, vaccines, personal protective equipment, and other related supplies will strengthen
- E-commerce – will experience an increase in sales as consumers shun brick-and-mortar stores to avoid infection
- Online services – expenditure in online entertainment, education, and other services such as telecommuting software will spike听
- Insurance – will bring about long-term awareness as people become more interested in health and business risk insurance packages
Mitigating disruptions
Public health emergencies can cause significant economic losses in multiple industries. They can impact even companies without direct operations in affected areas. There is a need to identify the sectors with the most potential for economic losses to encourage the development of preparedness plans and prioritize emergency funding during an outbreak.听
WEF makes the case for the private sector playing a bigger role in the traditionally public sector-led disaster response. Many companies may be compelled to act out of a sense of corporate social responsibility, but it is also good business to intervene and protect operations and markets against these biosecurity threats. The WEF鈥檚 presents five key principles for integrating public-private cooperation in order to mitigate the social, economic, and business disruptions associated with disease outbreaks:听
- Preparedness –听 address known challenges and set up mechanisms for collaboration before a crisis strikes to facilitate a rapid, well-coordinated response
- Value – build collaborations at the intersections of private-sector business interests and public-sector needs
- Trust – create trust-based relationships in advance of an emergency to enable better ways of working during an outbreak
- Agility – keep organizational processes and structures flexible for quick action in an emergency
- Innovation – encourage the ongoing development of innovative ideas and solutions to improve emergency preparation, response, and recovery efforts
Building collaborations and networks through public-private cooperation is critical to enable a more effective response to public health emergencies.听
Overall impacts
, says Brown and Smith in their paper The economic impact of SARS: How does the reality match the predictions? (2008). It also put a dent on the hotel restaurant and tourism sectors. The vast majority of losses were experienced in mainland China and Hong Kong, with more minor effects in Canada and Singapore.听
鈥淭he said losses, however, rarely affected more than one quarter’s data and often only adversely affected the economy for one month. Additionally, in many cases the losses were succeeded by often equivalent gains in the following month, quarter, or year, such that over a year the effect was marginal at most,鈥 they add. The impact from SARS was thus short-term in the places where it occurred.
MERS, on the other hand, had a considerable impact on South Korea鈥檚 economy – even though . In his paper Costly Lessons From the 2015 Middle East Respiratory Syndrome Coronavirus Outbreak in Korea, Sang-il Lee attributes this partly due to a failure in risk communication by the Korea Centers for Disease Control and Prevention (2015).听
and a loss of US$10 billion, which cut into their gross domestic product growth rate in 2015.听 The enormous socioeconomic cost highlights how crucial risk communication is during infectious disease outbreaks.听
As for Covid-19, – even if this latest virus turns out to be comparable to SARS, shares , et al, in their January 2020 Rabobank article.听
China has larger and tighter linkages with the global economy nowadays, and represents close to 20% of the world鈥檚 GDP. China-dependent industries such as consumer electronics, pharmaceuticals, and automotive .听
Economies today are more interconnected than they were 17 years ago. If the coronavirus outbreak persists, the domino effects will be felt through global growth, trade, and value chains as well as in specific sectors like transport and tourism. The Economist Intelligence Unit鈥檚 baseline scenario is that the public health emergency within China will be under control by the end of March. It is planning to cut their real GDP forecast for China this year to 5.4% from the current 5.9%.
