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The Economic and Social Impacts of Avian Influenza

Updated: Friday, October 20, 2017 1:36 AM EDT
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The Economic and Social Impacts of Avian Influenza

S. Smith 2005

The avian influenza is one of today's biggest threats to the World's socio-economic health. To examine this, we must begin by looking at the general features of this possible pandemic. First, there are two levels on which to look at possible costs and impacts. Currently, the avian flu virus, H5N1, has been transmitted only from animal-to-animal and animal-to-human. The probability increases that the virus will enter a second stage and spread from human-to-human thus causing a world wide pandemic and greater costs than the current situation.

Second, the economic and social aspects are an important part of the this problem. In general, there are two kinds of economic costs coming from the avian influenza as from other contagious diseases. The cost of increased sickness and death of humans and birds is the first cost a society must be responsible for. The second cost is of the strategies by the public and private sector to prevent, control, and or cope with the illness and death attributed to the avian influenza. The pay-off would be a reduction or avoidance of deaths to the population. Since most governments and nations work within a budget, it would only be natural for economics to play a part in the response strategy implemented.

Third, while currently the avian flu has mostly been identified in East Asia, there have been cases in other regions and countries due to wild bird migration. If H5N1 spreads to humans, the pandemic would reach to all parts of the globe quickly. So you can see that stopping the Avian influenza now would be in everyone's best interest.

When creating policies concerning strategy, the following should be considered: One, an integrated approach that brings together human and animal health, areas of agriculture and rural development, finance and planning, and economics. This cooperation should be on both the national and global levels.

Second, there should be a balance of short and long-term solutions to control the disease at its source in the agricultural setting. Since the Avian flu is becoming epidemic in East Asia; it will need a strong effort to suppress. It is also possible that a human pandemic could still surface from a different strain of flu virus. Therefore, it makes sense to strengthen institutional, regulatory, and technical capacity of human health, animal health and other related topics.

Third, even though an individual country or government may have adequate plans in place, it should be backed by global resources. Controlling a pandemic can be overwhelming, so they may need help handling the political, social and economic costs of the policy which benefits the global community, not just the people of that particular nation.

Lastly, using research to complete the knowledge base is essential as well as a way to share information with policymakers, the public, and experts are crucial.

Now we will look at costs and impacts more specifically as if a human flu pandemic were to spread worldwide. According to Milan Brahmbhatt, the Spanish flu of 1918-19 killed 50 million. In today's terms that would be 150 million deaths, which gives us a mild picture of the human costs involved.

More problematic would be the economic impact of citizens trying to avoid infection by limiting personal contact with other citizens. This was a response of people during the outbreak of SARS. This triggered absenteeism in the workplace, disruption of production and a shift toward costly procedures. It affected tourism, retail sales, mass transportation, hotels and restaurants. Of course, this led to an economic loss of almost 2% of East Asian GDP in the second quarter of 2003. If this would have been a global influenza pandemic, it would equate to 200 billion in only one quarter.

Evidence suggests that during the SARS outbreak, costs coming from the disruption and panic were heightened by lack of communication to the public. People over-estimated the chance of infection and illness. due to a lack of accurate information. Governments need to learn how to gain the trust of the population thereby minimizing the disruption and panic and empowering them to help combat the disease.

We are not only dealing with the price of disruption, but if the avian influenza becomes a global pandemic, the amount of the world output would suffer sizeable losses due to a reduction in productivity. If the world labor force is ill or dying, then there would ultimately be a decline in productivity. Not to mention the costs of medical treatment and hospitalization.

There have been many studies completed in the last 5 years detailing possible losses based upon past patterns. A worldwide influenza outbreak could spawn between 100,000 and 200,000 deaths in the United States. Factor in the hospitalizations, outpatient visits, and additional illnesses and you have losses of $100 to $200 billion dollars in the United States alone. Using this information and applying it to other High-income nations, the figures could go as high as $550 billion. Therefore, the economic benefits of slowing the disease or stopping it altogether are great.

Recent Avian Influenza ( Bird Flu ) Findings

Finally, let's take a look at the current facts, as we know them. Since the Virus transmission has occurred in poultry and other birds located in rural East Asia, the losses have been minimal and specific to their economies. On a global scale, the costs have been limited, but with continued outbreaks, the losses could significantly rise.

Economically, the most direct impact includes the loss of diseased poultry for the farmer and to the businesses that are a part of the poultry industry, such as traders, feed mills, and breeding farms. The largest losses have occurred in Thailand and Vietnam, with smaller losses in Cambodia, China, Indonesia, and Lao PDR.

The contribution of the poultry industry toward the national economies in East Asia range from 0.6% to 2%, with most countries at an average of a little over 1% of GDP. Vietnam's poultry output is down by 15% or about $50 million, but if the same declines hit Indonesia, the costs could amount to $500 million.

These losses are small globally, but in Vietnam rural households have been impacted the most. The government has only been able to partly compensate the farmers. On a larger scale, economies in Indonesia and Thailand has a large commercial poultry industry. The losses would be felt in greater unemployment of wage laborers, and bankruptcies of companies.

Indirect costs would be incurred by a fall in international tourism due to disease fears. So far this doesn't seem to have occurred since the number of tourists has continued to grow in 2004 and 2005. Those numbers could change due to increased media exposure on avian influenza. The estimation that a 5% drop in business and tourist arrivals have been predicted.

Finally, control and prevention costs also have to be included. Governments must purchase poultry vaccines, medications, and other inputs. They need to hire workers for cleanup and culling, diagnosis and surveillance, and additional methods of transportation. Also included is the compensation for poultry farmers, which could provide incentives for the owners to report any avian influenza outbreaks. All of these costs could be an economic burden on governments.

In conclusion, affected countries are looking at policy that would strengthen or build effective systems for assessment, prevention and containment of any health problems facing both animal and human health. Global support in these initiatives would be beneficial to everyone concerned about avian influenza.

Reprint of this article is forbidden unless expressly permitted by the author

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