2294 part 1 final report.pdf - Agra CEAS Consulting

Prevention and control of animal diseases worldwide
Part I: Economic analysis: prevention versus outbreak costs
To assess the potential impact of a human pandemic caused by a likely mutation of the HPAI H5N1 virus
to humans, the literature draws extensively on the three most documented cases of human flu in the 20 th
century as well as the most recent experience of a human pandemic scare -- the SE Asian severe acute
respiratory syndrome (SARS). Latest estimates indicate that the “Spanish” flu outbreak of 1918 could
have been responsible for the deaths of 50 million people, or 2.5% of the population of the time (A292).
SARS revealed the scale and speed of the consumer/tourist response to even a limited outbreak: Asia’s
loss in regional GDP was US$18 billion in 2003 or 0.6 percentage points of the GDP growth rate in a
region otherwise described as a booming economy 90 (ADB estimates, A198).
A problem with this analysis is that pandemics behave highly unpredictably, which explains why during
previous pandemics great variations were seen in mortality, severity of illness, and patterns of spread. The
mortality of the previous century’s three pandemics varied enormously, from less than 1 million to some
50 million deaths. One consistent feature reported in all cases, nonetheless, has been the rapid surge in the
number of fatalities and their exponential increase over a very brief time, often measured in weeks.
Best-case scenarios (WHO), modelled on the mild pandemic of 1968, project global excess deaths in the
range 2 million to 7.4 million. Other estimates that factor in a more virulent virus, similar to that
responsible for the deadly 1918 pandemic, estimate much higher numbers of deaths. Both scenarios are
scientifically valid (A261). The differences arise from assumptions about the inherent virulence of the
virus, which past experience has shown to vary greatly. In the final analysis, it is impossible to predict
with any accuracy the impact that the next pandemic will have. However, all estimates, from the best-case
to the worst-case scenario, suggest that losses would be very extensive.
Recent econometric modelling based mainly on demographic data from countries of the Asia Pacific
region 91 suggests that a global influenza pandemic will have potentially large and disparate macroeconomic
consequences. Depending on the severity and duration of the pandemic, it may cost the world
1.4 to 142.2 million lives, causing global GDP to fall - at least temporarily - by 0.8% to 12.6% which
represents a loss of some US$330 billion to $US 4.4 trillion (A10).
Based on the SARS experience in Southeast Asia, the World Bank estimates that an avian influenza
pandemic could lead to a 2% drop in world GDP and cost the world economy US$ 800 billion in one year
(all losses including wider society morbidity and mortality) (A292) 92 .
Recent ADB-ERD simulations (A90, A290) estimate the potential economic impact of an avian flu
pandemic on 9 Asian countries at $113 billion (or 2.6% of their 2006 GDP), under a scenario of a mild
90 Much of the loss was linked to a rapid decline in travel and tourism, a fast growing sector now worth some US$
1.5 trillion per year, nearly 4% of global GDP. Losses also rose sharply in leisure industries and retailing.
91 Based on an Asia Pacific model consisting of 20 countries and 6 economic sectors.
92 Earlier (1999) estimates for the US alone, put the cost of a flu pandemic at US$100 to US$200 million (in present
value) depending on the assumptions (A5). The World Bank extrapolates from these figures to other developed
countries coming to a global loss of US$ 500 million in present value (A185). It is emphasised, however, that these
costs do not include losses in the developing countries and that it would be inappropriate to make a simple
extrapolation from studies of rich developed countries to relatively poor developing countries where health systems
are less developed and mortality could be much higher.
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