Swine flu is the last thing the fragile global economy needs
April 29, 2009 – 12:47 pmWhen the US economy catches a cold, the whole world sneezes. That’s the cliche many in finance employ to describe the interrelated nature of the global economy. But what happens when the US economy catches something a bit more severe? We may be about to find out.
The US government declared a health emergency following the discovery of two dozen cases of the same strain of swine flu that had by Monday killed over 100 in Mexico. As Homeland Security chief Janet Napolitano counseled, there’s no reason to panic just yet. This is just a precaution. But with the US economy already suffering a bad case of the lurgy – bringing the rest of the globe down with it – the last thing it can sustain would be a serious epidemic. The last time the world withstood anything similar was the 2002-2003 bout of severe acute respiratory syndrome (SARS), which emanated in China’s Guangdong province and spread to some three dozen countries.
The human toll from SARS, at nearly 800 deaths, was not terribly high. It was a pin-prick compared to the Spanish influenza at the end of World War 1, when an estimated 20m-100m died. But the resulting panic caused many travel-related businesses in the hardest hit areas to suffer severely. The World Health Organisation estimated that international travel to areas such as Hong Kong, Beijing and Toronto fell by more than half, with hotel occupancy down 60%.
This time could be different. Even assuming the Mexican flu strain is no more deadly than SARS, it comes at a fragile moment. The financial crisis and resultant economic contraction is already taking heavy casualties on the businesses and economies most dependent on trade, transportation, tourism and lodging, which are most susceptible to the flu bug.
Source:http://www.business-standard.com/india/brv_storypage.php?autono=356432