Economic Consequences of a Pandemic ...
Category Business Continuity Management - Avian Flu Pandemic
The current epidemic of the highly pathogenic H5N1 strain of avian influenza, with a mortality of 58%, appears relentless in Asia, particularly in Vietnam and Thailand.1 Although inefficient, there is some evidence of human-to-human transmission for the H5N1 virus.2 A possible catastrophic pandemic could, therefore, emerge should re-assortment of viral antigens occur resulting in a highly infectious strain of H5N1. Influenza pandemics in 1917–18, 1957–58, and 1968–69 have already caused approximately 15, 4, and 0•75 million deaths worldwide, respectively.
A vaccine for H5N1 will not be available in the foreseeable months. Even if pharmaceutical manufacturing begins soon after an outbreak, there would not be a sufficient supply for the countries most in need—ie, the Asian nations. Antiviral drugs are consequently the only specific treatment, pending availability of effective vaccines.
Governments and health agencies should also consider planning for clinical trials, for instance a combination of both neuraminidase inhibitors, with or without other potential novel drugs, such as short-interfering RNAs and interferon.3 These trials, if initiated at the early stages of a pandemic, could provide useful information for further patient and outbreak management in later stages. The geographic location of vaccine manufacturers in developed countries would also delay poorer Asian nations from obtaining the updated influenza vaccine. Perhaps vaccine and neuraminidase inhibitor manufacturing activities should also begin in Asia to deal with such deficiencies. The ethics of maintaining drug patents in a potential worldwide catastrophe is questionable. Epidemiological modelling suggests that influenza is more infectious than severe acute respiratory syndrome, and that severe acute respiratory syndrome infection control measures might not be adequate for a pandemic of influenza.17 There will, therefore, be an overwhelming strain on health-care workers and hospitals in an H5N1 pandemic, and staff could be rapidly demoralised and degenerate into deserters, if colleagues develop hospital-acquired H5N1 infection, especially if not given adequate intensive-care unit treatment.18 Protection of core personnel should also be planned to underpin recovery in the aftermath, when many key players in health care and governmental institutions would have perished.
Gardener Harris of the New York Times writes in his article of October 7, 2005:
A plan developed by the Bush administration to deal with any possible outbreak of pandemic flu shows that the United States is woefully unprepared for what could become the worst disaster in the nation's history.
A draft of the final plan, which has been years in the making and is expected to be released later this month, says a large outbreak that began in Asia would be likely, because of modern travel patterns, to reach the United States within "a few months or even weeks."
If such an outbreak occurred, hospitals would become overwhelmed, riots would engulf vaccination clinics, and even power and food would be in short supply, according to the plan, which was obtained by The New York Times.
The 381-page plan calls for quarantine and travel restrictions but concedes that such measures "are unlikely to delay introduction of pandemic disease into the U.S. by more than a month or two."
The plan's 10 supplements suggest specific ways that local and state governments should prepare now for an eventual pandemic by, for instance, drafting legal documents that would justify quarantines. Written by health officials, the plan does yet address responses by the military or other governmental departments.
Pandemic – Business Continuity Planners what are you doing?
We, as business continuity planners seem to be wary of addressing the issue of a pandemic as a viable scenario for planning. I recently did a tabletop simulation for a client and a presentation on pandemics at a business continuity summit for another client. The tabletop participants reflected on the experience and uniformly expressed to me that the tabletop was one of the most stressful and frustrating experiences that they had participated in. The business continuity summit attendees and many of the speakers who followed me, continued to comment on the material presented, stressing that they needed to rethink their plans. Participants in both events expressed the hope that a pandemic would not materialize.
Pandemics cause major economic losses due to absenteeism. Experts predict that during a pandemic up to 30% of the global workforce could either be off work due to sickness or stay away due to fear. Absence levels at the expected rates would cause severe problems.
The economic impact of H5N1 will be felt around the world. The impact will initially appear in two primary aspects of business. The first will be the availability of the workforce, the second and more unique impact will be in the market place.
Helen Branswell of the Canadian Press wrote on August 17, 2005 in her article entitled, “Flu pandemic could trigger second Great Depression, brokerage warns clients”:
A major Canadian brokerage firm has added its voice to those warning of the potential global impact of an influenza pandemic, suggesting it could trigger a crisis similar to that of the Great Depression.
Real estate values would be slashed, bankruptcies would soar and the insurance industry would be decimated, a newly released investor guide on avian influenza warns clients of BMO Nesbitt Burns.
"It's quite analogous to the Great Depression in many ways, although obviously caused by very different reasons," co-author Sherry Cooper, chief economist of the firm and executive vice-president of the BMO Financial Group, said in an interview Tuesday.
"We won't have 30-per-cent unemployment because frankly, many people will die. And there will be excess demand for labour and yet, at the same time, it will absolutely crunch the economy worldwide."
A leading voice for pandemic preparedness said the report is evidence the financial and business sectors - which have been slow to twig to the implications of a flu pandemic - are finally realizing why public health and infectious disease experts have been sounding the alarm.
"I think that this particular report really signifies the first time that anyone from within the financial world, when looking at this issue, kind of had one of those 'Oh my God' moments," said Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota.
"The financial world is finally waking up to the fact that this could be the boulder in the gear of the global economy," he said, suggesting a pandemic could trigger an implosion of international trade unlike anything seen in modern history.
"All the other catastrophes we've had in the world in recent years at the very most put screen doors on our borders. This would seal shut a six-inch steel door," Osterholm said.
Cooper, a highly influential figure in the Canadian financial sector, wrote the report with Donald Coxe, a global portfolio strategist for BMO Financial Group.
They warn investors the economic fallout out of a pandemic would inflict pain across sectors and around the globe.
Airlines would be grounded, transport of goods would cease, the tourism and hospitality sectors would evaporate and the impact on exports would be devastating, Cooper wrote.
"This would trigger foreclosures and bankruptcies, credit restrictions and financial panic," she warned, suggesting investors reduce debt and risk in their portfolios to be on the safe side.
Absence of purchases due to illness and psychological reactions to a pandemic will present a new form of business impact that is currently not assessed as part of the traditional business impact assessment; and as such, it is not addressed in any business continuity, disaster, crisis management or recovery plans. Another area that has not been addressed in impact assessment or plans is the loss or restriction of a company’s revenue. Traditional plans start with an assumption that the marketplace is still viable; a potentially false assumption. Traditional plans are designed to get an organization back into their market as quickly as possible – RTO, RPO and MTO come to mind (RTO = Recovery Time Objective, RPO = Recovery Point Objective, MTO = Maximum Tolerable Outage). In the case of a pandemic markets may no longer be viable. If your market is materially impaired, a consequence is that the revenue that is derived from that market may be restricted and/or completely gone.
In another article, published on October 7, 2005 (NewsTarget.com) entitled, “Economic Shock Waves From Avian Influenza Spreading Faster than the Disease” the following is pointed out:
The Avian influenza crisis in Asia has already caused more than $10 billion dollars in damage in the economies of the most-seriously affected countries, but this is just the tip of the iceberg compared with the possible global economic consequences of a human influenza pandemic according to a study, Thinking Ahead: The Business Significance of an Avian Influenza Pandemic, released today by Bio Economic Research Associates (bio-era™).
“According to the quantitative measures we developed for assigning relative economic risk exposure to infectious disease outbreaks for countries in Asia, Hong Kong and Singapore are especially vulnerable to the initial economic shock waves that would ensue from a pandemic,” said James Newcomb, Managing Director and principal author of the bio-era report. “However, the secondary impacts on other countries, especially China, could have far-reaching impacts for economies around the world, including the US,” he added.
