A pandemic at the worst possible time

The banking crisis that has slowed the global economy now has another complicating factor to consider.  The outbreak of Swine Flu (or some hybrid thereof) in Mexico has already caused commodity prices to plunge, especially for crude oil and natural gas.  Analysts are warning that, if this outbreak turns into a pandemic, the flu’s effect on the global economy will be severe.  Already, press reports estimate the loss to the Mexican economy from cancelled tourist visits amount to $14M (U.S.) per day.  Travel Advisories and Medical Emergencies are now being declared by a variety of supranational, national and local authorities.

The history of the spread of highly contagious diseases provides some benchmarks for comparison and analysis.  The most commonly cited pandemic is the ‘Spanish’ Flu epidemic in1918-1919.  It spread rapidly, ultimately infecting approximately 400 million people, from which about 30 million died (7.5% mortality).

The Severe Acute Respiratory Syndrome (SARS) outbreak in 2003 resulted in 8,450 people being infected with the virus in 28 countries by the end of June, of which at least 810 died (9.6% mortality).

While most people with the SARS infection did not pass the virus to others, a small minority seemed to be highly infectious and came to be known as ‘superspreaders’.  Finding and isolating them was the key to preventing further transmission of the disease. The greatest risk from SARS superspreaders was to the poorest nations that do not have the medical infrastructure, organization or resources to implement stringent public health protocols.  The same is true for any other highly contagious viruses.

The Canadian Public Health Agency document Learning from SARS provides the following statistics on the impact of SARS in Canada: “Forty-four people died from SARS.  Outside of Asia, Canada was the country hardest hit by SARS. As of August 2003, there had been 438 probable and suspect SARS cases in Canada, including 44 deaths. The majority of SARS cases and all deaths were concentrated in Toronto and the surrounding Greater Toronto Area]. The toll on health care workers was high: more than 100 became ill and three succumbed.”  The mortality rate for SARS in Canada was, therefore, 10.0%, which was close to the international average.  (By comparison, there were 511 deaths in Canada due to C. difficile in 2003.)

The concern with the current outbreak of Swine Flu is its rapid spread and the peculiar differences in the mortality rates within and outside of Mexico.  The key questions are:

-         can health systems detect and isolate new cases quickly enough to prevent further spread;

-         will mortality rates eventually rise outside of Mexico to match those inside the country;

-         if the mortality rates stay low outside of Mexico, why is this the case; and

-         will the negative effects on the global economy be limited and short term, or not?

The Canadian economy will feel the effects of the Swine Flu outbreak whether or not the disease makes strong inroads into our population.  Labour shortages for harvesting Canadian crops will be one of the first problems to deal with.  However, the major impact will be felt due to the restraining effect of the virus on consumer spending in the United States.  As people sequester themselves, either by choice or by edict, the rate of spending will slow, and so will the economies of all three North American states.  The net effect will be to nullify consumer confidence and economic stimulus measures.  The next seven to ten days will be the crucial period for determining how significant the impact will be on all of us.

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