The huge economic toll of widespread disease is rarely accounted for when officials set budgets—with the result that countries frequently find their finances in shambles during and after a pandemic.
While large-scale infectious epidemics can exact a high price on a country’s human capital, a new report by Harvard University researchers points out that a pandemic can devastate the economy as well. Consider that Guinea, Sierra Leone, and Liberia have suffered losses of 10% of their gross domestic product thanks to the Ebola virus, and many Caribbean nations are experiencing a significant loss of tourism dollars as fears of the Zika virus drive away vacationers.
In addition to the direct economic costs of things like a decline in tourism and a slowdown in retail sales or trade, the authors maintain that mortality-related costs, including the value of years of life lost, are a huge potential burden. Citing data in a report issued by the US National Academy of Medicine’s Commission on a Global Health Risk Framework for the Future, the authors suggest that an average global economic loss of $60 billion per year over time as a result of pandemics doesn’t even factor in mortality-related costs that might add as much as $430 billion to that figure, for a potential annual global cost of $490 billion—at least during a period when pandemics are occurring.
In calling attention to the economic toll of pandemics, the authors acknowledge that it is difficult to predict whether a country will experience an infectious disease outbreak and how severe it will be. But they do note that the likelihood of outbreaks is rising due to the increased emergence of new diseases, the ease with which people—and diseases—can cross borders, and increased human-animal interaction. And while medical care is advancing, which presumably would enable a higher cure rate and offer a buffer against an economy’s implosion, the huge growth of social media means dire warnings can spread fear at lightning speed: tourist spots, government institutions, and retail establishments can be shuttered and borders closed, beginning the downward financial spiral.
The authors suggest that it’s time for economic forecasting entities to take into account each country’s potential for financial losses due to outbreaks before these outbreaks occur. And it has to occur on a local level—so far, most of the economic forecasting that incorporates disease outbreaks has focused on impacts on a global scale. First, an individual country’s vulnerability needs to be measured by looking at its history of infectious disease outbreaks; environmental conditions that might portend an outbreak, such as the presence of the Aedes aegypti mosquito; human factors such as a lack of sanitation or questionable food-production policies; and the overall strength of its healthcare system. Second, each country needs a thorough examination of its public-health system’s ability to respond to a crisis, which would enable governments and their partners to establish priorities. Third, each country’s main base of industry needs to be looked at in terms of how well it would fare in a public health crisis. For example, countries that depend heavily on money from tourists or the exportation of food products might suffer unduly.
Finally, all of these assessments should be used to generate a comprehensive picture of a country’s overall vulnerability that can be utilized by entities such as the International Monetary Fund and the World Bank in creating a personalized risk assessment for that country.
The researchers call for the World Health Organization to lead the global health community in making this endeavor come to fruition instead of relying on financial institutions or private companies. But it’s not going to be instantaneous. ”It would probably take a couple of years to establish a consistent approach to country-specific economic vulnerability analyses, but it’s not switching on a light,” notes Peter Sands, MPA, a senior fellow at the Harvard Kennedy School of Government and an author of the report. “Simply acknowledging the need to consider these risks would have benefit. The rigor of the analysis could be improved over time.”
Laurie Saloman, MS, is a health writer with more than 20 years of experience working for both consumer and physician-focused publications. She is a graduate of Brandeis University and the Medill School of Journalism at Northwestern University. She lives in New Jersey with her family.