SARS

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SARS

• IMPACT ON ECONOMIES

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Jong-Wha Lee - Warwick J. McKibbin

• First, fear of SARS infection leads to a
  substantial decline in consumer demand,especially
  for travel and retail sales service.
• Second, the uncertain features of the disease
  reduces confidence in the future of the affected
  economies.
• Third, SARS undoubtedly increases the costs of
  disease prevention, especially in the most
  affected industries such as travel and the retail
  sales service industries.

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SIMULATION
Jong-Wha Lee - Warwick J. McKibbin
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SIMULATION
Jong-Wha Lee - Warwick J. McKibbin
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SIMULATION
Jong-Wha Lee - Warwick J. McKibbin
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CONCLUSION

• The impact of SARS is estimated to be large on
  the affected economies of China and Hong Kong.
• This impact is not due to the consequence of the
  disease itself for the affected people, but the
  impact of the disease on the behavior of many
  people within these economies.
• These results illustrate that the true cost of
  disease is far greater than the cost to a health
  budget of treatment of the cases involved.

Jong-Wha Lee - Warwick J. McKibbin Revised May
20, 2003
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Susan J. AdamsIMF OfficeHanoi

• STAGES OF ESTIMATION
• First round quantifiable channels of impact
• are assumed in the tourism, retail and external
• trade sectors (estimating now).
• Second round quantifiable effects could also
• include manufacturing and financial services
• lower FDI inflows (will estimate later this
  year).
• Prolonged psychological and social
• impacts will not be observable or
• measurable until much later, if ever.

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IMPACT OF SARS IN VIETNAM
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ONTARIO, CANADA
Updated Tue. Aug. 12 2003 356 PM ET 
SARS claims 1 billion hit from Ontario
economy Canadian Press TORONTO Ontario's
Conservative government is being forced to
withdraw 1 billion from its reserve and
contingency funds because of the economic impact
of SARS, Finance Minister Janet Ecker said
Tuesday. Ecker, who released her first-quarter
economic statement at the Ontario legislature,
said the province's two rainy-day funds currently
contain 1.7 billion, but will be depleted to
700,000.
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Economical development in China
Foreign exchange receipts from tourism,
which accounts for half of total services
exports, declined declined by 20 percent in the
first half of 2003, and is estimated to drop by
US8.8 billion (4 percent) during
2003. (produced by Min Zhao),
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CHINA STILL MAKES IT

• China's economy continued to grow fast in the
  first half of 2003 despite the negative impact of
  Severe Acute Respiratory Syndrome (SARS), thanks
  to strong performance in foreign trade, a steady
  rise of consumer demand and more foreign direct
  investment (FDI), said an annual report issued
  Friday in Bangkok by the Economic Committee of
  the Asia-Pacific Economic Cooperation (APEC)
  forum. In contrast to "a hesitant recovery" for
  the global economy, China's economy registered a
  year-on-year growth of 8.2 percent in the first
  half this year, with a robust 9.9 percent growth
  in the first quarter, and is predicted to grow
  around 7 percent for the whole of 2003, said the
  report titled "2003 APEC Economic Outlook," which
  will be submitted to the APEC ministerial meeting
  on Saturday.

Last updated at (Beijing Time) Friday, October
17, 2003
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TAIWAN HEADLINES

• Chou Ji, director of the CIER Center for Economic
  Forecasting, said the slower growth pace in 2003
  derived from the blow to domestic consumption,
  including tourism, delivered by the outbreak of
  severe acute respiratory syndrome, triggering a
  0.08 percent contraction in the second quarter.

PublishedOctober 17, 2003SourceTaiwan News
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SINGAPORE

• For the Singapore economy - one of the worst hit
  by Sars - the IMF has forecast a 4.2 per cent
  expansion, a strong rebound from this year's
  projected 0.5 per cent. The Singapore government
  recently said that barring 'unexpected shocks',
  the economy should grow 3 to 5 per cent next
  year. Growth this year is tipped at zero or one
  per cent.

Published October 24, 2003
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GLOBAL ECONOMY

• WHILE THE WORLD Health Organization declared on
  July 5 that the epidemic of severe acute
  respiratory syndrome, or SARS, had been
  contained, the world economy will continue to
  feel the effects of the deadly disease for some
  time. SARS, which infected 8,436 people in 30
  countries and killed 812 since the first case was
  reported in China last November, will cost the
  global economy 30 billion, according to a widely
  cited estimate by Morgan Stanley's chief
  economist. IT analysts report that lowered
  technology investments will, like the disease
  itself, hit Asian countries such as China and
  Taiwan the hardest. Aberdeen Group says both
  demand for technology goods and the supply of
  silicon chips and other computer components will
  drop. That will cost China an estimated 1.7
  billion in IT spending as global technology
  expenditures will drop by 2.2 billion, Aberdeen
  predicts. IDC (a sister company to CIO's
  publisher) projects China will lose about 1
  billion in information technology spending. That
  translates to an IT spending growth rate of 6.1
  percent instead of 7.6 percent for 2003.

Aug. 15, 2003 Issue of CIO Magazine
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Short-term Economic Impact of SARS

• Consumer confidence has dramatically declined in
  a number of economies, leading to a significant
  reduction in private consumption spending. Much
  of the impact stems from the great uncertainty
  and fear generated by SARS. People have opted to
  stay at home to reduce the probability of
  infection.
• Service exports, in particular tourism-related
  exports, have been hard hit.
• Investment is affected by reduced overall demand,
  heightened uncertainties, and increased risks.
  Excess capacity will emerge or increase.
  Furthermore, foreign investment inflow may be
  delayed or reduced in reaction toSARS.
• While increased government spending will mitigate
  the impact, the ability of governments to revive
  economies facing widespread reductions in private
  spending is limited.

Emma Xiaoqin Fan
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Why has the Impact of SARS been so pronounced?

• the almost costless and rapid transmission of
  information due to the development of modern
  media and communication technologies, and
• the lack of sufficient medical information on
  SARS.

Emma Xiaoqin Fan
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The SARS epidemic demonstrates that

• The accurate, timely, and transparent provision
  of information on the nature and extent of
  diseases by governments is critical for educating
  the public about the real risks and reducing
  public fears and uncertainties.
• Early identification and containment is critical,
  as any delays will create greater costs later on.
• SARS is merely one of many contagious diseases
  that could potentially flare up.
• In particular, there is a need to minimize the
  occurrence of all contagious diseases to
  effectively respond to emergency situations and
  to strengthen health systems.
• The global implications of serious contagious
  diseases means that governments need to intensify
  cooperation and coordination.
• Government budgets need to be capable of handling
  unheralded public health crises.

(After Emma Xiaoqin Fan)