By William Rusk
Sick People, Sick Economies
While clearly a humanitarian crisis, the recent Ebola outbreak has proven that rapid spreading diseases are also economics crises. During the ongoing Ebola outbreak many have focused on the horrifying effects of the disease on the human body, only a 20% to 40% chance of survival given the quality of care. However, the survival rate of the economies ravaged by the effects of the disease may prove to be even grimmer. While the media is currently focusing on the frightful Ebola disease, other less scary diseases such as the flu can have even greater economic effects on industrialized economies such as the United States.
The three West African countries that have been hit the hardest by the current Ebola outbreak, Sierra Leone, Guinea, and Liberia, have also seen their economic growth gutted by the ongoing effects of the disease. Obviously tourism would be the first sector of the economies to be rocked by the pandemic, but that was just the first domino to fall. Now nearly all sectors including agriculture, mining, manufacturing, and investment have been left in shambles.
Sierra Leone in particular has quite possibly taken the biggest blow to its economy. A country that has been experiencing rapid growth and industrialization in recent years. Sierra Leone had growth rates of 15.2% in 2012 and 20.1% in 2013 (Shafer, 2013), making it the second fastest growing economy on Earth. In February, Sierra Leone predicted a 2014 growth rate of 14%. However, now that Ebola has ravaged the country that rate has been dramatically lowered to 7.5% (Shafer, 2013).
Another tragedy of the Ebola outbreak is that it has also affected the economies of other African countries that have not even had any cases of Ebola due to what economists are labeling as “aversion behavior”. The International Monetary Fund’s original 2014 prediction of African GDP growth of 5.5% has been recently recalculated to 5% largely due to the Ebola outbreak (York, 2014). With the virus not fully under control yet, African growth rates could continue to fall. Trade, tourism, and investment were cited as the main sectors affected by the outbreak (York, 2014).
Ebola has clearly had a huge economic effect on the economies of not only West African countries were the virus has been detected but also Africa as a whole. While Ebola is not currently affecting the economy of the United States, the familiar flu virus has been slamming the US economy for years. CDC stats claim the flu costs $10.4 billion dollars a year on average in hospitalizations and outpatient hospital visits, while other costs such as lost productivity cost the US about $7 billion a year (Trachtenberg, 2014). The effects of the flu are so costly because of how prolific the virus has become. It is estimated that approximately 5% to 20% of the US population contracts it each year (Trachtenberg, 2014).
So whether it is the horrific Ebola virus or the yearly flu virus it is plain to see that the economic effects are substantial. While economists tend to focus on the health of industries in an economy, it is imperative that they also focus on the health of a country’s population for a true full spectrum economic analysis.
Shafer, Jonathan (October 22, 2014) Ebola’s Economic Impact Threatens To Cripple Once-Rapidly Growing Sierra Leone. The World Post. Retrieved from http://www.huffingtonpost.com/jonathan-shafer/ebolas-economic-impact-th_b_6030428.html
Trachtenberg, Drew (October 22, 2014) Flu Poses Far Greater Risk Than Ebola to U.S. Economy. Daily Finance. Retrieved from http://www.dailyfinance.com/on/flu-outbreaks-economic-cost-ebola/
York, Geoffrey (October 22, 2014) Ebola fears dragging down African economies. The Globe and Mail. Retrieved from http://www.theglobeandmail.com/report-on-business/ebola-fears-dragging-down-african-economies-in-multiple-sectors/article21242475/