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Canadian financial analysts predicted that an avian flu pandemic would have dire consequences on the global economy, its impact comparable to the Great Depression of the 1930s.
In a first-of-its-kind report on the financial impact of a possible pandemic, BMO Nesbitt Burns researchers warned that an outbreak could devastate the airline and hospitality industries, trigger mass foreclosures and bankruptcies, decimate insurance companies, and disrupt food chains as people switched from animal to vegetable diets all costing hundreds of billions of dollars.
"Its economic impact could be comparable, at least for a short time, to the Great Depression of the 1930s," said BMO chief economist Sherry Cooper, noting that the report, dubbed "An Investor's Guide to Avian Flu," "is not meant to be alarmist" since an avian flu pandemic is unlikely to occur anytime soon and would only last a few months.
Influenza A type H5N1 was first discovered in terns in South Africa in 1961. The first known human infections were in Hong Kong in 1997 when six of 18 people infected died.
Bird flu has killed 61 people across Asia, 42 of them in Viet Nam, since late 2003, and ravaged poultry stocks in the region as well as in parts of Russia and Kazakhstan.
Health experts have warned that the bird flu virus could spark a global pandemic if it develops the ability to spread quickly among humans.
There are no vaccines available to curb its spread in humans, although some are being developed. Only nine countries have the capacity to produce vaccines on a commercial scale.
Using current manufacturing processes, they are unlikely to be able to deliver enough bird flu vaccines to stop a pandemic, said Donald Coxe, co-author of the report.
A pandemic would likely start in Asia and spread around the world. Deaths could top more than 50 million. Billions of people would fall sick and billions more would be too afraid to go to work, according to health officials cited in the report.
As well, affected countries would likely force quarantines and close stock markets. Work absenteeism from deaths and illness would skyrocket, Coxe predicted.
Attendance of sporting events, theme parks and movies would drop, if not banned outright. Patronage of bars, restaurants and hotels would plummet, he said.
As more people stayed home, e-commerce might flourish, as long as postal and courier services were maintained.
"Financial markets could prove as vulnerable as unvaccinated humans," Coxe said.
Treasury markets would be vulnerable to a sell-off by Asian banks whose holdings are enormous, she added.
And, the high death rate would create a housing oversupply and puncture the current real estate bubble, Cooper said.
"In relatively short order, the deceleration of almost all non-essential economic activity would trigger a rampant decline in spending," leading to deflation and massive job losses, she concluded.
Russian bird flu heads westwards
As Canadian economists made such a warning, Russia's bird flu epidemic continued westwards following an outbreak of the disease in Siberia in mid-July.
Inspectors investigated deaths of domestic poultry in Kalmykia, near the Caspian sea, as a mass cull of birds continued in the Urals.
Chickens, geese and ducks were reportedly infected and villages near Chelyabinsk were under quarantine.
More than 13,000 birds have died from the highly pathogenic H5N1 strain of bird flu, which has killed at least 57 people in Southeast Asia since 2003. About 112,000 birds have been slaughtered and incinerated ministry said.
(China Daily August 19, 2005)
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