Bird flu 'could take 142m
lives'
Worst case economic cost is $4.4 trillion
SYDNEY, Australia (CNN) -- As many as 142 million people around the
world could die if bird flu turns into a "worst case" influenza
pandemic, according to a sobering new study of its possible
consequences.
And global economic losses could run to $4.4 trillion -- the
equivalent of wiping out the Japanese economy's annual
output.
The study, prepared for the Sydney, Australia-based Lowy Institute
think tank, says there are "enormous uncertainties" about whether a
flu pandemic might happen, and where and when it might happen
first.
But it says even a mild pandemic could kill 1.4 million people and
cost $330 billion.
In its "ultra" or worst-case scenario, Hong Kong's economy is
halved, the large-scale collapse of Asian economic activity causes
global trade flows to dry up, and money flows out to safe havens in
North America and Europe. Deaths could top 28 million in China and
24 million in India.
The report's release in Sydney Thursday comes as two more countries
in Europe -- Germany and Austria -- report that the deadly H5N1
bird flu virus has been detected in wild fowl (Full story).
The Lowy Institute's report, titled Global Macroeconomic
Consequences of Pandemic Influenza, looks at four possible
scenarios:
Mild, in which the pandemic is similar to the 1968-69 Hong Kong
flu;
Moderate, similar to the 1957 Asian flu;
Severe, similar to the 1918-19 Spanish flu (which infected an
estimated 1 billion people and claimed as many as 50 million
lives);
An "ultra" scenario that is worse than the Spanish flu
outbreak.
Although the 1918-19 flu outbreak probably originated in Asia, it
was known as the Spanish flu because the Spanish media were the
first to report on its impact.
Since bird flu first appeared in China's Guangdong province --
which adjoins Hong Kong -- in 1996, the disease has claimed more
than 90 human lives -- almost all in Asia, with the most recent
deaths in Turkey.
In addition, about 200 million birds around the world have died or
been culled.
Outside of Asia, there have been bird flu outbreaks in Greece,
Italy, Turkey, Croatia, Russia, Azerbaijan and Romania in Europe,
Iraq and Iran in the Middle East and in Nigeria, Africa. (Full
story)
This spread of the disease from Asia to the fringes of Europe in
recent weeks has prompted massive global attention on possible
prevention measures, with the U.S., the EU and countries such as
China and Japan committing hefty financial and human resources to
combating the disease.
But the new Lowy Institute report, by the Australian National
University's Prof. Warwick McKibbin and research fellow Dr
Alexandra Sidorenko, says the major difficulty with influenza
vaccine development is "the need to hit the constantly moving
target as the virus mutates very rapidly."
Their observation follows a scientific study released last week
which said bird flu was much more diverse than previously thought,
with at least four distinct types of the deadly H5N1 virus (Full
story).
In that study, a group of 29 scientists around the globe found that
the virus was both more genetically diverse and able to survive in
birds showing no signs of illness.
One of the researchers, Dr. Malik Peiris, professor of microbiology
at Hong Kong University, told CNN on February 8 that regional virus
types meant there was a need to look for "broad cross-protection"
rather than a single vaccine.
Peiris said that while wild birds may contribute to the
introduction and spread of bird flu, the perpetuation of the
disease was through stocks of domestic poultry. He said no country
was fully prepared to combat the disease, which needed to be
tracked back and tackled at its source.
Further mutation
So far, all but a handful of cases of human sickness have been
caused by direct contact with sick birds, suggesting the virus is
unable to move easily among humans.
But health officials have warned that with continued exposure to
people, the virus could mutate further and develop that
ability.
While scientists scramble to prepare an effective medical response,
the Lowy Institute report primarily looks at the macroeconomic
impact of a flu pandemic.
It said there would be four main sets of "shocks" for each
scenario: shocks to the labor force (through deaths and dislocation
to production); additional supply shocks through increased costs;
demand shocks; and risk premium shocks, involving financial
flows.
In the worst scenario, it said the death toll could reach 28.4
million in China, 24 million in India, 11.4 million in Indonesia,
4.1 million in the Philippines, 2.1 million in Japan, 2.0 million
in the United States and 5.6 million in Europe. In the world's
least developed countries, the toll could top 33 million.
The study's figure of 142 million possible deaths is similar to an
earlier estimate of 150 million deaths by World Health Organization
senior official David Nabarro, when he was named as head of the
United Nations avian flu response team in September last
year.
The Lowy Institute study found that East Asian economies would be
proportionately more affected than the United States or Europe. In
the "ultra" or worst-case scenario, Hong Kong's economy, for
example, would shrink by more than 53 percent.
"This is clearly a major economic catastrophe," the report's
authors note.
"The large scale collapse of Asia causes global trade flows to dry
up and capital to flow to safe havens in North America and
Europe."
Japan would experience a larger shock than other industrialized
economies, but a smaller shock than the rest of East Asia. However,
its integration with the collapsing East Asian economies means it
would take a further shock through declining trade flows.
The authors say a "key part of the story" is the monetary policy
response.
"Those countries that tend to focus on preventing exchange rate
changes are coincidentally the countries that experience the
largest epidemiological shocks," they say.
"This is particularly true of Hong Kong, which receives the largest
shocks and has the most rigid exchange rate regime."
The report concludes that a "large investment of resources" should
be dedicated to preventing an outbreak of pandemic influenza.
