Official Bank Sites Related Information June 29, 2006—The avian flu virus, H5NI, has, in the last six to nine months, gone global, spreading from East Asia to affect over 40 more countries. The number of human infections and deaths reported to WHO has accelerated in the past six months. There were 41 deaths in all of 2005, but 54 in only the first half of 2006, more than twice the pace of last year. The World Bank estimates a severe avian flu pandemic among humans could cost the global economy about 3.1% of world gross domestic product - around US$1.25 trillion on a world GDP of $40 trillion. The severe case scenario, prepared by the Bank’s Development Economic Prospects Group, was presented by the Bank’s lead economist for East Asia, Milan Brahmbhatt, in a speech to the First International Conference on Avian Influenza in Humans at the Institut Pasteur in Paris, France. Brahmbatt told the conference, the severe case scenario was based on a 1% mortality rate – or about 70 million people. He said mortality rates from a pandemic would be much higher in developing countries, with economic losses expected to be twice those of developed countries. To date, Brahmbatt says in most countries the impact of avian flu at the macroeconomic level has been relatively limited, mainly because the poultry sector is a relatively small part of the world economy. “But on the other hand, the impact on the poultry sector itself has been pretty severe,” he said. “Partly, that’s happening because birds are dying or they have to be killed off as a means of controlling the disease. “Secondly, what’s happening is that in many places, there have been big declines in demand for poultry due to exaggerated public fears of infection (even though there is no danger of this from properly cooked poultry) and that’s hit farmers in the poultry sector pretty severely.” Brahmbatt says in Romania, for example, which has suffered more than 100 outbreaks over recent months, domestic poultry sales have fallen by 80%, bringing many producers to the verge of bankruptcy. “In Iraq, only 10% of semi commercial farms remain operational and there have also been large losses in Turkey. He says it’s also been the case in France, which is one of the leading poultry producers in the European Community. Even in Brazil, which has not experienced an outbreak of the disease, weakening world demand and lower prices have induced the main suppliers to reduce production by 15% this year. According to the Food and Agriculture Organization (FAO), over 200 million poultry had died or been culled since the end of 2003, most in East Asia. Brahmbatt says the largest declines happened in Vietnam and Thailand, with the numbers there equal to 15 to 20% of the stock of poultry. But he says Thailand provides an example of a recovery based on strong policy responses. The country, which is the only large net exporter of poultry in East Asia, had experienced a sharp 40% fall in poultry products in 2004, due to import restrictions in foreign markets on its uncooked poultry exports. “Together with Vietnam, strong control measures have resulted in no new outbreaks of the virus for the past six month,” he said. “Exports have managed to switch from uncooked to cooked poultry exports, which are not affected by trade restrictions, as a result of which exports began rebounding last year. Domestic consumption has also been reviving due to increasing consumer confidence in the safety of cooked products.” But he says there’s evidence outbreaks have had a severe impact on the poor in some countries. In Vietnam, for example, he says the poorest households rely more than three times as much on poultry income than the richest households. In Vietnam the bulk of poultry production is still by backyard producers. Brahmbatt says one strategy that has been discussed has been to simply ban backyard poultry production. But analysts suggest this would disproportionately reduce the incomes of the poor. Brahmbatt says in dealing with avian flu, there needs to be careful evaluation of results from various strategies that are being currently implemented to see if they’re meeting expectations. He cites control strategies such as culling and vaccination of birds. “A linked question is that of the appropriate levels of compensation needed to make culling successful,” he says. “Too little and farmers have an economic disincentive to comply with culling: too much and they may not have an incentive to provide adequate biosecurity for their flocks.” Brahmbatt says there’s also a need to undertake broader long term measures to strengthen the early detection, surveillance, institutional, regulatory and technical capacity of animal as well as human health. “Even if we manage to dodge the bullet with avian flu, there are a lot of other animal diseases which are crossing the boundary and infecting human. The technical name for them is zoonoses. And there’s a whole stream of these zoonoses which are coming into being, so this is going to be something which is going to be with us for a while so we need institutions and methods for dealing with this problem. “And lastly I’d say there’s a lot of scientific work which needs to be tackled – better medications, better vaccines, better anti-virals – how to produce them more quickly and how to produce them more cheaply. “Once a pandemic starts it’s only then that we get a handle on what the virus precisely is and it’s only then that we can formulate the right vaccine. Traditionally it might take six to nine months to formulate the right vaccine – by which time a lot of people might have died – so that all takes a lot of effort.” |
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