Environmental Engineering Reference
In-Depth Information
retail sale and tourism) within that sector. this may explain why Hong Kong, with
its losses accounting for 2.9 percent of gross domestic product (GDP), suffered the
worst given the size of its economy (Asian Development Bank [ADB] 2003). In early
april 2003, Morgan Stanley chief economist Stephan roach estimated the global
economic cost of SarS at circa US$30 billion (wHo 2003c). the
Far Eastern
Economic Review
later estimated initial SarS-related damage to regional GDP
growth at US$10.6 billion to US$15 billion (Saywell, Fowler, and crispin
2003).
If SarS had continued to spread, quarantines could have affected manufacturing,
which accounted for approximately 30 percent of asia's GDP (minus Japan), by
closing factories and slowing trade (13). If the costs of premature deaths of income
earners, lost workdays of sick employees, and health care were factored into the
equation, the eventual bill for the region could total almost US$50 billion.
China sustained significant losses in its service sector, which makes up
33.6 percent of the country's GDP (china, national bureau of Statistics 2002).
SarS caused a decline in sectoral productivity of 6.8 percent during the second
quarter ('GDP Growth revised Up for 1st Half of 2003' 2004). according to a
government economist, the loss borne by the sector was 23.5 billion yuan, including
20 billion yuan in tourism and 3.5 billion yuan in retail sales (Hu angang and linlin
2004). based on the economic indicators of china's economy affected by SarS, the
asian Development bank (2003) put the GDP losses in china at US$6.1 billion, or
0.5 percent of total GDP. If calculated by total final expenditure, the total loss was
US$17.9 billion, or 1.3 percent of china's GDP.
while the dampening of tourism and consumer confidence is the most important
channel through which SarS wreaked havoc, other developments during the
outbreak highlighted the fragility of china's economy. In some regions, people
rushed to purchase daily necessities, and this panic buying threatened to trigger a
'bank run' that could have further disrupted China's ailing financial industry, where
state-run banks were generally in poor financial shape and were frequently confronted
with rumour-driven mass withdrawals. Moreover, china's export sector—the engine
of its economic growth—was threatened by calls for other countries to quarantine
china, and thereby suspend all travel links with the country until it implemented a
transparent public health campaign. During the crisis, 110 out of the 164 countries
with which china had diplomatic relations placed at least some restrictions on travel
to China (Embassy of Switzerland 2003). If SARS had persisted and disrupted the
production and supply line, the increased risk profile associated with doing business
in china would have led to a reduction in foreign investment and exports, which
eventually would have hurt china's manufacturing sector (which accounts for a
hefty 36.8 percent of the country's GDP) (Fei Feng 2006). the end result would be
a rapid decline in the economic growth rate, on which the regime's legitimacy hinges
(see below).
the emergence of HIv/aIDS was also initially accompanied by high levels
of fear, but given that transmissibility is more difficult, it did not significantly
compromise international trade. at this point a distinction between two types of
epidemics must be made: outbreak events, such as SarS and the plague of Surat in
