The Coming Pandemic

Bird flu cases have been reported in Greece, Italy, Turkey, Nigeria, Asia and China. Human deaths in these areas are minimal No deaths have occured in Nigeria that can be connected to the infected birds. Since 2003, a total of 88 people have died of a flu seen as a human form of the H5N1 bird flu virus.

The WHO and others (see Oprah with Frey's blog entry here for Jan 27th 2006) still advance the view that: (a) a pandemic is inevitable, it is just a matter of time; (b) that once the mutation from animal to human form occurs in a major population centre, all bets are off; (c) between 50 and 350m will be infected and between 50 and 150 million will die; and (d) the world's economy will collapse. They are also clear that we dont have an antidote - Tamiflu (the drug every country is stockpiling) has already been seen to be ineffective against N5N1, but may slow the speed of the spread of the disease.

So what to do. The key issue is whether the virulent strain of H5N1 avian flu that has now killed dozens of people from China to Turkey mutates so that it can be readily transmitted between humans, leading to a global pandemic. The problem is that no one can know whether this will happen. What is certain is that there is a sufficiently grave risk that the H5N1 virus might mutate in this way that we need to confront it, and the potential consequences, with great seriousness. Flu viruses mutate readily, morphing into new strains as they spread and reproduce through processes that scientists call genetic drift and shift.

In the New England Journal of Medicine, Michael Osterholm (the man who was on Oprah) reports that there have been ten influenza pandemics over the past three centuries and, although some were more severe than others, the lethal potential is clear. The 1918 “Spanish flu” killed between 50 million and 100 million people. Moreover, Dr Osterholm points out that, although the 1918 outbreak is often seen as an anomaly in its severity, the pandemic of 1830 to 1832 was, in fact, equally virulent.

Against this background, sensible policymakers will examine worst-case scenarios. So, if the unthinkable happens, what might be the economic consequences? Although Sars proved far less dangerous to health than was feared three years ago, its economic effects are instructive, and ominous. Sars infected only about 8,000 people worldwide, killing 775. Yet Hong Kong was tipped into recession. and in Toronto, where just 44 died, the economy also shrank.

The US Congressional Budget Office (CBO) has attempted to construct some meaningful scenarios. Based on a severe flu pandemic on the scale of 1918, it estimated the economic effects of an outbreak in which 90 million Americans, just under a third of the US population, became sick and two million of those died, a fatality rate just under 2.5 per cent.

On this basis, the CBO projects that a flu pandemic would cut US GDP by 4.7 per cent — a blow slightly harder than that inflicted by typical US recessions since the Second World War. In fact, the impact would be exceeded only by the US recession of the early 1980s, which cut American GDP by more than 7 per cent. More comfortingly, the CBO also projects that a milder flu pandemic would probably not trigger recession and even could be hard to trace in economic data.

What can I do - wash my hands frequently! Clean my teeth and take care of personl hygene. That's about it. Will I worry - no. Should you - no. There's nothing much one can do. Will it turn out as bad as Dr Osterholm thinks - definately not (he's not been right on any of his predictions to date).

[With thanks to Daily Telegraph, BBC, Washington Post and The Times]