Ebolanomics

Screen Shot 2014-10-15 at 12.23.13 PM

Kim Yi Dionne and Laura Seay discuss how Ebola panic – coupled with ignorance of geography – is doing economic damage to African countries thousands of miles away from the outbreak:

Estimates of the economic damage to be caused by Ebola are as high as $33 billion. Whatever the ultimate cost, everyone agrees that Guinea, Sierra Leone, and Liberia’s economies will be deeply and negatively impacted. Much of that damage is likely unavoidable because people in heavily affected countries engage in “aversion behavior” — or taking actions driven by fear alone (e.g., employees not going to work for fear of being exposed to Ebola).

But this Ebola outbreak is wreaking havoc on African economies beyond the three most heavily affected by Ebola, and that damage is completely avoidable.

The East and Southern African safari industry provides a good example. Bookings for safaris there — including for the famed Great Migration in Kenya and Tanzania — have plummeted due to the Ebola outbreak. In a survey of 500 safari tour operators, SafariBookings.com found a majority of respondents had a decrease in bookings and an increase in cancellations. These actions are based in fear, not reality. We are faced with risk every day, and would be better suited to understand our relative risks if we appreciated where in the world some places are.

Ylan Q. Mui zooms in on Liberia, where the epidemic threatens to turn back the clock on the economic progress the country has made in recent years:

With critical public works projects in limbo and businesses struggling, the virus is threatening Liberia’s chance to escape generations of poverty and join Africa’s rising prosperity. “Liberia was moving,” said Estrada Bernard, chairman of the International Bank in Liberia and the Liberian president’s brother-in-law. “The whole thing hinges upon how well we can get this virus under control.” The best-case scenario compiled by the World Bank predicts Liberia’s economic growth will still plunge by more than half this year. Rubber, one of the nation’s biggest exports, is expected to fall 20 percent this year. Gold and diamond mining have also dropped off. Beer production plunged 30 percent during the first quarter.

And that’s not to mention the human toll of the virus in a country that currently has 2.3 million fewer boxes of sterile examination gloves than it needs. Worse still, Abby Haglage reports, thousands of children have been orphaned in the epidemic:

Of the more than 8,000 people infected with Ebola in West Africa, an estimated 20 percent of them are under the age of 18. Without solid health or proper nutrition, the chances of recovery in this demographic are even lower than for the epidemic at large. “Three out of four of children infected with Ebola in West Africa are dying—that’s a 75 percent mortality rate,” says [Save The Children president and CEO Carolyn] Miles. “These kids are already malnourished, they’re not in the best of health. They’re just not able to survive this.”

Those that do survive, or are lucky enough to have escaped infection, meet a shadowy future. According to data from UNICEF, upwards of 3,700 children have lost one or both parents to Ebola in Sierra Leone, Guinea, and Liberia thus far. Miles, who met with four different groups of orphans in Liberia on her visit, suspects the number is much higher. “I think there are thousands we don’t even know about,” she says.