Swine flu's global threat

Just when the international economic climate was starting to show slight signs of recovery and when global business confidence was beginning to edge upwards, the world is now faced with a possible swine flu pandemic. Needless to say, if the World Health Organisation does declare a pandemic, it is likely that there will be negative consequences for the world economy.

Last week world equity markets - mainly airline, travel and tourism stocks - fell after an outbreak of swine flu in Mexico sparked fears of a global pandemic that could dent hopes of an economic recovery. The leisure and travel industry has already been badly affected by the international recession and this latest influenza outbreak is certainly something it can do without.

According to a research document by the financial giant ING, a pandemic would hurt second quarter economic performance globally. "Markets should accept this is an additional risk factor in the immediate term that could undermine the nascent recovery in output," it said.

One analyst, Tsuyoshi Segawa of Shinko Securities, remarked: "We had finally begun to see a bottom for the global economy and that has been ruined by pigs."

Of course, even if a pandemic does not materialise, the fear factor alone is enough to cause considerable damage to the global economy. In 2003, for example, the Sars outbreak, which never developed into a pandemic, cost the world an estimated $50 billion. Governments therefore have a delicate task of planning for a pandemic while at the same time avoiding panic and overreaction among the people.

While the world had been preparing for a possible bird flu pandemic, the threat today comes from an unexpected source, a swine H1N1 virus, which has combined with the H5N1 bird flu virus and the human influenza virus - which is why it seems to be so easily transmitted from human to human. However, the preparatory work done over the last five years for a possible bird flu pandemic - which was spurred by the Sars outbreak - will surely prove useful and the world is probably as best prepared as it will ever be for a possible pandemic.

Large stocks of antiviral drugs, Tamiflu and Relenza, are available, and these have so far proved effective in fighting swine flu. Companies are now working around the clock to try and produce a vaccine against this new flu strain, which experts believe could take about four to six months to produce. Furthermore, the fact that summer is approaching - at least in our part of the world - is a plus and any pandemic could be a relatively mild one.

In an effort to contain the H1N1 swine flu virus in Mexico, the country's government has now ordered a shutdown of all non-essential government services and businesses until Tuesday. Mexico yesterday cut its suspected death toll from the flu to 101 from as many as 176. So far, the only confirmed death from the flu outside of Mexico was a 23-month old Mexican child in Houston. It is still not clear why only Mexicans have died so far, but experts suggest that local hygiene conditions could have something to do with it.

The WHO has now raised the global pandemic threat level to five - one short of declaring a pandemic - with at least 13 countries affected. It has urged countries not to close their borders or restrict travel, saying that containment is no longer feasible. The EU also has not recommended a travel ban to Mexico, saying this should be left up to the individual member states.

In an obvious attempt to protect the pork industry, the WHO has decided to change the name of swine flu to influenza A (HINI). This is a sensible decision, and experts have pointed out that pigs have not been affected by this new virus so they cannot pass on this type of flu to humans, hence there is no danger of catching the disease from properly cooked pork.

The decision by a number of countries to impose a ban on the import of Mexican pork is therefore not justified on any scientific grounds and can only be described as a sign of panic. The same can be said of Egypt's decision to order the slaughter of all the country's 300,000 pigs, which makes no sense at all.

Despite some signs of panic, on the whole, the international community seems to be moving in the right direction in confronting this flu outbreak. In the US, for example, President Barack Obama has asked Congress for an extra $1.5 billion to fight the disease. Obviously, the situation is still evolving and there are many unanswered questions about this virus.

The important thing is that governments carry out information campaigns about the disease and continue planning for a pandemic while at the same time avoiding panic.