The World Bank released a statement Wednesday warning that the economic impact of the Ebola outbreak in West Africa was "already serious" and could be "catastrophic" if the international community does not take serious action soon.
This Ebola outbreak is unprecendented in scope, and worsening with alarming speed. There have been 2,453 deaths counted so far, and 4,963 confirmed, probable, and suspected cases — almost half of which have been diagnosed in the past 21 days.
"The primary cost of this tragic outbreak is in human lives and suffering," said World Bank Group president Jim Yong Kim, but the economic repercussions cannot be ignored. "Today’s report underscores the huge potential costs of the epidemic if we don’t ramp up our efforts to stop it now."
The World Bank analysis includes the following estimates of the economic impacts if the outbreak is quickly contained ("Low Ebola") or if it continues to spin out of control ("High Ebola"):
"Its economic impact could grow eight-fold, dealing a potentially catastrophic blow to the already fragile states," the statement said, referring to Guinea, Sierra Leone, and Liberia, the three nations hardest-hit by Ebola. "If swift national and international responses succeed in containing the epidemic" and the fear swirling around it, however, there is still time to limit those economic effects.
The analysis is not just about future worst-case scenarios. The three countries are already reeling from the impacts of the outbreak.
Food prices and inflation are rising "in response to shortages, panic buying, and speculation," the World Bank notes. "Exchange rate volatility has increased... fueled by uncertainty and some capital flight."
The key factor behind these trends is not mortality or lost productivity, per se, but "aversion behavior," which the World Bank calls "a fear factor resulting from peoples' concerns about contagion." This is what motivates workers to stay home, businesses to shut their doors, and governments to close down airports and seaports. In the SARS epidemic of 2002-2004 and the H1N1 epidemic of 2009, the analysis notes, such "behavioral effects... [were] responsible for as much as 80 – 90 percent of the total economic impact."
While the costs of containment and mitigation may be high — as much as "several billions of dollars," the World Bank says — such strategies "would be cost-effective if they successfully avert the worse scenario."
The World Bank report calls for international mobilization on four fronts:Humanitarian support (e.g., health supplies, emergency treatment units) Fiscal support ("The fiscal gap, just for 2014, is estimated at around $290 million," the World Bank notes.) Screening facilities for international travelers (to facilitate both aid and commerce) Strengthening African health systems
The World Bank has pledged $230 million toward the effort, with $117 million mobilized so far. On Tuesday, the World Health Organization estimated that $1 billion was needed to stop the outbreak.
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