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It is in the breaking news sidebar!
Posted on 04/13/2003 1:58:51 PM PDT by Lessismore
A MONTH after the world was first alerted to a baffling viral outbreak, key East Asian economies are in shock as travel, retail and other industries are being sapped dry by the elusive disease.
Regional growth forecasts are being slashed as the climate of fear spawned by the Severe Acute Respiratory Syndrome grounds planes, shuts schools and casts a pall over boardrooms and factory floors.
The World Health Organisation issued a global alert on March 12 after it was alarmed by the appearance of an "atypical pneumonia" in Vietnam, Hong Kong and southern China's booming Guangdong Province.
It later turned out that SARS, as it was eventually christened, had cropped up in Guangdong as early as November but the Chinese authorities had failed to inform the rest of the world.
The economic impact of the WHO alert and subsequent revelations by governments was immediate.
SARS has now killed 126 people worldwide and infected more than 3000.
Scientists are zeroing in on a member of the "coronavirus" family but a cure for SARS is still out of sight and in the meantime the disease is potentially costing billions of dollars in lost revenue, medical and welfare costs, deferred investments and reduced productivity.
And if it lasts longer, the impact of SARS could go beyond demand driven sectors to the global supply chain since the disease is centred on greater China, the world's fastest growing manufacturing centre, economists say.
Singapore and Hong Kong, both densely populated island economies, have suffered the sharpest dislocation due to the high proportion of their people affected by SARS and their critical dependence on the rest of the world.
Thailand and Malaysia, which are dependent on tourism, are also expected to suffer more than countries like Indonesia and the Philippines, says Daniel Lian, an economist at Morgan Stanley in Singapore.
"SARS is exerting an uneven negative impact on South-East Asia," he said on Friday.
Pradumna Rana, head of the regional economic monitoring unit at the Asian Development Bank in Manila, says it is difficult to put a price tag on the economic cost of SARS so far.
"But beyond economics there has been a tremendous human cost and medical cost," Mr Rana says.
"We don't know how long it will last, how far it will spread . . . but I suppose on a qualitative basis, there will be a negative demand shock in the form of reduced consumption and expenditure on service sectors like tourism, travel, entertainment and retail," he said.
Steve Brice, chief South-East Asia economist at Standard Chartered Bank in Singapore, says "we're seeing a significant downward revision of growth forecasts for countries like Singapore and Hong Kong".
Singapore Prime Minister Goh Chok Tong has already warned that the city-state's gross domestic product growth this year could be slashed by up to one percentage point.
Mr Brice says one of the major impacts is going to be on productivity, because people are much more conscious of how they work with other people, especially if someone coughs or sneezes.
In a human version of the computer back-up measures against the dreaded "Y2K" bug before January 1, 2000, companies are splitting up key teams and insulating them to minimise the chances of unchecked SARS contamination.
"People interact better face to face. So when you split them up for something like this, it is going to affect productivity in one shape or form," Mr Brice said.
International Monetary Fund chief economist Kenneth Rogoff says the effects of SARS could lower Asian growth by 0.25 percentage points if it lasts just three months.
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