An outbreak of avian influenza amongst humans will happen sooner or later, it is virtually a mathematical certainty.
The H5N1 virus is going through a process of trial and error that will eventually see it able to jump easily between mammals. It is just a matter of time before it develops a shape best suited to bypass the immune systems of animals like pigs and, perhaps shortly after, humans. And that will be the beginning.
This outbreak may or may not be very virulent; it may or may not be lethal. It may kill only chickens or 150 million people. It may be highly localized or it may span the globe.
"This is the risk but it is difficult to say what the epidemic will be," said Dr Jacques Jeugmans, principal health specialist at the Asian Development Bank (ADB). "But we all expect that there will be a pandemic of avian influenza.
"Very few experts think we can stop a pandemic if you have a virus that is transmitted from human to human… even with a very mild pandemic, the impact would still be significant."
The ADB concluded in a 2005 report that avian influenza may present the most serious challenge to the development of the region since the 1997 financial crisis.
Counting the cost
Avian influenza has been the subject of constant warnings and media reports since a 1997 outbreak in Hong Kong introduced the H5N1 strain to the world. To date, this strain has cost more than US$10 billion in research, human life and losses to the poultry industry. More than 200 million birds have been killed.
In China alone, it cost farmers about US$1 billion in 2004 while company sales declined by US$2.5 billion. The direct costs to Cambodia, Thailand and Vietnam topped US$560 million by 2005.
As the virus has yet to mutate into one that can be transmitted from human to human, these figures are arguably just the costs of preventing a pandemic.
Despite significant media coverage on the potential horrors of the virus, there are concerns that people and corporations are becoming inured to the risk. At least in Asia, the public tends tends to shrug off the danger, a tendency that has left Jeugman’s warning of complacency.
Dr Henk Bekedam, chief China representative for the World Health Organization (WHO), agrees. "We need to be responsible in informing the public.
"A lot of the fear is gone."
A study by risk and insurance specialists Marsh found that, while there is widespread awareness among large corporations of what avian influenza is all about, very few know what they would do in the case of a serious outbreak.
"All big corporations are worried about this… but less than half have disaster containment plans," said Paul Wilkins, head of China for insurance and risk consultancy Marsh.
This lack of planning could have serious implications. As the WHO points out, avian influenza could well be overtaken by another virus and "it is very difficult to be prepared for a pandemic".
All is chaos
The one thing people should be prepared for is panic. A gut response to run for the hills would create economic havoc in China and neighboring countries.
Since the markets tend to panic more and faster than the public – which may actually ignore an outbreak at first – the financial impact could last for several years, regardless of the actual loss of life.
In its deadlier versions, the H5N1 strain of avian influenza kills more than half the people it infects. A mild pandemic could kill 7 million people and cost US$800 billion (2% of global GDP) in economic damage, according to the World Bank. A serious pandemic could kill 350 million and put the economic fallout in the trillions. The more pessimistic scenarios have a quarter of the population of the world getting infected.
The ADB predicts that just the year-long economic shock from an avian influenza pandemic could cost the region US$283 billion.
"When a virus does manage to evade the scientific community’s gatekeepers, it may travel the world in a matter of hours. Fewer than a dozen companies worldwide manufacture flu vaccine… and these companies have had difficulty meeting the demands for vaccine," wrote Dr Robert G. Webster in 2003. Little has changed since then.
Webster, an epidemiologist with St. Jude’s hospital in Tennessee, US, was part of the team that contained a 1997 Hong Kong outbreak in its tracks by killing virtually every live chicken in the city.
A particularly pessimistic assessment drawn up by the US Congressional Budget Office in 2005 suggested that a human-to-human outbreak would affect 90 million Americans and could result in costs to that country of up to 5% of GDP or US$675 billion. The chances of such a drastic hit are less than 0.3% – but, as Bekedam noted, "A threat is a threat… just like a lottery there could be a change that is disastrous."
Another scenario from Oxford Economic Forecasting looks at the potential impact of a relatively mild pandemic that attacks 20% of the population and has a very low fatality rate of 0.5%. (Last year, the fatality rate among the 70 or so people infected was almost 60%.)
The economic think tank concluded that it would create a consumption shock of 3% followed by 18 months of slow commercial activity in Asia. This lack of demand would cost US$99.2 billion. At the same time, there would be a supply shock of US$14.2 billion as employees miss an average of two weeks work each.
A separate study also took into consideration a longer psychological impact that could lead to US$282 billion in costs and a slowdown in global trade of 14%. Even after five years, GDP growth would be down by 3.6%. Economies that rely on trade would be most affected.
The best case scenario would be that a new strain of the virus breaks out among birds in a scarcely populated rural area where a strong monitoring system is in place, giving the authorities time to contain the outbreak and produce a vaccine. (See: Best case scenario: Isolated hit )
What is more likely to happen, however, is that the virus will appear in a highly populated area where vaccinating birds is common practice. Wet markets or backyard chicken farms are ideal breeding grounds.
"Most pandemics originate in China, where birds, pigs and people live in close proximity," Webster observed.
The majority of the outbreaks to date have surfaced in China, Thailand or Vietnam. In most cases, the humans who become infected have close contact with poultry like chickens and turkeys, and particularly with the birds’ fecal matter.
The first symptoms are similar to those of a common cold: a cough, a sore throat, a fever. There could also be some muscle aches and conjunctivitis. Without an effective vaccine, these symptoms can develop into breathing problems and potentially fatal pneumonia.
The fallout of a virulent outbreak in a city like Hong Kong, Guangzhou, Shenzhen, Manila or Bangkok would be almost immediate. Wet markets would close and quarantines kick in as action is taken to stop public gatherings, impose health checks at transit points and introduce travel restrictions.
Companies in the transport sector tend to be the ones affected first in these situations, said Tai Hui, an economist at Standard Chartered Bank. Travel restrictions cause problems at airports, where people who ignore warnings and try to fly regardless, creating delays and backlogs.
The retail sector would also suffer. Restaurants close as owners choose to shut down in the face of drastically decreased customer traffic; shoppers stop going to malls; along the streets commercial activity slows to a crawl.
Services are next. Companies are hit by absenteeism, as was the case during the Severe Acute Respiratory Syndrome (SARS) outbreak in 2003 which saw business partners refuse to take meetings.
Despite emergency measures, the virus would indubitably spread because it is impossible to stop all trade and contact between one region and the next.
"The economies that are most open would be most affected," said Jeugmans. "The people who will be most affected will be the poor."
As the news of the virus spreads, big investors who control funds from far away would likely pull out of the entire Asia Pacific region. Money would flow out of avian influenza hot zones like Thailand and Vietnam first, with the rest of the region following in short order.
"If something happens in Asia, they will pull out as quickly as they can," Jeugmans said. "Investors do not care about the region. They care about the dollars."
Even by the most optimistic estimates, the drop in commercial activity would last for three years or more. The damage would make the SARS outbreak feel like a slow day market day.
Hui noted that during SARS the Hang Seng Index dropped 13%, from 9,200 to 8,400, but rebounded swiftly.
SARS killed 800 people in 26 countries – less than 10% of the 8,000 people infected – and cost US$18 billion or 0.6% of East Asian GDP.
This is a mere fraction of the estimated costs of an influenza pandemic that, even in the most positive scenarios, could kill millions and cost the region upwards of a quarter of a trillion dollars.
Public health officials continue to push for more transparency and ongoing education, well aware that this may be the only way to mitigate the risks. They no longer debate whether or not a pandemic will strike; the issue is how responsibly people and business will react.
"It’s a race against the virus and we have been lucky until now. Let’s hope it will continue," Jeugmans said.
"A pandemic will come, the question is whether it will be serious."