Sherillyn Raga and Dirk Willem te Velde, February 2020
Growth and economic transformation pathways are subject to a range of shocks that will affect economies in varying ways. In the past we have examined the impact of shocks such as financial crises, the eurozone crisis, or a slowdown in China. Health emergencies can also have major economic impacts on low and middle income countries and we examine these in this paper.
On 28th January 2020, the WHO declared a public health emergency of international concern around Novel Corona Virus 2019, following previous emergencies around H1N1 (2009), Ebola in West Africa (2014), Polio (2014), Zika (2016) and Ebola in DRC (2019). At this stage it is difficult to understand the precise impact of the latest virus, but it has already claimed the lives of more than 360 people (as of 3 February 2020) and has disrupted travel.
This paper assesses the possible vulnerabilities and impacts in low and middle income countries to the effects of this outbreak. Much of the outbreak is currently centred around China with the affected areas effectively being under lock-down. This will affect the Chinese economy and beyond. Many countries in South East Asia and Africa are increasingly dependent on economic links with China for their growth and economic transformation.
Photo: Economic impact due to air travel restrictions as a result of health pandemic. Arne Hoel/The World Bank. Licence: (CC BY-NC-ND 2.0)