Mapping Asia’s Epidemics

Mapping and predicting emerging epidemics can have profound economic consequences. Photo: ADB
Mapping and predicting emerging epidemics can have profound economic consequences. Photo: ADB

By Ilan Noy, Benno Ferrarini, Donghyun Park

Countries can minimize the economic risk of epidemics by investing in the tools needed to predict disease emergence.

COVID-19 is first and foremost a global public health crisis. But the pandemic is also wreaking havoc on the world economy and financial markets. Businesses are failing, unemployment is surging, and public debt in many economies will increase dramatically.

The world has not seen a global crisis of this scale for many decades, and its impacts will likely define the decade ahead.

The deep, unprecedented global repercussions of COVID-19 will change the public’s perception about the risk posed by emerging infectious diseases, including those that are transmitted from animals to humans. This risk was already known, and examples abound of such outbreaks including avian influenza, the Ebola and Nipah viruses, or Zika.

The risk of infectious disease outbreaks has been on the rise globally. While our understanding of the mechanics underlying the emergence of infectious diseases remains limited, there has been significant progress lately in identifying the geographic areas of highest risk. A 2017 study, published in Nature Communications, computed a emerging infectious diseases risk index and produced a global hotspot map. It identified East and Southeast Asia and the Indian Subcontinent as the major risk areas, besides Africa’s Great Lakes region and the Niger Delta.

In a December 2019 study, we measured the economic risk associated with epidemics. Our approach was premised on the standard observation that an epidemic, like any other disaster, occurs only when a hazard (in this case the pathogen) encounters a society and an economy that are both exposed and vulnerable to it. For example, there will be no contagion where a virus fails to enter in contact with a person (exposure) that is also susceptible to its infection and health impacts (vulnerability).

An epidemic’s economic impacts, more broadly, are thus determined by a combination of the degrees of hazard, exposure, and vulnerability in the society and economy as a whole, as well as by its ability to react and bounce back from the shock, and ultimately to fully recover.

While emerging infectious diseases hazard data had been obtained from the 2017 study, our main challenge was to identify suitable indicators that would proxy for economies’ exposure, vulnerability, and resilience.  We then used principal component analysis to identify a core common factor and derive a standardized index for current exposure, vulnerability, and resilience. Combined with the emerging infectious diseases hazard index, this enabled us to compute and map an index of the economic risk of epidemics.

  COVID-19 should prepare us for the next pandemic.

Our study concluded, when released late last year, that economies can minimize the economic risk of epidemics by investing in prediction of disease emergence. Appropriately-designed early-warning systems can mobilize a response quickly and shorten the period of economic decline. Active minimization of transmission pathways through selective travel restrictions and quarantine on-arrival policies can reduce exposure to the disease in areas not exposed to the initial hazard.

Also, vulnerability to disease outbreaks can be mitigated by improving public health systems and decreasing other root causes of vulnerability, such as poverty. Recovery planning can be expedited by increasing economic resilience to the epidemic shock through measures to prevent mis-information that can lead to panic.

These recommendations preceded the COVID-19 pandemic, and did not envisage spread of such reach and intensity so quickly after publication of our research. Although the recommendations still apply, policymakers are now looking at measures that are specifically designed to meet the challenges presented by COVID-19. These include massive increases in public health spending on acute-care facilities and personal protective equipment, and investments in contact-tracing and location-monitoring technologies.

COVID-19 has driven home the risks posed by epidemics to economies. Our study found these risks are high in the Indian subcontinent, the People’s Republic of China and Southeast Asia, as well as in specific areas of the American and African continents. Resilience plays a key role in reducing the economic risk from epidemics. For example, Saudi Arabia and Russia have lower economic risks because their domestic economies are focused mostly on oil exports, and hardly rely on tourism (a sector that is very vulnerable to epidemic risks given the trip cancellations that epidemics typically generate).

COVID has also shown how important it is to invest in resilience to pandemics. However, we too often prepare to fight the last war, rather than the next one. When embarking on new epidemic risk reduction efforts, we should be careful to also imagine the next epidemic, and not only focus on the weaknesses that this current one has exposed for all to see.

This blog post is based on the paper "Measuring the Economic Risk of Epidemics," Ilan Noy & Nguyen Doan & Benno Ferrarini & Donghyun Park, 2019.CESifo Working Paper Series 8016, CESifo Group Munich.