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ADB says avian flu pandemic threatens developing Asia(Kyodo News International (Tokyo) (KRT) Via Thomson Dialog NewsEdge) Apr. 6--MANILA -- The Asian Development Bank on Thursday said the possibility of an avian flu pandemic is a major uncertainty facing developing Asia, warning it could "muddy" the generally positive outlook of the region and throw more Asians into poverty. "Avian flu continues to spread in bird populations, and although it is difficult to quantify what the ultimate economic costs would be of a global pandemic among humans, the short-term costs are likely to be substantial," the bank said in its Asian Development Outlook 2006 report. Poor countries in Asia would face immense challenges in coping with the stresses that would be placed on health and social infrastructure and on public services should an avian flu pandemic break out, according to the report. Avian flu is one of the serious risks that could slow down or even stall regional growth, it said. The report estimates that avian flu would lead to a severe economic shock in the Asia-Pacific region, with economic consequences in the range of $100 billion to $300 billion. "This would essentially halt economic growth for a year and throw the world into an economic recession, the first global recession since 1982," the report said. While the economic impact of avian flu would be severe in all likelihood, the report said the impact would not be long lasting. "Economic activity would likely return to 'normal' within a year and reach pre-pandemic levels in two-three years. Although the aggregate impact of avian flu is likely to be brief, its impact would not be felt uniformly," it said. It said services sectors would be severely affected, as people reduce their "face-to-face" contact. Internationally traded services, such as tourism, management consulting, and international banking, would easily be hard hit. Investment decisions would be delayed and trade would slow, it said. It said economies that have a significant share of services in their economies -- like Hong Kong and Singapore -- would be the most affected -- and the impact greater and longer lasting. Also gravely affected will be those countries that rely heavily on international tourism, such as Cambodia and Thailand, the report said. "The profile of risks remains much as before, but these risks are probably more accentuated," said ADB President Haruhiko Kuroda in a message in the report. He warned, "A disorderly unraveling of global payments imbalances, an antigen shift of the HN51 virus to people, yet higher oil prices, or a surge in trade protectionism would unsettle the outlook." Indeed, the report says global payments imbalances are likely to widen this year, "and maybe beyond." But encouraging signs of a more balanced profile of growth are emerging among the major industrial economies and some narrowing of the savings and investment gap in Asia may be in prospect. "Nevertheless, underlying structural imbalances are unlikely to correct themselves quickly and the possibility remains that a shift in investor preferences -- which are, after all, volatile -- will precipitate a sharp fall in the real value of the U.S. dollar," the report said. As Asia continues to modernize and industrialize, the report also stresses the need for developing nations to find ways to promote cleaner production and technologies as well as greater energy efficiency. "Economic growth has taken a high toll on the environment, to the point where threats to water and other resources could increasingly constrain growth," it said. Finally, the report also stresses the need to provide jobs for its massive population, adding that at least 500 million Asians were either unemployed or underemployed in 2005, out of a total labor force of 1.75 billion. Between 2005 and 2015, the report says another 245 million people will be added to the labor force. "Developing Asia therefore needs to find almost three-quarters of a billion new jobs in the next decade. If it fails to do this, its growth is unlikely to prove durable over the long run as social and other stresses -- including badly overcrowded cities -- increasingly consume resources and constrain opportunities," it said. "Ultimately, these jobs will not be provided if countries retreat into protectionism and turn their backs on trade liberalization, or fail to undertake other complementary reforms that will elicit the necessary supply responses," it said. |