The Economics of Ebola
“We are exhausted, we are angry, we are desperate,” said Sophie Delaunay, the American director of Médecins Sans Frontières (MSF). These words, said two weeks ago, parallel MSF’s June 23rd declaration, saying that they were at the limits of what they could handle. The fight against Ebola in the three months between these two statements has been painfully delayed and remarkably underfunded. As Ebola slips from the headlines, the disease continues to spread exponentially and its economic effects are becoming increasingly profound in three of the worstly afflicted countries: Liberia, Sierra Leone, and Guinea.
These countries’ health care systems are crumbling under the weight of this crisis – even before the epidemic began, Liberia had less than 200 doctors serving their entire population of 4 million. Now, it has only 50 doctors working in the domestic health system. Borders have been closed, markets shut down, and certain areas entirely quarantined, bringing the economy to a grinding halt. A statement released on September 17th by the World Bank Group stated that “[Ebola’s] economic impact could grow eight-fold, dealing a potentially catastrophic blow to the already fragile states.” In fact, the World Bank’s President Jim Yong Kim predicted that “GDP losses to Liberia, Sierra Leone and Guinea from this crisis will be a combined $360 million.” This is a huge hit to Liberia’s economy, one that is still recovering from a 90% loss of GDP sustained in their second civil war, which ended in 2003.
It is widely theorized that the disease itself isn’t the leading cause of an impending economic disaster – the World Bank Group blames the hysteria surrounding the epidemic, calling it an “emergency within the emergency.” Trade has slowed over the closed borders and the tourism industry has gone into free-fall. Africa’s economic powerhouse, Nigeria, has seen a boom in online shopping, especially sanitation products, due to people being afraid to leave their homes. Labor force participation is on a sharp decline, resulting in further closures of work places, transportation, seaports and airports. While inflation and food prices were initially contained in the affected nations, they “are now rising in response to shortages, panic buying, and speculation.” According to ACDI/VOCA, an international development group, “roughly half the populations of Liberia and Sierra Leone work on cocoa and peanut plantations, rice and cassava farms.” These trade-reliant, highly specialized, under-developed economies – which are populated by people living just barely at the subsistence level – have set the perfect stage for Ebola to wreak havoc.
The World Bank Group is mobilizing a $230 million financing package, the United States is deploying 3,000 troops and spending more than $750 million, and the EU is giving $15.5 million in specified aid as well as over $125 million in general aid. There is a medical emergency sweeping across West Africa; there is no debate about that. But there is a greater economic ripple effect taking place that could plague these countries for decades to come.
- Alaina Haworth