Economic ruin if virus mutates

SINGAPORE: The economic damage caused by the bird flu outbreak in Asia is so far largely confined to rural communities but that could change rapidly if the virus mutates into a form that can spread directly among humans, analysts said yesterday. 

Ten countries have now been confirmed hit by the virus, which has killed at least eight people and led to the culling or deaths of millions of chickens in a region still recovering economically from last year's SARS epidemic. 

Health officials fear that bird flu has the potential to be more devastating than Severe Acute Respiratory Syndrome, which killed around 800 people and infected some 8,000 others worldwide in the first half of last year. 

SARS, spread by human contact, was concentrated in key cities like Hong Kong, Taipei, Singapore and Beijing, as well as densely populated Guangdong province in southern China, devastating tourism and related industries. 

Bird flu is ravaging farming villages across a wider swath of territory but is so far suspected of being spread only by infected poultry. 

Even highly urbanised Singapore is taking no chances. The city-state, which imports most of its food, has warned the public to stay away from five chicken farms and two quail farms in the suburbs as a precaution. 

Paul Coughlin, credit watchdog agency Standard and Poor's managing director for corporate and government ratings in the Asia-Pacific region, said that in itself, “a problem of the chicken industry won't herald a recession.” 

“Unless bird flu develops that same characteristic of human to human contagion, then we wouldn't expect bird flu to have the same impact as SARS,” he told journalists in Singapore. 

South Korea, Vietnam, Thailand, Indonesia, Taiwan, Japan, Cambodia, Pakistan and Laos have confirmed outbreaks of bird flu, while China is investigating reports that the virus had crept into its territory. 

Singapore's DBS Bank said that in the short term, countries with large numbers of people employed in the farm sector and highly dependent on tourism are likely to suffer the most economically, singling out Indonesia, Thailand, and the Philippines. 

If the virus starts mutating across large sections of the population in Asia, there could be an overall slowing of economic growth as business and consumer confidence dips and domestic demand starts to slow, DBS said. 

However, thanks to Asia's experience in dealing with SARS in the first half of last year, it is likely that containment this time around will be quicker. 

In Manila, Philippines Health Secretary Manuel Dayrit said that since most of its poultry imports come from Western countries, the risks of an outbreak “are very minimal,” and “there is no reason to be overly concerned.” 

The government has banned all imports of live birds as well as poultry-related products from other Asian countries. 

Shamshad Akhtar, head of the South-East Asia department of the Manila-based Asian Development Bank, said: “I don't think there's an immediate setback to the flow of (tourist) traffic to this region,” unlike during the SARS crisis. 

Akhtar said it was too early to say whether bird flu would have an impact on the region's growth prospects for this year and beyond. 

Poultry supply and sales in Asia have already been affected. 

In Vietnam, wholesaler Metro Cash and Carry Vietnam's three hypermarkets – two in Ho Chi Minh City, one in Hanoi – had stopped selling chickens before Tet, the Lunar New Year festival, because of the flu scare. 

Martin Rama, economist with the World Bank in Vietnam, said it had not made any forecasts on the possible impact of bird flu on the country's economy but will keep an eye “in case it becomes worse.” 

There has been no sign of an outbreak in Malaysia, which exports nearly a million chickens to Singapore daily and shares a border with Thailand. – AFP  

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