The Ebola Virus Disease, and the pressing need for rapid containment over the next 3 to 9 months, presents the global community with a formidable challenge. More than 7,000 cases have already been confirmed in Guinea, Liberia and Sierra Leone (the three core countries of the epidemic), and more than 3,300 people have already died. The epidemic is strengthening, but so too is the international response.
Ebola threatens not only lives, but livelihoods. The main driver of economic impacts is not the loss of labor to sickness and death, or even the major diversion of resources into health care, but rather the much broader spillover effects from peoples’ fear of contagion.
Isolation of infected persons is critical to controlling transmission, and wider restrictions including land border closings and partial community quarantines can interrupt economic activity on a temporary basis. But in an atmosphere of uncertainty about personal and business risks, activity can decline across the entire economy. Self-protective aversion behavior shuts down businesses, disrupts transportation and agriculture, and sidelines employment-creating investment plans – all of which drives down peoples’ livelihoods by undermining a country’s production and trade.
Liberia, where the outbreak is worst, has been rebuilding its economy since emerging from a long civil war in 2003. While economic growth has been strong in recent years, the country remains one of the poorest in Africa, with a per capita income of only $440 dollars and nearly 60 percent of the population below the poverty line. Liberia remains both institutionally weak and aid dependent, so a swift international policy reaction to this epidemic is crucial.
Food prices have recently begun to rise sharply in urban areas in Liberia, reflecting slowdowns in container shipping and uncertainty about future supplies. Regional trade has been reduced by land border closings. Internal transport has slowed down, reflecting official and unofficial restrictions on movement and higher fuel costs. The expatriate economy – with its incomes and expertise – has thinned out. Some urban enterprises are shedding workers as many government contracts are being cut back, or put on hold.
The World Bank’s latest estimate of economic losses for 2014, in the three core countries, is $359 million. Under a rapid containment scenario, losses in 2015 are projected to be roughly $100 million, with the bulk of these in Liberia where per-capita incomes are not expected to begin rising again until 2016. Left unchecked, however, this epidemic could grow exponentially and drive up both human and financial costs by as much as 8 to 10 fold. So the international community needs to act quickly and decisively, along a number of fronts.
Simply put, an Ebola epidemic that is not effectively contained and mitigated could reverse years of development progress for the affected countries, with harsh negative impacts on some of the world’s most vulnerable communities. Failure to contain would also increase the risk of outbreaks in neighboring countries, driving economic losses into the tens of billions of dollars.
This epidemic calls for concerted international response including health workers, new treatment facilities, and medical supplies to the health sectors of the core countries, food security assistance to stressed and especially isolated and quarantined areas, and preparedness training for health systems in neighboring countries.
The United States, along with our international partners, is stepping up to this challenge. With Liberian clinics overwhelmed with new patients, we are providing 2,000 new beds, 130,000 sets of personal protective equipment, and 50,000 hygiene kits, along with plans to rapidly construct new health clinics. To prevent further infections within Liberia, the USG and its partners will also provide 400,000 protection kits to reduce transmission in community settings.
To help offset declining government revenues and skyrocketing health costs, we are providing base salary support for civil servants in Liberia’s Ministry of Health, and working closely with the World Food Program to provide emergency food supplies to 1.3 million people across the region, including Ebola patients and communities under quarantine.
We’re also working closely with President Ellen Johnson Sirleaf to intensify our response across a broad range of areas, including supporting the country’s health system so that the focus on Ebola does not come at the expense of providing care to pregnant mothers or newborn infants.
Additionally, we’re working with the Government of Liberia and partners to mitigate the economic impacts of the crisis outside of the health system. This includes the crucial area of public messaging about the safe resumption of normal economic activities.
We’ve seen outstanding teamwork across our Agency, the U.S. Government, and our Disaster Assistance Response Team on the ground in Liberia, Guinea, and Sierra Leone—but we cannot win this fight alone.
We need qualified health care workers—nurses, doctors, and physician assistants—who could be a part of this historic response. We’re encouraging them to register at www.usaid.gov/ebola, and we’ll put them in touch with a network of organizations that are standing by to train volunteers. We’re also identifying care and evacuation procedures to support these professionals in their heroic humanitarian work.
With the same creativity and rigorous efficiency that we have applied to previous disasters, we can—and will—stop this epidemic. By working together with our partners from government, business, civil society, and the military, we can lay the groundwork for a brighter future in vulnerable communities grappling with Ebola’s devastation.
ABOUT THE AUTHOR
Stephen O’Connell is USAID’s Chief Economist. He guides the Agency on economics-based decision making and provides expert advice to Agency leadership and staff in the field of economic growth.