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Ebola's timely lesson

30 October 2014

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Professor Warwick McKibbin is an ANU Public Policy Fellow at Crawford School. Professor McKibbin was a member of the Board of the Reserve Bank of Australia from 2001- 2011. He teaches Modelling the World Economy: techniques and policy implications (IDEC8127).

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The Ebola outbreak highlights the need to better coordinate global health policy, writes Warwick McKibbin.

The spreading of Ebola from Africa to Europe and the United States should never have occurred.

Although Ebola has been known in Africa since 1976, the various outbreaks have been controlled at relatively low economic costs for the global community although high costs locally. Ebola is a deadly disease with a high mortality rate but with appropriate intervention the high death rate combined with the nature of transmission through bodily fluids makes it relatively easy to control within proper functioning health systems. This is in stark contract with other historical pandemics particularly influenza strains such as H5N1.

The scale of the outbreak of Ebola in Guinea, Sierra Leone and Liberia can largely be attributed to the lack of capacity in the public health system to deal with the disease. By 8 August 2014 the World Health Organisation (WHO) declared the epidemic to be a public health emergency. It is now spreading to other countries although it is unlikely to be a major crisis outside of Africa because response systems are in place in many countries.

What is so problematic with the Ebola epidemic is that a small amount of intervention initially by the world community at low cost could have avoided what is likely to be a very high cost investment in subsequently protecting the global community.

There have been a number of studies of the economic cost of pandemics and they all show that the costs of taking action after a disease has become a pandemic and waiting for national intervention to occur at the border is orders of magnitude larger than the cost of taking action at the source of the disease to prevent the pandemic from emerging.

In studies of the 2002 SARS outbreak for the US Institute of Medicine, Jong-Wha Lee and I found that SARS cost the world economy around $US 40billion (the official WHO estimate). In 2006 Alexandra Sidorenko and I undertook a major study on the ‘Global Macroeconomic Consequences of an influenza Pandemic’ for ANU and the Lowy Institute mapping the epidemiological experience of the Influenza pandemics of the 1968-69 Hong Kong flu, the 1957 Asian Flu and the 1918/19 Spanish Flu, onto the current global economy. We found in today’s integrated world that similar pandemics may kill between 1.4 million and 144 million people. The economic cost could run between $US340 billion for the Hong Kong Flu to $US4.4 trillion for the worst scenario of the Spanish Flu. Of course these estimates are highly uncertain, but the costs are orders of magnitude greater than the funding from the international community that currently goes into prevention of pandemics.

Ebola is unlikely to be in the same league as these historical influenza pandemics because of its particular epidemiologically characteristics but there are at least two important lessons to be learnt from the most recent Ebola outbreak.

The first is that there is a wide range of zoonotic diseases that could potentially become human pandemics. Most of these events will emerge in overcrowded, poor communities where animals and humans mix extensively and public health systems are fragile. To minimise the risk of a major pandemic in future years, serious long-term investments need to be made to significantly improve the health care systems in the poorest countries on the planet.

The second lesson is that extensive investment also needs to be made into enabling early intervention in countries where outbreaks do occur. To have response plans tuned to protecting borders is politically attractive but far more costly that focusing on the source of the disease. A failure to coordinate global health policy responses will be far more socially and economically devastating than the lack of coordination of macroeconomic policies that currently damage the global economy.

There is a long history of experience and large amount of evidence of what needs to be done to deal with pandemics. There is extensive evidence that the benefits of intervention before a disease outbreak becomes a pandemic are far greater than the costs of early intervention. The failure of response to the Ebola outbreak of 2014 is a timely reminder of what needs to be done in the global community to better coordinate global health policy.

Are you interested in the ideas in this opinion piece? Warick McKibbin teaches Modelling the World Economy: techniques and policy implications (IDEC8127).

This piece was also published in the Australian Financial Review:

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