The World Health Organization (WHO) will convene in an emergency committee in Geneva, Switzerland this Monday, January 31. The topic of this emergency meeting will be the mosquito-borne Zika virus, which is spreading “explosively” across Latin America. Margaret Chan, WHO Director-General, addressed the executive board stating that “The level of alarm is extremely high…Questions abound. We need to get some answers quickly.”
The Zika virus itself is not a new phenomenon and to the vast majority of the population is relatively harmless. The virus was first discovered in Uganda in 1947, but is suspected to have been introduced to Brazil in 2014. The virus is believed to spread exclusively through mosquito bites, very similar to dengue fever and chikungunya. As previously mentioned, the Zika virus is not especially harmful, with only about 20% of those infected displaying symptoms. For those that become ill the virus is often mild, consisting of flu like symptoms, which last approximately a week. The major concern with the virus is its effects on the unborn children of pregnant women. The virus is thought to be linked to the growing number of birth defects in the region, specifically Microcephalus, in which the infants head and brain are significantly smaller than normal.
With Zika infection being a relatively low risk to a vast majority of the population, what, if any, will be the economic impact of the epidemic. First, one must consider the current state of the Latin American economy. Latin America is primarily an export-dependent economy, which has been harmed by the steep drop in demand from China. Concurrently, with this drop in demand, Latin American currencies have been battered by the rising values of the United States dollar and euro. While declining currencies have hurt many industries, it has made it cheaper for foreign tourists to travel. Many nations are banking on tourism to pull them out from their economic woes.
Brazil is the nation with the most cases of Zika and the country that stands to lose the most in the short term. The largest South American economy is depending on the influx of foreign tourists, visiting for major events such as Carnival and the 2016 summer Olympics, to boost the economy. However, with the current Zika situation, many tourists, not just women who are pregnant or may become pregnant, are shying away from trips to Brazil. Major global airlines, including Delta and American Airlines, have both began to make accommodations for pregnant women who no longer wish to travel to one of the over twenty five Zika effected countries.
From a macro perspective, the Zika outbreak could potentially have long term repercussions. Many Latin American governments are advising their constituents to postpone pregnancies anywhere from six months up to, in the case of El Salvador, two years. If millions of Latin Americans heed this warning for a significant period of time, there will be potential for serious strain and major issues in the various education and health care systems across the region.
In the present time, all of these concerns are mere conjectures. We must wait and see how the virus develops and potentially spreads, and what actions domestic governments and international organizations, such as the WHO, take to curb its effects. The only thing that is certain is that we will know more about the Zika virus and both its health and economic effects in the future.