1. KING SIGISMUND COLLEGE
B-NKT135
CRITICS ON GLOBALIZATION
Dr. Lévai Imre
THE SWINE FLU’s GLOBAL IMPACTS
Ceyhan DENİZ
Budapest,2012
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2. Definition of Swine Flu
H1N1 is the official description of one form of swine flu, so named because it
made the leap from pigs to people.
The World Health Organisation officially confirmed Swine Flu has reached alert level
Phase 5, which means it is rapidly spreading via person -to person contact.
How Did Swine Flu Become World Wide?
Because we are a very mobile society, we have many people traveling from place
to place locally and to very distant locations. During travel, they are also in crowded
public places, whether in airports, on buses or trains, or even at gas stations and
restaurants traveling by car. This gives many opportunities to have person to person
contact or contact with items touched by many people or touched by their respiratory
droplets from coughs or sneezes which contain the viruses. This is what happened
when the epidemic first began in Mexico and the infection spread among the local
residents and to visitors from other places while in Mexico, and some of these visitors
were from around the world.
When people first got infected with the swine flu, they may not have even known
they were sick yet but were still able to spread the virus. As they moved, they
moved the virus with them and the spread began.
Originally it seems to have moved first with people as they left Mexico and entered
or returned to the US states where they may have come from. Soon, the flu
outbreaks were happening all over the world, and could be traced back at the very
first, in most cases, to people who had been vacationing or traveling in Mexico. Once
back in their own countries, or in other countries on their travels, those around them
also got contaminated. While being on the plane, or whatever transportation was used,
they probably coughed and sneezed, which is one of the most common forms of
transfer of viruses directly from person to person.
According to the WHO and various news reports, cases of H1N1 were reported as
recently as January 2012 in the United States, Argentina, Australia, Brazil, Cambodia,
Cameroon, Chile, Costa Rica, Czech Republic, Honduras, India, Iran, Jamaica, Kenya,
Mexico and Vietnam.
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3. Here is a map which shows confirmed cases all over the World.
Here is a table which shows confirmed deaths by Swine Flu all over the World.
Area Confirmed Deaths
Worldwide ( total ) 14,286
European Union and EFTA 2,290
Other European Countries and Central Asia 457
Mediterranean and Middle East 1,450
Africa 116
North America 3,642
Central America and Caribbean 237
South America 3,190
Northeast Asia and South Asia 2,294
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4. Southeast Asia 393
Australia and Pacific 217
General Estimates about Impacts of the Swine Flu
During the pandemic cris, authorities had some foresights about the Swine Flu’s
global impacts. The World Bank has estimated that over the six mounths of pandemic,
World GPD would fall by 3.5 % in 2009. The loss to the US economy was
estimated to be around 5 % of 2009 while the Euro zone and UK would also lose
around 3 % of 2009 GPD.
What are the Macroeconomic Effects Towards Global Economy?
Fall in Private Spending
Due to fear of infections, people were staying away from crowded places like
shopping malls, restaurants, cinema theatres, railway stations etc. Therefore, severely
infected countries experienced a dramatic fall in the retail sales already ruined by
recession.
Take Mexico for instance. Within this period economic activities slowed down
markedly. People choose to stay at home to avoid being infected. The impact into
Mexican GDP for the second quarter of 2009 was detrimental.
Consumers from US, Israel, New Zealand and many other large European economies
had given the same reaction since there were suspected or confirmed cases there. The
combo effect of global recession and swine flu reduced consumers’ optimism. Private
spending was declining.
Falling Share Prices
Travel and tourism industries experienced huge losses due to cancellation and
postponement of trips. Workers were asked to stay away from work and this caused a
reduction in industrial output. Ultimately the global supply chain has been interrupted
temporarily. Waning global demand, decline in consumer confidence has induced
business firms to postpone their investment ventures. So, the financial market was
affected by lower share prices and has increased the risk of deflation.
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5. Shares of airline global reduced. For instance British Airways shared prices fell 8%,
Air France 7%, Cathay Pacific 8%, Continental Airlines 16% etc.. For example, the
stock of Cathay Pacific decreased 8% or Australia’s Qantas decreased 4% in shares.
Shares of most business travel lower , with shares in Intercontinental Hotels decreased
4.4%, and Thomas Cook travel decreased 4.5%.
Falling Income for Hog Farmers
The global meat consumption declined and thereby reduced the demand for animal
feeds. So, the meat and animal feed industries went into a decline. Demand for
sausage, beacon, pork chop and all other pork related meal dwindle in these few
days, pushing its price lower. Some major hog farming industries in Kansas, Texas,
California and Mexico were severely affected as China, South Korea and Russia have
placed an embargo towards the import of pork from these areas.
Waste of Scarce Financial Resources
President Obama asked the Congress for $1.5 billion to fight against the disease.
Such huge amount of money perhaps could be better of spent into helping
homeowners to cope with mortgage repayments or spent onto other public services
like schools and hospitals construction.
Impacts on Business and Travel
UK travel brokers TUI Travel, Virgin Holidays and Thomas Cook had cancelled all
of their flights and package holidays to Mexico during the peak of the outbreak, and
several countries such as Argentina and Cuba had also suspended all flights from
Mexico during this time.
Business travel is also a big earner for flight companies, hotels and associated
businesses, and this had also been badly affected by the outbreak of swine flu. The
National Business Travel Association (NBTA) published a survey regarding the impact
of swine flu on business travel, finding that as much as 61 % of business travellers
were cancelling their trips to Mexico in response to the outbreak in the country.
In Mexico City, canceled events and closed movie theaters, night clubs, museums
and other establishments were costing at least $57 million a day, according to city's
Chamber of Trade, Services and Tourism.
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6. In Canada, particularly greater Toronto, the outbreak sharply reduced tourism, and
kept even residents home rather than out shopping. The city's economy lost about
$950 million, a contraction of about 0.5 percent, according to The Conference Board
of Canada.
Not all Share Prices Fall
The financial and economical costs of this pandemic depend on the pace of its
spread. But the pharmaceuticals and drug companies were blooming because of the
increase in the demand for anti viral medicines. While it was true that many people
suffered from negative wealth effect, there were quite a number of people who gained
out of it. For instance, share price of Swiss firm Roche the manufacturer of anti-flu
drug, Tamiflu rose 3.5% while Glaxo Smith Kline which manufactures Relenza gained
5.7%..
Similarly, the mask companies were witnessing a surge in demand, as these are
mandatory to control the pace of spread.
What about Global Community?
In Geneva, there was an intergovernmental meeting held by WHO. The World
Health Organization reached agreement on a pandemic influenza preparedness (PIP)
framework for the sharing of influenza viruses and access to vaccines and other
benefits. The framework addresses a troubling controversy — should low- and middle-
income countries share influenza virus specimens with WHO without assurances that
benefits derived from sharing will be equitably distribute.
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