Impact on Affected Regions Impact on the Rest of the World Impact on International Business Ebola halts harvests and international trades have been affected in African countries Leaving Investors Drastic fall in exports Tourism Impacts on Economical Environment of West Africa – Liberia (PESTE) Plummeted economy’s growth Hikes in food prices Inflation Closing of borders FDIs Negative Multiplier Effects Impacts on Environmental Factors of West Africa – Liberia (PESTE) Peace Index Demand of better and higher quality of healthcare Control the widespread of diseases CONCLUSION International Community Efforts.
United Nations & World Bank United Nations Children’ Funds World Health Organization Unresolved Issues Availability of Vaccines and Cures HUNGER/FAMINE DEPTH OF RESEARCHES ON EBOLA Objectives 1. To understand in more depth on the recent Ebola virus outbreak in West Africa 2. To analyze on who are affected by the outbreak 3. To analyze on what, where, when and how did the outbreak create an impact on individuals and economy 4. To relate how the outbreak may have an impact on the international business 5. To relate how the outbreak may have an impact on PESTE – Economical Environment 6.
To relate how the outbreak may have an impact on PESTE – Environmental Factors 7. To analyze the international efforts from the international communities 8. To analyze what are the unresolved issues and possible future developments History/ Background of Ebola What is Ebola? Ebola hemorrhagic fever is a disease caused by one of five different Ebola viruses. The virus causes an acute, serious illness, which is often fatal if untreated. Ebola is extremely infectious but not extremely contagious. Ebola could be considered moderately contagious because it is not transmitted through the air.
However, humans can be infected by the virus if they come in contact with body fluids from an infected person or contaminated objects. The first Ebola outbreak in humans occurred in 1976, in 2 places – Northern Zaire, Central Africa, and Southern Sudan. This virus was named after the Ebola River, where it was first recognized in. The first outbreak of Ebola in Sudan infected over 284 people, with a mortality rate of 53%. According to the World Health Organization (WHO), “there is no specific treatment or vaccine,” and the fatality rate can be up to 90%. Ebola Epidemic 2014.
The 2014 Ebola epidemic is the largest in history, affecting multiple countries in West Africa. The outbreak has affected the people from all kinds of sectors such as household, business, government and even international sectors. The people living in the rural areas of Africa are the first to get heavily affected, as they did not have access to any medical aid or attention. Right after 2 cases were reported outside of the region; each one in USA & Spain respectively, the whole world became more cautious especially with anyone from the Ebola-hit countries entering their country.
The authorities are taking extra steps and procedures to ensure that the virus is not being brought into their countries. Businesses, especially in West Africa are affected tremendously. The government is under pressure in finding vaccine for the virus as well as stepping up protection measures to control the viral virus outspread. In the recent outbreak in West Africa, the majority of cases in humans that occurred are a result from human-to-human transmission. Ebola spreads via direct contact through broken skin or mucous membranes with the blood, or other bodily fluids or secretions (stool, urine, saliva, semen) of infected people.
Infection can also occur if broken skin or mucous membranes of a healthy person come into contact with environments that have become contaminated with an Ebola patient’s infectious fluids such as soiled clothing, bed linen, or used needles. The current outbreak in West Africa is the largest and most complex Ebola outbreak since the Ebola virus was first discovered in 1976. Guinea, Liberia and Sierra Leone are currently the top three countries that are entirely affected by Ebola virus. Other parts of the world that are badly affected are Spain, Senegal, Nigeria and United States – Dallas, Texas and New York City.
Impacts on the affected regions Ebola virus has caused a greatly economic impact on the West African region, especially in three countries – are Guinea, Liberia and Sierra Leone. Several West African countries have significant numbers of expatriate workers in critical sectors of the economy and the fear that the Ebola has caused almost a mass movement of foreigners back to their home countries. With weak health care infrastructure in most of the regions, the expatriate population is not motivated to stay. In Ghana, for example, a country with no reported cases of Ebola, several global companies have evacuated non-essential foreign personnel.
Across the three regions, foreigners are showing even greater levels of caution, including the Chinese who in the last few years have invested heavily in Africa. Thus, it affects heavily the region and countries because the unemployment rate increases and this lowers the contribution to the country’s GDP per capita. Ebola also has an impact on the West African region in sectors like trade, tourism and agriculture. Border closures by countries like Senegal and Ghana as well as travel bans by airlines to the worst affected countries, have a significantly adverse effect on trade in the region.
The West Africa’s size of market has always been one of the attractions for foreign investments. However, with the huge number of deaths caused by Ebola, the number of investments has decreased, as investors are cautious about the timing of their investments during these periods of their investments where Ebola virus is spreading in the regions. Thus, this disrupts trade from going on in the region. Airlines, hotels and travel companies are expected to suffer reductions in revenues. For instance, Gambia, which derives 16% of its GDP from tourism is perhaps the worst country affected in the region.
According to the tourism minister of Gambia, the start of Tourism season in October has seen significantly lower number of tourists than in previous years with an anticipated 50-60% decline in numbers. Gambia, a country where half the population live below the poverty line and are dependent on this industry for their livelihood, conditions for the people in the country affecting with the spread of Ebola virus will be worsen affecting them economically and also socially. Agriculture is another sector that is seriously affected by Ebola.
In Liberia there have been disruptions due to farmers staying away from farmlands and market places. Outside of these countries, there are also concerns regarding the impact on agriculture production, especially cocoa. West Africa produces 70% of the world’s global cocoa supply with Ghana and Ivory Coast accounting for 60%. This could be threatened if the virus continues to spread and extends to these countries. With so many disruptions to the productive sectors of the region’s economy, there will be a fiscal gap that must be managed. Impacts on the rest of the world
The outbreak has affected the rest of the world through different means. Firstly, it has affected the supply of oil. Oil production in resource-rich Africa is a major source of income for a number of countries, but the virus is restricting expansion. ExxonMobil has postponed their plans to drill of Liberian shores. The company even prohibits some of their employees from travelling to countries involved in outbreaks. This in turn affects the company’s expansion and disrupts oil production, as they are cautious of the virus. Secondly, food production and agricultural operations will also be affected.
Price will rise, for example, price of staple crop cassava has rise as high as 150% in some areas, while rice and maize harvests later in the year are expected to fall short. This is due to worker health and quarantine zones, reducing labor thus reducing production. In addition, Liberia’s rubber production is also affected due to the same reasons. On top of that, cocoa production will also drop. Two third of the world’s cocoa is produced in Ivory Coast and Ghana but with harsher restriction border restrictions affecting migrant workers which will result in restricted laborer availability according to the World Bank.
Thus, this will affect production around the world. Impacts on International Business 1. Ebola halts harvests and international trades have been affected in African countries Transportation is an important factor in all kinds of trade especially international trade. As regional trade has been reduced by land border closings due to the Ebola outbreak, there were slowdowns in container shipping and uncertainty about future supplies. As such, there were many delays of internal transport, which affects any business that is in these affected regions.
2. Leaving Investors After 24 painful years of civil war, Liberia had attracted $17. 6 billion of foreign investments to help rebuild the nation. With that, almost $7 billion of the investments were used on their agriculture. However due to the sudden outbreak of Ebola, these investor are abandoning the rebuilding works and leaving the nation. Since these investors decided to step in to invest in Liberia’s rebuilding works, they must have saw the business potential in Liberia.
However, now that the Ebola outbreak has wiped off the nation, there would be a high rate of leaving investors and they would have faced heavy losses. 3. Drastic fall in exports Exports play an important role in the economy as the growth of an economy is directly related to it. However, the instability in exports can adversely affect the process of economic development. Export instability stimulates inflation, which leads to goods and services to be costlier.
The agriculture industry is a very essential and important industry in India. In Liberia, their exports to India account for approximately 21. 3% while exports to US is almost 19. 2% of the total trade volume. As no country would want to import food that are produced in these Ebola affected regions in order to protect their people from the virus, there would be a drastic drop in the exports from these regions. 4. Tourism Liberia has taken a huge step towards international travelling and as a popular tourist destination in recent years. The United Nations World Tourism Organization (UNWTO) finally granted them full membership status in late 2011.
As travel and tourism in Liberia has seen major improvements in recent years, there was a huge potential in this industry. However, due to the Ebola outbreak in the area, tourism would be heavily affected as no one would want to risk their lives to enter the affected country. They would try their best to avoid this country so that they do not have the risk of getting the virus. Hence, tourism rates would fall drastically and the efforts that were done previously to put Liberia on the international travel and tourism map might have gone to waste until the epidemic has been contained.
Even so, there will still be a fall in their tourism rates despite the epidemic being contained. Impacts on Economic Environment Factors in West Africa (Liberia) – PESTE 1. Plummeted economy’s growth The agriculture industry is an essential and very important industry in India, especially in Liberia where it had helped fuel double-digit economic growth. However, the Ebola outbreak has hit the country’s borders during the peak of their coffee and cocoa cultivation season. This leads to the economy’s annual growth to plummet to 3%. 2.
Hikes in food prices The Ebola virus is wreaking havoc on the farmers who had just started to bring new economic vitality to a region desperately in need. 80% of farmers in the affected region produce 80-90% of the food consumed in the region, these regions have heavy reliance on their agriculture industry for food. Hence, both the producers and consumers are heavily affected. The Ebola outbreak has caused a significant impact on both the national and regional food security. With limited supplies and huge demands, there would be a shortage caused.
With a shortage of food, suppliers realize that they can increase their selling price and hence leading to hikes in food prices. Neighboring regions also face the sharp hike in food prices. [Refer to Appendix Fig. 1] 3. Inflation – Decrease in Consumers’ Purchasing Power Inflation would be caused due to the overall price of goods and services are increasing. Consumers would now have to spend a larger portion of their disposable income on the same amount of food, which refers to the decrease in their purchasing powers.
They can now afford lesser with the same amount of disposable income. As a result, consumers would adjust their buying behaviors, which would lead to a decrease in overall consumer spending in the country. 4. Closing of borders Since the outbreak of Ebola in West Africa, many countries have closed their borders due to the fear of Ebola spreading into their countries. The authorities in several countries have implemented entry restrictions to curtail the spread of Ebola from countries that had confirmed Ebola cases, while air carriers have restricted flights or modified schedules.
Flights serving destinations both inside and outside Africa were also subjected to diversion or delay with little or no warning in order to quarantine passengers suspected or claiming to be exhibiting Ebola-like symptoms. For example, Singapore’s authorities have announced that from 5 November onwards, nationals of Guinea, Liberia and Sierra Leone will require visas to enter the country as well as to be screened for fever at all entry points.
Due to delays caused by stricter checks at borders, the economy would be affected as the business sectors would face losses. 5. FDIs Ebola has affected Foreign Direct Investments (FDIs) indirectly, which has remained as a significant part of the African economy as a vestige of colonialism. The increased vulnerability and degenerating economic conditions have resulted in a reduction on FDIs by shattering investors’ confidence. There is a fear-induced psychological embargo-fear that is both of the disease itself and the aftermaths in the countries.
This fear discourages exactly the involvement in West Africa that is very badly needed to contain Ebola. As it stands, the total current account deficit of Liberia, Sierra Leone and Guinea is 12% of their combined GDP. Although this is not inherently negative, such a high current account deficit indicates heavy reliance on imports and foreign investments. 6. Negative Multiplier Effects With decreased spending, it would not only lead to a drop in a country’s export incomes, it would lead to a negative multiplier effect.
As a person’s spending is also another person’s income, the decrease in other countries’ imports of Liberia goods, for example, will result in the decrease in Liberia’s export incomes, workers’ incomes, etc. It would then lead to a bigger eventual impact on outputs and employment in Liberia. Impacts on Environmental Factors in West Africa (Liberia) – PESTE 1. Peace Index Due the uncertainties about future supplies, it will lead to social unrests. Since food productions and supplies are heavily affected, there would be limited food supplies for their people and hikes in food prices.
Hence, this would lead to social unrests such as corruption, riots to show unhappiness, social inequality, increase in crime rates and famine. It would also affect international business, as they would consider twice on the country’s peace index before entering their market. This is due to the negative impact that the social unrest would cause. 2. Demand for better and higher quality healthcare The Ebola epidemic has threatened thousands of life and there is a high demand for full medical protection and health care.
Many health care workers that were in these countries were affected and lost their lives while carrying out their duties as they may have not been wearing personal protection equipment or properly applying infection prevention and control measures when caring for the patients. This has created a near-collapse of those nations’ healthcare systems. These affected countries desperately needed the international community to help them with the rebuilding and equipping them with healthcare systems. The world will only be save from international spread if the epidemic can be controlled in West Africa.
Once the epidemic is contained, then these countries will need significant help in training a new healthcare workforce to replace the hundreds of professionals who died during the epidemic. 3. Control of widespread of diseases – Loss of lives Up to date, there is no FDA-Approved vaccine (e. g. Antiviral drug) that is available for Ebola. It currently has no cure but only prevention measures in order to reduce human transmission. According to the Centers for Disease Control and Prevention (CDC), there are a total of 7719 cases in Liberia, with a total of 3177 deaths, as of 6 December 2014.
This loss of lives would have caused problems and practices such as proper burial procedures in order to contain and not allow the virus to spread, identifying people who may have been in contact with an infected person, monitoring the health of contacts for 21 days, the importance of good hygiene and maintaining a clean environment to be taken seriously to prevent further spread of Ebola, family members suffering from the loss, increased rates of orphans when the children lost their parents and fear in the people of getting infected. International Community Efforts 1. United Nations & World Bank Mr.
Ban Ki-Moon – United Nations Secretary-General (UNSG) urges international community to step up and help in funding UN in order to tackle Ebola outbreak. Mr. Jim Yong Kim – President of World Bank emphasized that international community has no choice but to support the battle against Ebola as it is a question of when they will pay the price of it. $1 billion of funds are being urged and UN Security Council has created the United Mission for Ebola Emergency Response (UNMEER) with the primary task of coordinating resources to combat the epidemic under the leadership of the World Health Organization (WHO).
2. United Nations Children’s Fund (UNICEF) UNICEF funded a $200 million program to help contain the disease outspread and addressed communities immediate needs. Out of these funds, $65 million goes to the UNICEF’s programs in Liberia, $61 million to Sierra Leone and $55 million to Guinea. An additional $10 million is used to help neighboring countries to prepare for a potential spread of the disease within the borders, while the remaining $9 million is required for regional coordination efforts. 3. World Health Organization (WHO)
WHO aims to stop the transmission worldwide by publishing a roadmap to guide the international response towards the outbreak. They are also establishing Ebola treatment centers, strengthening capacity for laboratory testing, contact tracing, social mobilization, safe burials, and non-Ebola healthcare to monitor for reports of suspected cases from other countries. Unresolved Issues 1. Availability of Vaccines and Cures Since the outbreak of the virus in West Africa, pharmaceutical companies and health agencies have been rushing to create and experiment drugs and vaccines that could help contain the virus.
Trails are now being fast-tracked from a normal period of years and decades, to weeks and months due to the speed at which the virus is spreading. There are 2 vaccines that showed promising results from animal studies into human trials up till date. However, one of the major issues faced is the running of trails at speed. Therefore, researchers may not know if there will be any long-term effects of the vaccines. Not only, there is also a lack of trust from the public due to the ethical issues surrounding the testing of vaccines. 2. Food Supplies.
Due to the outbreak of the virus, many farmers in the areas have abandoned their farms in fear of contracting the disease. For example, up to 40% of local farms were abandoned in Sierra Leone. The United Nations Food and Agriculture Organization (FAO) have reported that food is increasingly getting short in the country. Not only, food shortages have worsened after regional trade was disrupted due to border closures and quarantine measures. Food supplies has become a huge worry of the government, people, as well as international organizations.
With lesser food supplies, there will also be numerous cases of hunger and famine, as families cannot have sufficient food on their table. This would eventually lead to subsistence diets and malnutrition in the people. 3. Insufficient Understandings towards Ebola As there are still no vaccines or cure for the Ebola virus, this shows that researchers still do not have full understandings of the virus. As much of the information that are available are based on old studies and references from the 70s and 80s, there are still too many unanswered questions and unresolved issues about Ebola.
Although Ebola could be fully under control in developed countries, nobody can be fully sure that it will not ultimately still hurt us. Hence, no country can take their defenses down on the legitimate concerns. 4. Best Methods to contain Ebola is Failing Tracing contacts of those infected is not working in Liberia, Sierra Leone and Guinea as they have thousands of infected people, which makes contact tracing impossible. It WHO estimates that each infected person has at least ten contacts, Liberia, that has over 3000 cases would means that there would be 30 000 potential contacts to follow-up on.
Therefore, although contact tracing and quarantining them would work in other countries, it is however not working in the West Africa due to the high rates of cases. Both the government and international communities would need to come up with a better method of containing this virus in a short time span in order to prevent it from spreading even further. Conclusion The Ebola Epidemic 2014 that started off in West Africa has caused the world’s concerns and notice. The outbreak has also created impacts, be it major or minor, on all sorts of sectors such as households, government, businesses, as well as international sectors.
Many international organizations and communities, such as United Nations, World Bank, United Nations Children’s Funds and World Health Organization, have stepped in to help ease the crisis as well as to contain the virus in order to prevent it from spreading even more. The epidemic has impacted International Business as it halts harvests and international trades in African countries. Not only, it has also caused investors to leave, and drastic falls in exports and tourism.
It has also affected the economical environment in West Africa such as the plummeting of economy’s growth, hikes in food prices, inflation, closing of border, reduction of Foreign Direct Investments and negative multiplier effects. There are also impacts on the environmental factors in West Africa such as a drop in their peace index, the demand for better and higher quality healthcare and the control of the widespread of diseases, which leads to loss of lives. However, although the virus is under control in developed countries, West Africa is still suffering from the epidemic.
There are still unresolved issues such as the availability of vaccines and cures, the shortage of food supplies, insufficient understandings towards the virus and new methods are needed to contain the virus. Therefore, nobody should let their defenses down as it is still unknown if the virus would not ultimately hurt us. Researchers and pharmaceutical organizations should also continue to come up with vaccines and cures in order to keep Ebola under control in the future. Appendices Fig. 1.
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