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Severe Acute Respiratory Syndrome (SARS) is a lethal infection that has prompted the World Health Organisation (WHO) to issue a global alert to doctors and governments.

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Introduction

Introduction Severe Acute Respiratory Syndrome (SARS) is a lethal infection that has prompted the World Health Organisation (WHO) to issue a global alert to doctors and governments. The WHO believes this is a new strain, which has mutated to become more dangerous to humans. The disease is contagious and has no known cure, thus can be life threatening. The easy of carrying the disease around and its contagious nature has enabled it to spread across the globe very rapidly. So far, SARS has spread to 30 countries/regions, with 8240 probable cases causing 745 deaths worldwide. It was first reported when a US businessman died in a Hong Kong in mid-March after having visited China and Vietnam. Suspicion rose when the hospital staff in Hong Kong subsequently fell ill. However, the virus is believed to have originated in China's southern Guangdong province in November, and was spread around the world by air travellers in February. This rapid spread both regionally and globally has had varying impacts on economies, especially the South East Asian economies that have been directly or indirectly affected by SARS. In this report I have attempted to highlight chronologically the development and effects of SARS by selectively picking news articles from various sources. I will continue by explaining the implications on both micro and environments particularly in South East Asia. Finally I will conclude by outlining what has been and what can to be done in the future to prepare us for similar shocks in the future. Chronological Developments and its Effects (Unable to find relevant news articles from 01/03/03 to 16/03/03 I have started from thee 17/03/03) 17 March-23 March WHO declares health threat 17/03/03 (Bangkok Post) Travellers are spreading mystery strain of pneumonia. It cannot be stopped by standard drugs and its still unsure whether it is a viral or bacteria. Suspected to have struck china's Guangdong province in November. ...read more.

Middle

If SARS continues for 6 month, deflation is in china is expected to be 0.4%. Listings on hold as SARS kills sentiment 13/05/2003 (Bangkok Post) Revenue for listed firms have dropped dramatically 5-50%. State enterprise privatizations and listings are likely to be delayed this year due to ongoing market uncertainties in the wake of SARS epidemic. Investor sentiment throughout the region has been affected, with many institutions considering cutting their portfolio weightings for Asia. Cathay slashes fares to win back travellers 13/05/2003 (Bangkok Post) Aim is to regain 80% of pre-SARS business Facing the worst crisis in its history from the outbreak of SARS, Hong Kong-based Cathay Pacific Airways is fighting back by heavily discounting airfares and introducing a Super Deal campaign to boost its passenger totals. State offers small tourist firm B4.5bn credit line 14/05/2003 (Bangkok Post) In Thailand, small tourism related businesses are facing liquidity problems as a result of SARS outbreak and war in Iraq. They are eligible to draw up to B5m in loans. Programme offered by Small Industry Credit Government Corporation (SICGC) in conjunction with SME Bank * The interest rate would be lower than minimum bank lending rate charged by commercial banks * Agency projects total figure to top B10bn this year and B30bn in 2007 SARS takes shine out of South East Asian exports 14/05/2003 (Bangkok Post) SE Asian gold jewellery manufacturers who have secured lucrative markets in the middle east could be on the verge of losing ground to Turkey. * Travel ban on travellers from the SARS hit countries has affected activity, since usually gold and gold jewellery are hand carried, i.e. cannot be transported to their destinations. Take unpaid leave, Dragonair tells staff 14/05/2003 (Bangkok Post) Dragonair hard hit because of its focus on mainland china and Taiwan SARS helps to push remote office 14/05/2003 (Bangkok Post) People are now afraid to travel despite the stringent measures in place to constrain the SARS epidemic. ...read more.

Conclusion

If the outbreak lasts for much longer than what most analysts are now expecting - one to two quarters from March - and the disease spreads on a much larger scale, the economic fallout on the affected countries and East Asia would be more devastating than outlined above. However, there is hope since the region as a whole has managed to run a substantial current account surplus for consecutive year, building up huge foreign exchange reserves. Large foreign exchange reserves provide cushioning from the fall in foreign exchange from tourism and exports. Therefore, continuing along this path of maintaining reserves, is good practice to prepare oneself for future shocks Also, amongst the worst hit, Singapore and Hong Kong, both have efficient and reliable medical systems. Therefore, the efforts to contain SARS have been very efficient, as opposed to China who is also amongst the worst hit, but a significantly poor quality medical system. Therefore, how well China manages to contain SARS will be a key factor in determining the growth of this region. The purpose of the paper was to highlight that an external shock such as SARS, is not confined to the parameters of where it originates, but can severely affect its neighbours and the rest of the world as well. Economies in SE Asia have been strongly affected, but one should not forget that this has had knock-on effects on industries in other parts of the world.4 To reduce the impact for similar shocks in the future countries could, and this is not just for East Asia: * Maintain a healthy reserve at all times as mentioned earlier * Try and establish better communication such that the disease can be tracked down as soon as possible. The earlier the disease is detected the less the impact. * Invest in organisations that carry out research to find possible cures for these unexpected and new diseases * Establish a contingency plan to contain these contagious killer diseases i.e. so countries are better prepared for the future. ...read more.

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