Al-Etihad, UAE, February 7
In 2016, the International Health Risk Commission of the National Academy of Medical Sciences estimated that widespread disease epidemics would cost the international economy more than $6 trillion during the 21st century at an average rate of $60 billion per year. The commission recommended that the international community spend $4.5 billion annually on prevention and preparedness measures for these epidemics. Its estimates were based on the economic costs of the SARS epidemic, which swept the world for a short time in 2003 and was estimated at the time to have cost the global economy some $40 billion. These numbers, while huge, are expected to grow even larger in regard to the coronavirus. This is for a pretty obvious reason: the difference between the size of the Chinese economy during the time of the SARS epidemic and its size today. Seventeen years ago, during the outbreak of SARS, the size of the Chinese economy was no more than 4% of the global economy. By contrast, today it accounts for some 17% of global economic output. The damage caused to the Chinese economy, which ranks second in the world – with a nominal economic output of more than $14 trillion and an annual growth rate of more than 6% – will undoubtedly affect other economies around the world, particularly in OPEC countries. China is currently the world’s largest importer of oil, at 14 million barrels per day. A 2% decline in growth of the Chinese economy will inevitably lead to a decrease in the country’s imports of crude oil, thereby increasing the current global glut and pushing oil prices down even more. This scenario is already beginning to unfold, as China already decreased its oil imports by 20%, an amount equivalent to the total annual oil consumption of the United Kingdom and Italy combined. Notably, this slowdown will come in addition to slowdowns in other sectors, such as tourism. No economic sector will come out unscathed by this current epidemic. The state of panic that has taken over the world during the past few weeks has been unprecedented. Unfortunately, the panic is only expected to grow as the number of coronavirus deaths continues to rise. Right now, there is no end in sight. – Akmal Abd Al-Hakim (translated by Asaf Zilberfarb)