Asian countries should fight the fear caused by severe acute respiratory syndrome (SARS), which could bring negative impact to economic development, experts said in Beijing Tuesday at a forum called "SARS and Asia's Economy -- Impacts and Policy Recommendations".
Agreeing on the temporary influence of SARS, economists participating were greatly concerned about handling economic development while overcoming the fear of SARS. They also called for concrete measures to eliminate any overreaction among the public.
Chino Tadao, president of the Asian Development Bank (ADB), said the bank's ongoing research on SARS' influence on Asia found that its impact not only covered social and economic sectors, but also posed great psychological problems among the public.
This in turn brings a negative influence on certain economic fields, such as tourism, transportation, entertainment, retail and food services, Chino Tadao said.
Hu Angang, director of the Center for China Study of Tsinghua University, said the former panic among Beijing residents was due to inadequate knowledge and information on SARS. But an investigation May 5 showed Beijing residents were becoming more calm and optimistic.
Hu emphasized SARS' affect on China as a big economy is not an economic crisis but a psychological tension that has brought about economic loss. Currently, China should go all out to remove or abate the SARS fear so as to ensure the safety and health of the citizens.
ADB chief economist Ifzal Ali said SARS has created a disproportionately large psychological impact on people in relation to its relatively low death rate. Among the reported SARS cases, the mortality rate has been seven percent and the recovery rate is 43 percent.
Rapid transmission of sometimes incorrect information about SARS and lack of sufficient medical information led to the extreme psychological fear, he said. Medical risk gave rise to uncertainty and a degree of overreaction in some cases, which is impacting negatively some Asian economies.
Ali pointed out the experience in a few SARS-affected countries showed there are a number of channels by which the SARS outbreak could affect an economy. In locations with a high incidence of SARS, the movement of people is restricted, thus reducing consumer spending.
Tourism-related service sectors, including airlines, hotels, entertainment, retail and restaurant business, are particularly affected, Ali noted. Exports will also be affected as trade fairs and business travels are canceled and demand for goods from affected areas fall, and the persistence of the outbreak could dampen investor confidence, resulting in weaker investment and inflow of foreign capital.
The supply side will also have shocks, Ali said, and the work force will be reduced due to the disease, affecting both the service sector and manufacturing. Delays in international shipments of parts and final goods may also hamper cross-border trade, aggravating the supply-side shocks.
Ong Keng Yong, secretary-general of the Association of Southeast Asian Nations (ASEAN), addressed the forum in a letter that an atmosphere of panic can be felt everywhere in the world, which has led to economic loss in each country.
Asian countries should strengthen their communication to let the public have full access to knowledge about SARS.
(Xinhua News Agency May 14, 2003)