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Reuters blog archive

from Breakingviews:

Ebola shows dangers, and power, of globalisation

By Edward Hadas

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Ebola is still spreading, bringing death, fear and economic damage. The tragedy is testimony to a glaring weakness in the modern economy – the stubbornness of inequality. But globalisation could yet, belatedly, relieve the disaster.

The human cost of the crisis continues to mount. So far, there have been nearly 4,000 notified deaths, according to the World Health Organization. The World Bank on Oct. 7 provided some estimates for the economic impact of the current outbreak. On the most pessimistic scenario, the financial cost to West Africa could be $33 billion.

That would be a tragic economic loss to the region, especially for the three most affected countries, Sierra Leone, Guinea and Liberia. But the world could afford to help. The worst-case total is just 0.2 percent of U.S. GDP. To do significantly more economic damage, Ebola would have to sow panic or spread into richer parts of the world.

from Global Investing:

Measuring political risk in emerging markets

(Corrects to say EI Sturdza is UK investment firm, not Swiss)

Commerzbank analyst Simon Quijano-Evans recently analysed credit ratings for emerging market countries and concluded that there is a strong tendency to "under-rate" emerging economies - that is they are generally rated lower than developed market "equals" that have similar profiles of debt, investment or reform. The reason, according to Quijano-Evans, is that ratings assessments tend to be "blurred by political risk which is difficult to quantify and is usually higher in the developing world compared with richer peers.

However there are some efforts to measure political risks, and unfortunately for emerging economies, some of those metrics seem to indicate that such risk is on the rise. Risk consultancy Maplecroft which compiles a civil unrest index (CUI), says street protests, ethnic violence and labour unrest are factors that have increased chances of business disruption in emerging markets by 20 percent over the past three months. Such unrest as in Hong Kong recently, can be sudden, causing headaches for business and denting economic growth, Maplecroft says. Hong Kong where mass pro-democracy protests in the city-state's central business district which shuttered big banks and triggered a 7 percent stock market plunge last month.

from Global Markets Forum Dashboard:

Ebola’s “worst case” economic impact may total more than $40 billion – World Bank’s Evans

As world leaders gather this week for the annual International Monetary Fund and World Bank  autumn meetings, Ebola will be top on the list of priorities. Apart from the human toll, the economic impact will be felt for at least a couple of years, said David Evans, senior economist of the World Bank’s Africa Division.

David Evans, senior economist, World Bank's Africa region

David Evans, senior economist, World Bank's Africa region

"What we see is that in the short run, by the end of this year, Guinea, Liberia, and Sierra Leone are likely to be about $359 million poorer than they would have been in the absence of the Ebola outbreak,” Evans told the Global Markets Forum ahead of the meetings. “With our estimates of the impact of West Africa alone, even in a less tragic case, the lost GDP is likely to run into the billions. And in a worse case, we have even higher numbers (more than $40 billion).”

from Breakingviews:

Ebola sets clock ticking on West African economy

By Martin Hutchinson

The author is a Reuters Breakingviews columnist. The opinions expressed are his own. 

The West African economy may yet survive Ebola – but the clock is ticking. Matching the last four years’ 28 pct growth isn’t realistic. Controlling the deadly outbreak before year’s end, though, could preserve enough investment and resources to meet an expanding population’s needs. Given the virus has already spread as far as America, there’s no time to waste.

from Data Dive:

Ebola’s spread brings host of other diseases in its wake

Almost 3,000 West Africans have died from the current outbreak of Ebola virus, and on Tuesday, the U.S. Centers for Disease Control and Prevention warned that by January between 550,000 and 1.4 million people could be infected if nothing is done.

But the outbreak, which began in Guinea in March before spreading to Liberia, Sierra Leone, Nigeria and Senegal, is only part of the terrifying picture. Last week, fear of Ebola caused locals to kill eight members of an Ebola education team, sick people are avoiding clinics, and the World Health Organization says that 208 of the 373 infected healthcare workers in the region have died from the virus.

from Full Focus:

Frontlines of Ebola

Attempts to stop the spread of the worst outbreak of the disease in history.

from Breakingviews:

Fear is key to Ebola’s economic contagion

By Una Galani

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Fear is key to the economic contagion of Ebola. The gruesome disease that has claimed 1,145 lives in parts of Africa has yet to travel beyond that region’s borders. But Asia’s crisis with severe respiratory syndrome (SARS) in 2003 showed what might happen if it does. Changes to behaviour hurt growth and productivity more than the actual disease.

from The Great Debate:

Remember the movie ‘Outbreak?’ Yeah, Ebola’s not really like that.

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The Ebola outbreak continues to spread in Guinea, Liberia and Sierra Leone, the countries hardest hit by the disease. More than 1,000 people have now died from the virus. The Centers for Disease Control and Prevention has issued its highest-level alert for a response to the Ebola crisis. The World Health Organization has declared the outbreak a Public Health Emergency of International Concern. The disease is intensifying in West Africa, but the epidemic poses minimal risk to Americans. So why are we so afraid?

Scientists think about the risk of Ebola in terms of how likely someone will get it and die. That probability of someone in this country dying from Ebola is miniscule. But how the average person thinks about risk is more complicated. Other factors -- including fear of the exotic, dramatic and gruesome -- heighten our anxieties and capture our imaginations.

from Global Markets Forum Dashboard:

U.S. shale revolution continues to upend geopolitics

Dominick Chirichella, president, Energy Management Institute

Dominick Chirichella, president, Energy Management Institute

Oil traders who bet on rising prices were hit with a double whammy on Tuesday in the way of announcements from the top two energy data agencies. The still-nascent U.S. shale energy revolution is upending eons-old geopolitical events and it still seems to be in the early days.

Global energy watchdog the International Energy Agency revised lower its outlook for oil demand this year back to 2012 levels as the U.S. Energy Information Administration (EIA) said July U.S. oil production rose to its highest in more than a quarter century.

from Stories I’d like to see:

The price of life and George W. Bush post-White House

A spectator smokes a cigarette as she waits for the start of the Dubai World Cup at Meydan Racecourse in Dubai

1. How government accountants value life:

Last week, the New York Times reported: “Buried deep in the federal government’s voluminous new tobacco regulations is a little-known cost-benefit calculation that public health experts see as potentially poisonous: the happiness quotient. It assumes that the benefits from reducing smoking -- fewer early deaths and diseases of the lungs and heart -- have to be discounted by 70 percent to offset the loss in pleasure that smokers suffer when they give up their habit.”

I hope editors at the New Yorker or Sixty Minutes noticed.

Did you know that a federal agency -- the Office of Management and Budget, which did the cost-benefit analysis described by the Times -- actually employs people who calculate how many lives will be saved by government regulations; then calculates the dollar value of the lives saved, and then weighs that value against the “cost” of the regulation?  Apparently in this case, part of the cost to be calculated was the cost of the lost pleasure from quitting smoking.

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