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The Impact of Epidemics

Posted By IRMSAInsight, 12 December 2014

The Ebola epidemic has claimed over 5000 lives thus far, the hardest hit areas are in West Africa especially in Guinea, Sierra Leone and Liberia. The epidemic is not only affecting provision of the health, but is having an impact on the economies of these countries and the rest of the continent.


In his presentation at the IRMSA conference, CEO of the South Africa Chamber of Commerce & Industry (SACCI), Neren Rau, explored this impact. He explored the current status of the Ebola epidemic, nature of epidemic risks in general; the economic impact of epidemics as well as how countries and businesses should ideally respond to this challenge.


Unsurprisingly, tourism has been the hardest hit economic sector and the South African tourism sector has also been affected. “With Africa increasingly being seen as a future economic growth point, the management of the epidemic will affect perceptions around investment opportunities on the continent,” warned Rau.


“The Ebola epidemic takes place in the backdrop of a global economy that is vulnerable and local economies that are volatile, the responses to the epidemic have thus far included interventions such as flight restrictions, curfews and tightened boarder access control, as government attempt to reduce the virus from spreading in their respective countries,” explained Rau.


According to Rau, the workforces in affected areas tend to be confined to staying at home to avoid coming into contact the disease. This lack of productivity naturally has an undesired impact on production and on the economic growth of the countries affected.


“Looking at the trends around epidemics previously, it is clear that epidemics have been as unpredictable as the viruses that caused them. The number of deaths that occurred as a result has varied greatly,” says Rau. “The increasingly globalised and mobile world means that epidemics can spread rapidly to other parts of the world resulting in a pandemic,” he adds.


Epidemics threats are also different from other risk events in that they have a longer duration than other risks.  They are also different from other risk events in that they affect suppliers, clients and counterparties at the same time.  


Furthermore, they have potential to cause high levels of staff absenteeism and the extent of their impact is difficult to predict especially effects such as psychological disorders including panic, government reaction, family stress and so on.


When reaching these proportions the impact is felt in terms of communication facilities, power, transport and food delivery. Epidemics often they lead to possible degradation of critical national and international infrastructure. “If the epidemic is characterised by rapid recovery and postponed consumption - investment also recover rapidly,” argues Rau.


“An effective epidemic crisis response requires a coordinated regional effort. In addition to SA having a sound national epidemic response strategy in place, Southern Africa likely to expect SA to take lead,” he says. However, national and sectorial contingency plans will fail if they are not complemented by effective institutional continuity plans.

“At the institutional level, the onus is on companies to have effective business recovery plans and good governance practices,” says Rau. He adds that regulatory relief is not a substitute for adequate planning and preparation, therefore should not be part of participants’ Business Continuity Management (BCM) strategies.

Rau advises BCM owners to review existing plans and explore the impact of an epidemic event on their business. “Key responders should review their plans: human resources, facilities, corporate communications and travel and security. It is also useful to establishing partnerships with other organisations that have similar responsibilities and staff with similar capabilities – this might be an important supplemental element in back-up plans,” he adds.


“Contingency planning for personnel should also include: Risk reduction measures, including hygiene measures, infection control and personal protective equipment,” continues Rau. Adding that awareness, education and communication strategies are also crucial elements of the process. “Evacuation planning, ensuring the availability of medical expertise and assistance in a crisis are also important – this includes the management of on-site cases as well as counselling and grief support,” concludes Rau.



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