A closer look at the economics of Ebola

Despite the rising public concerns over the Ebola epidemic, to date the disease's impact on the global economy has been muted. That's chiefly because the countries most affected by the disease -- Guinea, Liberia and Sierra Leone -- are small in economic terms, accounting for roughly 2 percent of the gross domestic product of Sub-Saharan Africa.

But the regional economic effects of Ebola could be far more serious if the outbreak were to spread to Ivory Coast and Ghana, which are near the Ebola zone. Such concerns are reflected in the rising price of cocoa, which is widely produced in both countries and which has climbed 23 percent this year even as the price of other commodities has fallen. Ghana is also an important producer of oil and precious minerals.

Borders in the region are porous, which adds to the international community's challenges in combating this disease.


"Looking good today does not make people feel confident that they will be sitting pretty in two weeks," said Stephen Morrison, a senior vice president at the Center for Strategic and International Studies (CSIS) and director of its Global Health Policy Center, in an interview. But "While they are vulnerable ... [Ghana and Ivory Coast] have the basics of a functional public health system, which was absent in these other countries. That doesn't mean that they couldn't be overrun with an influx of cases."

Ghana, a country of more than 25 million, shares a border with Ivory Coast. It is also where the U.N. has decided to base its mission to respond to the Ebola epidemic. Washington has provided $1.7 million to the Ghanaian government for Ebola preparedness and response planning. Officials in Ghana, who have made gains in poverty reduction in recent years, have lamented that fears about Ebola have hurt their country's tourism industry. Fear of the disease is something that economists will continue to monitor.

The International Monetary Fund recently cut its forecast for growth in Sub-Saharan Africa because of Ebola, which has hurt tourism and exports such a coffee since many people have abandoned their farms.

Meanwhile, the international community is working to slow down the spread of the epidemic, which has hit Guinea and Liberia, which both border Ivory Coast. The World Health Organization has warned that new cases also could emerge in Benin, Cameroon, Central African Republic, Democratic Republic of the Congo, Gambia, Mauritania, Nigeria and Togo.

As these nations grapple with the crisis, financial markets are beginning to assess the potential risks of Ebola outbreaks elsewhere around the world. For now, investors are remaining calm, with little evidence that the isolated cases that have cropped up in the U.S. and Europe are affecting stocks.

"Admittedly, fears over Ebola have been added to a long list of concerns weighing on global equities and on bond yields," said Julian Jessop, chief global economist at Capital Economics, in a report. "But the key point is that they have ranked well below other, more tangible threats, notably worries over the economies of the eurozone and China and the outlook for monetary policy in the U.S. Unless the Ebola crisis takes a major turn for the worse, sentiment on these other factors should continue to set the tone. "

Whether investors remain remain quite so sanguine about the economic impact of Ebola depends in large part on public sentiment, with some signs that fears are starting to mount. The governors of several states, including New York and New Jersey, came under fire over the weekend for instituting mandatory quarantines for health care workers returning from the Ebola zone, a move that experts argued was not medically warranted.

Some experts also expressed concerns that the move would make the Ebola epidemic worse by discouraging health care workers from treating patients in the affected areas. In response to such pressure, both New Jersey and New York loosened their policies and have since allowed people to quarantine themselves in their own homes.

This illustrates the bind public officials have found themselves because of Ebola, which has killed one person in the U.S. By comparison, thousands of Americans are estimated to die of the flu each year.

"It's a fine balance to strike -- a slow response might mean playing catch-up later and missing the chance to nip the disease in the bud, but being too aggressive might fuel panic and prevent people who might need treatment from coming forward," Jessop said. "Locking people up even when they have tested negative looks like an overreaction and may prove counterproductive."

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    Jonathan Berr is an award-winning journalist and podcaster based in New Jersey whose main focus is on business and economic issues.