Is Zika More of an Economic or a Health Threat?

Taking its name from the forest where it was first discovered in 1947, the aedes mosquito-born Zika virus has been making as many headlines as Ebola did two years ago. But despite the panic, Zika is not a killer in the way Ebola is. In fact, its mortality rate is incredibly low. Officials say that of the estimated 1.5 million people who have been infected with the disease in Brazil since May 2015, where it is currently most prominent, three deaths have been linked, albeit loosely, to the virus.

The cause for so much concern derives from three reasons: the virus has no vaccine (and there won’t be one for another 18 months); the virus could be linked to microcephaly – a congenital disease causing babies to be born with abnormally small brains and later develop lifelong physical problems – and; the virus is costing a lot of money - we’re talking billions of dollars.

Latin America’s largest economy has seen an exponential increase of 5000 unprecedented suspected cases of microcephaly since Zika started spreading last year. Although there is no proven connection between the two as yet, the correlation is high, so the link is “strongly suspected” by the World Health Organisation (WHO). This has prompted the governments of El Salvador and Colombia, where Zika has become prevalent, to advise women to delay pregnancy (bearing in mind abortions are illegal in many Latin American countries, where 50% of the pregnancies are unplanned.)

I got in touch with Amelia Santos, an Economist at the UNCTAD and Dr Rafael Oliviera who works in the emergency department of a hospital in Bahia, Brazil, both of whom agree that it is wrong for governments to ask women not to get pregnant and that their duty is to inform about the risks. “The decision about pregnancy belongs to the mothers” said Oliviera.

The WHO, which was criticised for reacting too slowly to the Ebola epidemic in West Africa in 2014, announced on February 1st the explosive spread of the Zika virus in the Americas to be a “public health emergency of international concern.” But is this more of a health emergency than an economic one?

Let’s take a look:

Whether or not microcephaly is linked to the Zika virus (and there is some controversy about this, due to Colombia’s lack of microcephaly cases despite widespread Zika prevalence), it needs to be dealt with in a preventive and reactive manner, fairly fast. The WHO has said that it needs $56 million to find a treatment or a vaccine and to research links between Zika and microcephaly. However this depends on donations from other countries: bad news for Brazil, which is facing its longest economic downturn since the 1930s. Furthermore Brazil is hosting the 2016 Olympic Games in Rio and, according to Amelia Santos, this is Brazil’s primary concern.

As the causes for Zika’s rapid spread have been blamed on increased international travel and climate change, the US and Canada have advised women not to travel to infected areas. In fact, international airlines have started refunding pregnant women with scheduled flights for Latin America, which could be very damaging to Brazil’s economy, where tourism accounts for almost ten percent of GDP.

While economists are unable to calculate the impact Zika will have on Brazil’s economy, one thing is certain: tourism will take the hardest initial hit. Pregnant women are not the only ones who will be delaying holidays to the country’s paradise beaches. Paranoids and hypochondriacs will too. The symptoms are milder than those of dengue and in fact 80% of the cases are asymptomatic. But it doesn’t matter how much we are reassured that Zika is harmless (unless you’re expecting or have a chronic illness), a virus is a virus; and the media loves a good dose of panic. This means many European families are likely to change their summer 2016 plans to spend their money in a sunny destination closer to home now that Zika has spread to more than twenty countries in the Americas.

The upcoming Southern hemisphere winter might decrease the risks and threats of the virus spreading further across Brazil and neighbouring countries but as Europeans and North Americans see it, that is the time of year when temperatures rise north of the equator. This means increased mosquito activity in the northern hemisphere, thus an increased risk of Zika spreading where aedes mosquitoes are known to live (including parts of Europe and the US) during the months of June, July and August, when temperatures peak there.

Long story short: why go to Latin America and risk bringing Zika back to Europe this summer when you could just go to Spain and play it safe?

So, as well as possibly losing out on a huge chunk of money due to reduced tourism, Brazil is having to spend sums it can’t afford at this desperate time, as a preventative investment to both reduce the spread of the virus and to deal with the increasing number of microcephaly cases.

The Brazilian Health Minister, Marcelo Castro has said that Brazil is contributing financially to the development of a vaccine as well as a new testing kit in order to identify infections fast. According to The Guardian, 220,000 members of Brazil’s armed forces have been sent to help eradicate the Zika-carrying mosquitoes as part of the country’s “Zika Zero” public awareness campaign: a task similar to one which Brazil successfully carried out in the 1950s. The government has also distributed 400,000 repellents to pregnant women. However Dr Rafael Oliviera told me that this is not enough, especially as it neglects poorer women who aren’t yet pregnant. Point of information: a 100ml bottle of Exposis – the only efficient repellent available – costs on average R$57, which equals about US$14. In other words, a sum way above a very low income earner's budget, who is most at risk of getting Zika and lives on less than US$2 a day.

Brazilian armed forces distributing pamphlets about how citizens can protect themselves.

Brazil has been having to deal financially with an unprecedented increase in microcephaly cases, requiring a lifetime of care, since last year. Dr Oliviera confirmed that health care is provided to all Brazilian permanent residents but it is deficient. He said “We have a public healthcare system but it will be a big problem [for the country, economically] in the future.” When asked whether care workers would be provided to support mothers with microcephaly-born children, he told me that it is unlikely the government will provide assistance of that kind. “The government will only allocate social security.” he said. Families in Brazil often lack support from the government and are left alone, segregated from society when they have a disabled child to care for.

Since microcephaly causes severe developmental delays such as speech and movement, coordination and balance difficulties, dwarfism, facial distortions, hyperactivity, intellectual disability and seizures, full time assistance is required. This means mothers either need to be able to afford this type of care in order to carry on working, or they must give up their job to look after their child, meaning one less person contributing to the economy. Sure, in the grand scheme of things, the share of the infected population is minor compared to the total Brazilian population, but if the disease continues to grow, a more significant proportion of previously labouring mothers and fathers could be lost to caring for disabled children, thus slowing Brazil’s economic growth.

With regards to the international community, besides imposing commercial restrictions by advising their citizens not to travel to Latin America, the EU’s response appears to have been more reactive than proactive. The US however, has requested $1.8 billion in emergency funds to help combat the virus at home and abroad. As for NGOs, the WHO chief, Margaret Chan, is currently in Brazil voicing her support for the country’s “serious and transparent” efforts in fighting Zika. However the focus of this praise has been on Brazil’s commitment to keeping the country safe for Olympic athletes and supporters due to arrive in a few months, rather than the 20% of its population that lives below poverty line and is most at risk of contracting the virus and possibly microcephaly, which in the long run, could cost Brazil much more than the Olympics.

If Zika, and its possible link to microcephaly don’t receive the attention it deserves, its economic impact in the long-term could affect a whole raft of sectors of the economy, including education services, health care and baby product industries, if there is a sustained fall in the birth rate over a period of time. Already crushed by a list of economic problems – bribery scandals, political instability and low commodity prices –  before having to confront the Zika virus epidemic, Brazil finds itself in an unenviable situation.