Global economy infected
The coronavirus outbreak is starting to look more like a worldwide economic crisis as anxiety about the infection empties shops and amusement parks, forces events to be cancelled, cuts trade and travel, and drags already slumping financial markets even lower.
More employers told their workers to stay home yesterday, and officials locked down neighbourhoods and closed schools. The wide-ranging efforts to halt the spread of the illness threaten jobs, paycheques and profits.
The list of countries touched by the illness climbed to nearly 60 as Mexico, Belarus, Lithuania, Nigeria, Azerbaijan, Iceland and the Netherlands reported their first cases. More than 83,000 people worldwide have contracted the illness, with deaths topping 2800.
China, where the outbreak began in December, has seen a slowdown in new infections, and yesterday reported 427 new cases over the previous 24 hours, along with 47 additional deaths. The city at the epicentre of the outbreak, Wuhan, accounted for the bulk of both.
New cases in mainland China have held steady at under 500 for the past four days, with almost all of them in Wuhan and its surrounding Hubei province.
With the number of discharged patients now greatly exceeding those of new arrivals, Wuhan now had more than 5000 spare beds in 16 temporary treatment centres, said Ma Xiaowei, director of the National Health Commission.
South Korea, the secondhardest-hit country, reported 594 new cases, the highest daily jump since confirming its first patient in late January.
Emerging clusters in Italy and in Iran, which has had 34 deaths and 388 cases, have led to infections of people in other countries. France and Germany were also seeing increases, with dozens of infections.
The head of the World Health Organisation said the risk of the virus spreading worldwide was ‘‘very high’’, citing the continued increase in the number of cases and the number of affected countries.
United Nations SecretaryGeneral Antonio Guterres urged all governments to do everything possible to contain the outbreak. ‘‘We know containment is possible, but the window of opportunity is narrowing,’’ he said.
The economic ripples have already reached around the globe. Stock markets plunged again yesterday. On Wall Street, the Dow Jones index took yet another hit, closing down nearly 360 points. The index has dropped more than 14 per cent from a recent high, making this the market’s worst week since 2008, during the global financial crisis.
The effects were just as evident in the hush that settled over places where throngs of people ordinarily work and play and buy and sell.
‘‘There’s almost no one coming here,’’ said Kim Yun-ok, who sells doughnuts and seaweed rolls at Seoul’s Gwangjang Market, where crowds were thin. ‘‘I am just hoping that the outbreak will come under control soon.’’
In Asia, Tokyo Disneyland and Universal Studios Japan announced that they would close, and events that were expected to attract tens of thousands of people were called off. Japanese officials prepared to shutter all schools until early April.
In Italy – which has reported 888 cases, the most of any country outside of Asia – hotel bookings are falling, and Prime Minister Giuseppe Conte raised the spectre of recession.
Shopkeepers like Flavio Gastaldi, who has sold souvenirs in Venice for three decades, wonder if they can survive the blow. ‘‘We will return the keys to the landlords soon,’’ he said.
The Swiss government banned events with more than 1000 people, while at the Cologne Cathedral in Germany, basins of holy water were emptied for fear of spreading germs.
In the US, online retail giant Amazon said it had asked all of its 800,000 employees to postpone any non-essential travel, both within the country and internationally.
The pain was already taking hold in places like Bangkok, where merchants at the Platinum Fashion Mall staged a flash mob, shouting ‘‘Reduce the rent!’’ and holding signs that said ‘‘Tourists don’t come, shops suffer’’. Tourist arrivals in Thailand are down 50 per cent compared with a year ago.
Economists have forecast that global growth will slip to 2.4 per cent this year, the slowest since the Great Recession in 2009. If Covid-19 becomes a global pandemic, economists expect the impact could be much worse, with the US and other economies falling into recession.
Health officials have reported the first US drug shortage tied to the coronavirus outbreak, which is disrupting production in China, but have declined to identify the manufacturer or the product.
The US Food and Drug Administration (FDA) said the drug’s maker recently contacted officials about the shortage, which it blamed on a manufacturing issue with the medicine’s key ingredient. Regulators said alternative medicines were available to treat patients.
The FDA said it had reached out to 180 drug manufacturers and asked them to check their supply chains and report any potential disruptions. It had identified 20 drugs produced or sourced exclusively from China, but declined to name them.
The FDA had good reason to not release the names of drugs facing potential shortages, said Rosemary Gibson, who wrote the book China Rx on that nation’s role in American health care.
‘‘People might rush to buy it, and that would create a worse situation,’’ said Gibson, a senior adviser at bioethics research group The Hastings Centre. ‘‘In the context of shortages globally, you have to be very, very careful.’’
More than 83,000 Covid-19 cases have been reported worldwide, nearly 79,000 of them in mainland China.
Restrictions on movements of people and goods have been imposed by at least 90 countries, and this was disrupting the flow of drugs and raw materials, said Nicolette Louissaint, executive director of Healthcare Ready, a non-profit group funded by drug distributors, governments and foundations that tracks the impact of epidemics and natural disasters.
For decades, the pharmaceutical industry has shifted manufacturing to China, India and other countries to take advantage of cheaper labour and materials. Today, roughly 80 per cent of the ingredients used in US medicines are made abroad, according to federal figures. India and other Asian nations also rely on Chinese drug ingredients to make finished generic pills.
China ranks second among countries that send drugs and biotech medicines to the US, according to the FDA. It is also the top exporter of medical devices and equipment to the US.
The country is a major producer of antibiotics for the US market, as well ingredients and medicines for common chronic conditions such as heart disease.
Chinese factories making pharmaceutical ingredients and drugs were still operating, with some trying to produce far more than usual and others still trying to get workers back, Louissaint said.
The FDA said it was in touch with 63 manufacturers with Chinese facilities that produced ‘‘essential’’ medical devices. While noting increased orders for masks, respirators, gloves and other protective gear, regulators said there were no reported shortages of those items in the US.