Interview with Milan Brahmbhatt on Avian Flu

Before we get started on questions it might be useful to cover some background information on avian and human pandemic influenza.

Avian influenza, or “bird flu”, is caused by subtypes of influenza virus that normally infect only birds and, less commonly, pigs. In its highly pathogenic form it spreads very rapidly through poultry flocks and has a mortality that can approach 100%, often within 48 hours. The current outbreaks of the H5N1 avian influenza virus, which began in South-east Asia about 2 years ago, are the largest and most severe avian influenza outbreaks on record. The persistence and spread of H5N1 in poultry populations poses two main risks for human health. The first is the risk of direct infection when the virus passes from poultry to humans. Currently the H5N1 virus does not make this crossing very easily and so the number of human cases confirmed by the WHO is still relatively small, around 133 so far. When infection does occur though, the disease caused by H5N1 follows an unusually aggressive clinical course, with rapid deterioration and high fatality. Primary viral pneumonia and multi-organ failure are common. The result leads to death in over half of cases so far.

A second risk, of even greater concern, is that the virus – if given enough opportunities – will change into a form that is highly infectious for humans and spreads easily from person to person. Such a change could mark the start of a global outbreak (a human influenza pandemic). The World Health Organization (WHO) and other international organizations have recently warned that an influenza (flu) pandemic is both “inevitable” and “imminent.” Nevertheless there are great uncertainties about the timing, virulence, and general scope of a future human pandemic, about the potential numbers of people who might become ill or die, and about the potential economic and social impacts of such an event.

Well, I guess the difference between an epidemic a pandemic is one of scale. An epidemic is defined as a situation where new cases of a human disease are occurring much more rapidly than what is normally expected. When you have an epidemic that is restricted to just one location, it's usually for an outbreak. On the other hand, when you have an epidemic that affects a large geographical area covering several countries, or even the world, as a whole, it's referred to as "a pandemic."

Just to also add, the equivalent of a pandemic amongst animals is referred to as a panzootic. And avian flu right now has already become a panzootic. It's affecting many, many countries around the world.

I guess direct contact between humans and infected poultry or surfaces that have been contaminated by poultry feces, that's what's presently considered to be the main route for humans being infected.

So far, most cases have occurred in rural or semi-rural areas, where many households keep small poultry flocks, and exposure is also considered likely during slaughter or defeathering, and preparation of poultry for cooking. But it should be noted that it remains safe to consume poultry and poultry products that have been properly prepared and properly cooked.

There were actually many questions that were similar to this one, so instead of repeating myself and answering all of them one by one, I thought we would just answer one or two questions that cover most of the ground that all of the questions referred to.

So, first thing to note is there are huge uncertainties about the dimensions of a future human flu pandemic, so discussions of economic impacts can only be based on very broad assumptions and scenarios of what a pandemic might look like. The SARS epidemic in East Asia in 2003, in fact, does provide some crucial evidence as to the scale of economic effects that can occur. And, in fact, I think all of the estimates of economic impacts that have been done so far use the SARS experience as a starting point.

Now, there are broadly three types of economic impacts that can be visualized. The first relates to the present stage of avian flu transmission between birds, or from birds to humans, and then the other two relate to potential impact during a human influenza pandemic.

So, during the ongoing stage that we have right now, economic losses have been mainly due to loss of poultry production, and exports due to illness, or culling, or restricting poultry exports.

At the overall macroeconomic level, costs in East Asian economies so far have been fairly limited - a few tenths of a percent of GDP - and have been masked by generally strong overall economic growth, but could rise in the future and have already been high for specific sectors and communities. For example, in economies like Vietnam where the bulk of poultry production is by backyard producers, the impact has been felt by individual rural households. Survey data show that in Vietnam the poorest quintile of households relies more than 3 times as much on poultry income than does the richest quintile.

Now, if we turn to the potential impact under a human flu pandemic, the most immediate economic impact might arise actually not from actual death or sickness, but from the efforts of people to actually avoid becoming infected, and this was at least the experience during SARS, when people tried to avoid infection by minimizing face-to-face interactions with other people, and this resulted in a very severe demand shock for services sectors such as tourism, transportation, retail sales, hotels, and restaurants.

Now, during SARS, there was an immediate economic loss of around 2 percent of East Asian GDP in the second quarter of 2003, even though only about 800 people ultimately died from the disease.

Now, given that pandemic flu would be a global disease and would last longer than SARS, one could make an assumption that this kind of economic shock could occur equally all over the world, and it could last longer than did the SARS shock.

So, for example, if we look at the world as a single economy, ignoring exports and imports, a scenario with a 2 percent loss of global GDP over one year would represent a loss of around $800 billion.

So, the purpose of this simple calculation is mainly just to get an idea of the possible orders of magnitude. Others following the same kind of logic, the consulting firm Oxford Economic Forecasting noted that a 2 percent lost of world GDP over six months would yield a loss of $400 billion, and they described that as a minimum loss, which I think is correct.

The outcome of a global shock would also lead to a downturn in world trade, and that could easily be more severe than in SARS when the shock was concentrated in East Asia, and this could entail a loss of world GDP of four to five percent of world GDP, which, according to Oxford, would amount to the sort of staggering of figure of $1,500 to $2,000 billion. So, if you thought $800 million was a lot, that was nothing, according to relative low some other estimates which are there.

In addition to these immediate costs of disruption, a serious global flu pandemic could also entail a sizeable loss of potential world output due to illness and death in the world labor force. What the extent of death might actually turn out to be is of course unknown. One study for the US calculated that a mild epidemic similar to that which occurred in 1968 might lead to US losses with a present value of perhaps $100-200 billion in today’s dollars. The Oxford team suggest a rule of thumb that there would be an annual loss of world output of about 0.5% ($200 billion) for every 1% of world population lost in a pandemic. Since this type of loss would persist over the years, its present value would of course be substantially higher.

Going forward, analysts, including the World Bank will be producing more elaborate calculations of economic impacts, using a variety of economic models and drawing on more actual information about the characteristics of the disease, as that becomes available.

There were actually many questions that were similar to this one, so instead of repeating myself and answering all of them one by one, I thought we would just answer one or two questions that cover most of the ground that all of the questions referred to. So, first thing to note is there are huge uncertainties about the dimensions of a future human flu pandemic, so discussions of economic impacts can only be based on very broad assumptions and scenarios of what a pandemic might look like. The SARS epidemic in East Asia in 2003, in fact, does provide some crucial evidence as to the scale of economic effects that can occur. And, in fact, I think all of the estimates of economic impacts that have been done so far use the SARS experience as a starting point.

So again, there were many questions on what governments, international organizations, and the private sectors can do to prevent or respond to the avian and human pandemic influenza threats, and again, I just picked a few questions that I think the answers to which will cover the ground and should satisfy most of the questioners. So, to pick this up, international organizations and governments have, in fact, undertaken several important meetings to discuss preparations and policy responses, and most recently at a conference in Geneva that was cosponsored by the World Health Organization, WHO, the Food Agricultural Organization, Animal Health Organization, OIE, and the World Bank, and some of the key conclusions coming out of the meetings are as follows: First of all, individual countries are central to any coordinated response. Country strategies which are developed and owned by the governments facing the threat of influenza should be the foundation of a global response.

Second, given the close links between animal and human health, these country-level responses need to be based on ever integrated cross-sector type of plans which bring together the many different concerns ministries in countries such as agriculture, animal health, human health, finance, local governments and local communities, and all of this has to occur under strong political leadership from the highest level.

But at the same time, it's clear that the capacities to plan and execute appropriate responses vary considerably among countries. So, third, given the worldwide nature of the problem, there also has to be a strong coordinated response at the global and the regional levels. Bodies such as WHO, FAO, and OIE are the lead technical agencies in the fight. FAO and OIE have prepared a common strategic plan for the control of avian influenza in animals. WHO drafted a strategic plan for individual countries and for the international community to prepare for a human flu pandemic.

The World Bank is providing at this point a package of low-interest loans and grants worth $500 million to help countries undertake the needed preparation, and it's working with donor countries other agencies to leverage additional financial resources of various types.

The Bank also has experience of this multidisciplinary, multisector approaches which are needed in this section, and it can also use its convening power to help bring together the relevant ministries, agencies, and donors, as well as help to foster high-level political coordination. And the Bank could also provide experience and skills in addressing economic and social impacts.

A last general point to make is it's important to strike a balance between short- and long-term measures. The main immediate objective is to reduce the risk to humans by preventing the further spread of avian flu, or by controlling it where it exists, as well as stepping up human pandemic preparedness. This calls for early detection, rapid response and control measures at the animal source, so that the load of the virus in the environment is reduced, and the chance for the virus to undergo genetic changes is minimized.

The longer-term strategy is to minimize the global threat of avian flu through progressive control and eradication of avian flu, together with broader long-term measures to strengthen surveillance, institutional regulatory research, and technical capacity in the animal health, human health, and other relevant sectors, and these are going to be valuable in both the short run and long run.

I think the question by Charles raises a very important point about transparency, the role of transparency in the policy response. There is some evidence that during SARS, the costs arising from panic and disruption tended to be magnified because there was an initial lack of public information in some countries. During the great 1918 pandemic, governments actually tried to hide the truth so as to maintain morale during wartime, although this contributed ultimately to the worldwide spread of the disease and a loss of trust among the public. So, one clear lesson is for governments to establish a track record of credibility through honest, accurate, and timely disclosure of information to their own people and to the outside world. At the level of animal health, investments in disease recording systems are needed, for example, at the level of the farm so that farmers can be trained to recognize avian flu, and so that they could be fairly compensated so they have incentive to report to the authorities. And we also need better reporting systems at the national level so that the official veterinary services are transparent, independent from political pressure and able to report any outbreak in the country to the global surveillance system that is managed by the OIE.

This is a good point raised in this question. There is an important long-term agenda in tackling the influenza problem in terms of strengthening animal and human health systems. These investments will help not only in addressing influenza issues, but also many other diseases, and this should be very consistent with addressing the health and poverty reduction goals of the Millennium Development Goals. And as one of the other participant observes, the present influenza alert is also likely to lead to a much greater global appreciation of the importance of human and animal health conditions in developing countries, not just from a health perspective, but also from an economic and even from a political and security perspective.

Governments in East Asia are, in fact, generally concluding that compensation for farmers has a significant role to play in promoting flu control efforts. A lack of or too little compensation then farmers will have an economic disincentive to apply with culling, killing their flocks. On the other hand, it should be mentioned that governments also need to be wary of paying too much which could actually give farmers an incentive to deliberately infecting their flocks, and that is something that has apparently occurred. But the general point is clear, that compensation is helpful in strengthening flu control efforts.

So, again, there were a number of questions about the role of the private sector in preparing for and operating during a flu pandemic. Certainly, as the key actors in a market economy, the actions of businesses will likely have a significant bearing on how severe the economic impacts of a pandemic turn out to be. And one could mention several issues, although these are probably not the only issues.

First, as we noted, the most immediate and major impact of an epidemic a negative demand shock with sectors such as travel, tourism, and various other kinds of discretionary or luxury spending likely to be hardest hit, especially these sectors. Firms will presumably need to secure adequate financing to survive a severe downturn in demand and cash flow that could last from six months up to two years. Central banks would likely slash interest rates, but on the other hand banks may become much more risk averse in this sort of uncertain environment, and so it would actually be firms with strong balance sheets that would be at an advantage, while on the other hand bankruptcies might surge in the hardest hit sectors, for example, airlines.

So, governments then need to plan for policies that would facilitate corporate restructuring and getting industries relaunched promptly after the crisis for many developing countries. That would mean speeding up reforms of outdated and ineffective bankruptcy law frameworks.

A second point is firms would also need to plan for all sorts of unexpected disruptions in the supply of inputs and the availability of key business services, most obviously business travel. So it would make sense to work with suppliers on planning for how to handle disruptions, to plan for alternative sources of supply, and alternative means of doing business. Using new technology to telecommute and video conference are the best known examples of the kinds of substitutions in business processes that might be needed. Although this is something--that particular example is something that would most likely benefit firms in most advanced economies, as well as large firms, in the modern organized sector of developing economies.

A third point to make is that firms will obviously need to plan for mitigating the impact of the epidemic on their labor force. Policies to minimize the spread of the disease in the workforce will include guidelines for identifying potentially infected workers and requiring them to stay at home, policies to create a more sanitary work environment, which would reduce the probability of infection at work, for example, through regular hand washing, use of disinfectants, avoidance of crowding and so on.

A number of questions about the effectiveness and availability of vaccines and antiviral drugs like Tamiflu. Vaccines effective against pandemic flu virus are not yet available. Vaccines are produced every year for the normal seasonal influenza, but these would not protect against pandemic influenza. Although a vaccine against the H5N1 bird flu virus is under development in several countries, no vaccine is ready for commercial production, and no vaccines are expected to be widely available until several months after the start of a pandemic.

In terms of antiviral drugs, there are two drugs, Oseltamivir, which is known as Tamiflu, and Zanamivir, which is commercially known as Relenza, which can reduce the severity and duration of illness caused by seasonal influenza. Their usefulness depends on their administration within 48 hours of the onset of symptoms. For the cases of human infection with bird flu, there has been some expectation that these drugs may improve prospects for survival if administered early, but clinical data is limited, and there is a good deal of uncertainty as to whether that will, in fact, be the case.

Clearly, even once we have a vaccine and even in the case where antiviral drugs are found to have some effectiveness, supply responses are likely to be inadequate, at least in the short term with respect to the production and stockpiling of antivirals and the development and production of vaccines, in particular for use by developing countries. So, global efforts are needed to address such market failures, and these will likely require public/private partnerships, and should be considered an important longer-term objective. There are also technical questions about the efficacy of different strategies for antiviral use in vaccination, as well as questions how quickly and how best production of antivirals could be ramped up in the short term.

These are all questions where there has been a good deal of new and interesting research and new and interesting policy ideas, and so these are under discussion at the present time as to how we can speed up the process and the availability of vaccines and drugs.

Certainly a good point here, that frequent washing of hands is one of the most effective protective measures people can take, and that's something everybody ought to know and practice.

We can't give specific investment advice here, but clearly given the danger of infection by avian flu, there is a need to improve security, sanitary conditions and general production conditions at all stages in the poultry production and marketing chain over time needs to undertake investments to achieve such improvements in bar security and sanitary conditions.

The ability of a country to prevent and control an avian flu epidemic depends on the quality of its national veterinary services, and yet these have deteriorated in some developing countries in recent decades. So, improving veterinary services is therefore an important part of the current challenge. The Animal Health Organization, OIE, has developed instruments to assist national vet services in carrying out self-evaluation in order to establish their current level of performance, to develop a shared vision with the private sector, to establish priorities and to facilitate strategic planning.

Once the evaluation of vet services and related services had been completed, development partners, including the World Bank, can provide support to strengthen vet services to bring them into line with OIE standards, and such support would include, for example, technical support for strengthening governance and updating legislation, support for unusual and organizational restructuring, support for training of staff, upgrading of priority infrastructure, for example, limited amounts of work, the equipment, material, supplies, technical assistance and so on.

Mass vaccination of poultry is needed when preferred sanitary measures such as culling, disinfection, and control of poultry movements, have not been implemented quickly or strongly enough after the first outbreaks, and those failures have led to a rapid spread of the disease. In that sort of situation, vaccination is then often used precisely to lower the load of the virus and to reduce the risk of genetic changes that could lead to human pandemic influenza.

Restructuring the poultry sector is an important strategy to guard against the damaging effects of avian influenza, but it's also a complicated intervention requiring understanding of the whole socioeconomic system. Moreover, restructuring requires different approaches in different countries by virtue of the differences in their poultry sector infrastructures marketing characteristics, whether they use backyard versus commercial poultry production, and overall socioeconomic impact.

Restructuring should be seen as a gradual process, affecting the various segments of the sector in different ways and different rates. In principle, the main activities to be considered include restructuring of production, compartmentalization and zoning, adjustment to new marketing systems and new transportation systems, new regulations for domestic and international trade in poultry, reassessments of farming systems, introducing segregation of different animal species, restocking supply of poultry breeding stocks, and as I mentioned before, strengthening bio security at producing and marketing sites.

Mr. Mansur also has a question on risk communication strategies, but I discussed that in an answer to an earlier question.

I believe the Web sites of the OIE and the FAO have available maps of avian flu outbreaks and migratory flight paths of wild birds, including very clear food safety guidelines in relation to consumption of bird meat, so I think that may be helpful to the questioner.

The current bird flu does have something of a W-shaped profile, affecting some adult age groups as well as the young and the old. This has raised fears that a human pandemic flu virus might also have a W-profile, as it did in the very deadly pandemic of 1918.

The probability of human flu pandemic is linked to the probability of genetic reassortment of avian flu viruses with human influenza virus, and this, in turn, depends on the quantity of avian flu virus in the environment.

Avian flu is currently endemic several countries in East Asia, and so, if a human flu pandemic were to start, there is a greater probability of it starting in East Asia. However, the bird flu virus could also be carried to another region by wild birds or by illegal trade, leading to genetic reassortment and the start of a human pandemic in some other region. That is also a possibility.

Once a fully contagious human human flu pandemic emerges, its spread is considered inevitable. Countries might, through measures such as border closures and travel restrictions, delay the arrival of the virus, but it's generally considered that they would not be able to stop it.

So, the World Bank is undertaking a more detailed study of economic impacts, looking at potential effect on different regions and economies. In general, there is a presumption that countries that rely more on tourism and that are more open to trade will tend to be harder hit by the negative shock to demand. On the other hand, countries with better developed human and animal health systems would be better able to cope with the supply shocks caused by illness and death.

So, the Asian Development Bank has prepared more detailed macroeconomic estimates for East Asia, which are available on the ADB's Web site. As noted, the World Bank will also be doing a global assessment in a more detailed fashion, which will also include an evaluation of impacts on East Asia, together with other regions. This work should throw more light on the potential pace of recovery after a pandemic.

In addition, we are also considering doing work with multisectoral models which will help develop assessments on the impact on different sectors of the economy.

There were quite a number of questions about potential of avian influenza in Africa, in particular how the region would cope given the generally low level of economic resources and technical capacity in the region. There is a potential risk that the avian flu H5N1 virus might be carried along migration routes of wild birds to Africa. Bird carriers of the avian flu virus could thus reach North and East Africa during any of the upcoming migratory seasons, starting with late 2005 and early 2006. Except for a few commercial farms in North and East Africa capable of implementing bio security measures, most of the production systems found in Africa would be at very high risk. Serious disruption of trade and tourism might also take place. The impact of pandemic human flu, of course, would be far greater. Countries have begun to respond by preparing for epidemic plans in addition to poultry control plans. But given the aforementioned weaknesses in the region, there will obviously be a particularly significant need for international technical and financial assistance in this region.

There were several questions about the Americas. Poultry had, in fact, been the fastest growing segment of the meat industry in Latin America in the past 20 years, and so I suppose it's fortunate there have been no reported cases of avian flu attributed to the H5N1 strain in the bird population of the region. Until now, the region has been largely isolated in terms of migratory routes from areas of the globe where the disease has been identified.

Nevertheless, most Latin American countries have begun preparing for a possible outbreak of avian flu. Poultry commissions around the region have been meeting, and regional authorities have taken some preventive measures, including improved surveillance of poultry farms and monitoring of migratory birds.