News Analysis: World Bank warns 'catastrophic' impact due to Ebola scare

The three countries, Guinea, Liberia and Sierra Leone, would lose as much as 809 million U.S. dollars by 2015 if control of the epidemic is delayed. Expert said fear is a fundamental driver to the economic impact, it is crucial for governments to be able to effectively signal to their population that there are treatment options and that the epidemic is coming under control. Phillip Jeremy Hay, the Head of Communications of World Bank for African Region, said in a recent interview with Xinhua that most of this economic impact comes not through the actual deaths, sickness, and care giving, deeply tragic though those are. Rather it comes through the fear factor, Hay said, "people are afraid to keep their businesses open, they are afraid to go to work, they're afraid to fly to the countries; they're afraid to let people from the affected countries leave and sell their goods. " He added this results in an "economic quarantine" of sorts for these affected countries, and it has an enormous economic impact. African Union(AU) called for earlier this month travel restrictions to member states affected by Ebola virus to be lifted as the move is damaging the continent's economy, Xinhua informs.

"Member states should lift all travel bans...to open up economic activities," AU commission chief Nkosazana Dlamini-Zuma told reporters at an emergency meeting of the bloc in the Ethiopian capital Addis Ababa.

But she said "proper screening mechanisms must be put in place".

According to the World Bank, the economies of Guinea, Liberia and Sierra Leone will lose 359 million dollars this year, and if the three countries and their partners don't immediately ramp up efforts to contain the disease outbreak. Estimates of the impact on the three countries for 2015 range from 97 million dollars (if the epidemic is rapidly contained) to 809 million dollars (if control of the epidemic is delayed). The Bank further said closed borders and abandoned farms are driving up food costs and leaving many people in rural communities hungry. Emergency spending on health services is drawing money from already cash-strapped government budgets. The epidemic could reverse years of economic gains made by countries in this developing part of the world. Hay said the Bank indeed observes potentially catastrophic impacts on the three directly affected economies. This means that these countries are significantly poorer than they would have been in the absence of Ebola. The impact on Africa really depends on the reaction over the next few months, he said. According to Hay, these three economies are not a large part of the West Africa output, and much less than Africa as a whole. If the governments and their partners can effectively stem the tide of the epidemic, there will still be a likely impact on West Africa, but the impact could be truly devastating if the epidemic is not brought under control.

"The World Bank is still working on its regional calculations, but the impact for West Africa could easily number in the billions of dollars," he said. Hay urged the international community and the governments of the affected countries to convey clear message to people that they are able to bring the epidemic under control, "then people are much more willing to return to their normal economic activities of production, trade, and improving their lives through their efforts. "The World Bank's report warned that so far neighboring countries have had limited economic impacts as a result of the epidemic, but that could change if measures are not taken to quickly contain the disease and prevent its spill-over. The World Trade Organization said in a report on Tuesday growth of global goods trade will slow to 3.1 percent from 4.6 percent predicted in April for this year, and to 4 percent from 5.3 percent for 2015, because of factors including regional conflicts and the Ebola outbreak.