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Saturday, November 05, 2005

Bird Flu Economy

The Asian Development Bank (ADB) estimated that the reign bird flu could potentially become an outbreak and creates the following problems:

1. Three ("3") million Asians may die.
2. $283 billion in damage to Asian economies.
3. Global recession.

Aiks.. this is kind of scary to learn about.

Referring to the original article, the following are damages in money sense for Asia.

1. Demand shock of around $99 billion in 2006 GDP where "psychological impact on demand in Asia only for six months followed by 18 months of milder contraction"
2. Reduction in consumers and investors activities amounting to $283 billion where "12 months of damage to global demand followed by 12 months of smaller shocks"

Thus, we take it that Asian economy would suffer a contraction of $99 + $ 283 billion by 2006 with effects lasting up to another 18 months. and based on the "zero sum" theory, does this means that the world has excessive cash of $99 + $ 283 billion ? Not sure about this, because people would be losing jobs and eventually cash would not be accumulated at the hands of consumers. So who would be having the money then? is it banks and other monetory organizations such as World Bank, Asian Development Bank, Islamic Development and etc.

However, with effects lasting up to 18 months, what opportunities could be there for us to manifest ?

1. Online sales of book. Especially those related to health,psychology and religion.
2. Online Insurance
3. Online entertaintment.
4. Online tourism (not so much actually)
5. Online yoga.
6. Online medicine (air purifier, health supplement and mask)
7. Online whatever..

Courier, telecommunication and internet service provider would be experiencing surplus in terms of business for these 18 months.

If the bird flu is going to put a big halt to tourism, the probably it will do good to the petroluem prices too. Demand for fuel would be cut down to a certain extend when business travelling, tourism and freight services are caught at red light.

4 comments:

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Brandon Teoh said...

Flu pandemic could hurt US economy