The Hindu : SARS affects growth projections in Asia

Online edition of India's National Newspaper
Friday, Apr 25, 2003

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SARS affects growth projections in Asia

By Our Special Correspondent

NEW DELHI APRIL 24. The outbreak of SARS in the South-Asian region has led to widespread lowering of growth projections in the affected countries which otherwise form the fastest growing region of the world and has been described as an area which had basically been keeping the global economy afloat.

Data complied by the Federation of Indian Chambers of Commerce and Industry here has revealed that international financial organisations have estimated that the largest decline in growth projections has been in the case of Singapore where growth rates are expected to fall by 1.5 to 2.5 per cent. Malaysia's growth rate is also expected to fall by 0.9 per cent while Hong Kong is estimated to witness a 0.6 per cent decline in growth rates in 2003. However, China, which has the largest number of SARS cases, the gross domestic product (GDP) is expected to fall about 0.5 per cent and the country's growth rate could be around 6.5 per cent.

The sectoral impacts have been even more severe, according to the report. Already hit by the Iraq war, international airlines have been doubly hit because of the SARS outbreak with business travellers turning to e-mail and videophones rather than making business trips. The Japanese airlines, ANA has reported that passenger traffic between Tokyo and Hong Kong fell by a fifth after the disease was identified and visitor arrivals in Hong Kong and Singapore have reportedly collapsed by around 61 per cent.

Singapore Airlines recently announced that it has effectively grounded 13.5 per cent of all its flights while Hong Kong-based Cathay Pacific has indicated that it may need to ground its whole fleet next month.

Tourism too has been badly hit whereas this sector contributed significantly to the GDP of the South-Asian countries. Singapore, for instance, has a 10 per cent contribution from tourism to its GDP and has decided to implement a $230 million package to provide immediate relief for the most directly and adversely hit tourism and transport-related sectors.

Similarly, Malaysia, which has a seven per cent contribution from tourism which is also its second largest foreign exchange earner, is expected to lose around RM 200 million per month in terms of tourism revenue. The fall in tourism arrivals in the South-Asian countries also has its ripple effect on retail trade and other services.

The Federation report has suggested that collective efforts be undertaken by the affected countries to check the spread of the disease by undertaking joint scientific and laboratory exercises and increase surveillance and threat detection networks.

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