Ebola crushes West Africa’s economies – Swedish Radio

Ebola crushes West Africa's economies – Swedish Radio

The economic consequences for the Ebola-affected countries in West Africa may be worse than previously thought. It says Rikard Forslid, Professor of Economics at Stockholm University.

– The latest forecast, which came a few days ago, is infinitely worse than the one that came in October. Still had the same basis as before. We tend to greatly underestimate what is happening in the economy.

The latest report from the World Bank shows dismal figures for countries that already belong to the world’s poorest. For example, Sierra Leone yesterday, according to the forecast, from a growth of six percent last year to a negative growth of two per cent next year. And it’s not just because of the large mining companies leave the country. At least as serious is that everyday commerce has halted almost completely.

– Much business is stopped and the markets closed. Private entrepreneurs sees its market completely disappear. It is often women who engage in import and export and sell in markets. All this has disastrous effects on the economy.

Richard Forslid think new World Bank dismal figures also may prove overly optimistic.

– We have a tendency to greatly underestimate some of the effects. What happens when a country or a region gets stigmatized? There is nothing that has standard models. This is a test case of what happens.

Also important social functions are severely affected by Ebola outbreak. The doctor Helena Nordenstedt just got back from Liberia, where she worked for Doctors Without Borders.

– Ebola is so dangerous because it has a crippling effect on society at large. The schools are closed. The rest of the healthcare shut down, because you can not risk a hundred patients have Ebola. Then you risk his staff and other patients. The rest of society is on its knees, simply.

It’s like a state of emergency where everything is to combat ebolan, while the rest of life will have to wait.

It is only when ebolan is extinct as the economy can start to pick up again, according to economist Richard Forslid. And then needed international support.

– The international community must make a gradual exit, and not just stick when the infection is over but ensure that everything works, and help. It will take a few years before you are back on the growth path. That is, it will still belong to the world’s poorest countries, but one begins to grow again.

Frederick Sperling
fredrik.sperling@sverigesradio.se