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ICG Risk Blog - [ Using SARS to predict H5N1 Avian Flu impacts on regional & global supply chains, Part 2 ]

Using SARS to predict H5N1 Avian Flu impacts on regional & global supply chains, Part 2


Part 1

Host nation (PRC and HK) "Public" or core event hierarchy:

  • Restaurant activity
  • Public small to medium group activities
  • Mass transit
  • Tourism revenue
  • Airline revenue
  • Service industries (restaurants, hotels, airlines, cinemas, and theaters)
  • Host nation quarantine commences
  • Service industries suppliers (air navigation services, wholesalers, food providers)
  • Discretionary products (notably luxury goods)
  • Global airport sales of all items
  • Foreign (offshore) quarantine rises
  • Host nation quarantine methods increase in intensity
  • Host nation (PRC) mismanagement of news/story continues
  • 'Phonecam nation' collects and provides data about virus spread to unofficial databases beyond government control
  • Asian markets/indices
  • Trade fairs and commercial events
  • Manufacturing transportation (truck, ship, air)
  • Healthcare response and availability (including health providers)
  • Light industrial orders (new business replenishment)
  • Light industry investment
  • Financial services companies (commercial banks, investment banks, and brokerages)
  • Financial services staff relocations
  • Expatriate employee recalls/returns
  • Host nation admission of prior news management, relative, but transitory, transparency
  • Military mobilization to support containment
  • Draconian mandatory healthcare incarceration
  • Increasing toll on available healthcare providers
  • Tideside/port impacts
  • Heavy industrial orders (new business replenishment) (Plants in this segment were more isolated)
  • Heavy industry investment
  • Regional economic contraction (Hong Kong, Singaporean and Taiwanese economies had begun shrinking; Malaysian and Thai economies slowed with expectation of shrinking; PRC's industrial expansion slowed)

SARS' modest transmission rates allow relative containment, interrupting the event hierarchy:

  • Global economic integration (notably outsourcing to low cost producers and related SG&A procurement, tracking, and IT activities)
  • Global supply chain interruptions
  • Overwhelmed health system
  • Civil unrest
  • Martial law
  • Rural and urban migration
  • Regional economic collapse

"Post-event" hierarchy:

  • WHO certifies global hotspots as free from contagion
  • New case/suspected case disclosure cause minor economic ripples
  • Economic activity recovers
  • Host nation acknowledgment of news suppression to 'prevent' immediate/local impacts to revenue, trade, tourism, and bureaucrat reputations
  • Promise of future immediate transparency and cooperation
  • Recidivism commences
  • Host nation punishment of "whistle blower" citizens

A bit of light humor. As thieves will always prosper in troubled times, LVMH Mo√ęt Hennessy Louis Vuitton was upset by photos showing Hong Kong residents wearing SARS masks bearing counterfeit Louis Vuitton logos.

An Avian Flu pandemic will not allow time for humor.

Gordon Housworth

InfoT Public  Infrastructure Defense Public  Risk Containment and Pricing Public  Strategic Risk Public  


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