Bird flu may cost Vietnam 1.8% of GDP

Bird flu may cost Vietnam 1.8% of GDP

Agence France-Presse Hanoi

The World Bank said on Tuesday the culling of all Vietnam's poultry to contain its bird flu outbreak could cost 1.8 percent of gross domestic product or US$690 million in economic losses.

This, the bank said, was the worst case scenario for the communist nation, which is struggling to contain further transmission of the disease.

So far, around 37.5 million birds out of Vietnam's total estimated poultry population of 250 million have died or been culled since late December.

"The impact, therefore, will vary considerably depending on whether the epidemic can be contained at an early stage or requires the culling of all poultry and seriously disrupts international arrivals," the World Bank said.

In its most optimistic forecast in which the epidemic recedes rapidly without requiring a mass cull of birds and without affecting tourist arrivals, the cost to economy is estimated at 0.15 percent of GDP or $58 million.

In the bank's second scenario, the epidemic is contained relatively quickly with an output loss in the poultry sector equal to three months of economic activity.

This, together with a five percent fall in international tourism arrivals, would amount to 0.6 percent of GDP, it said.

Its third scenario factored in a six-month loss of output from poultry and the negative impact of a decline in arrivals comparable to the one prompted by the outbreak of Severe Acute Respiratory Syndrome (SARS) last year.

In this scenario, the cost to the economy is estimated at 0.9 percent of GDP.

Klaus Rohland, the World Bank's director in Vietnam, said the gap between the costs under the different scenarios demanded "decisive actions".

"It also appears that this epidemic could affect the poor more than SARS did," he said in a statement.

"So, measures such as appropriate compensation policies for bird culling and re-stocking of farms are important to mitigate the social impact of the epidemic."

Rohland also urged the government to strengthen its veterinary services and improve its surveillance system to quickly control any future outbreaks.

In human terms, Vietnam is the worst affected of the 10 Asian countries tackling bird flu. Fourteen people have died from the virulent H5N1 strain of the disease out of 21 confirmed human infections.