In the thick of the Ebola crisis, alarming predictions flowed weekly from institutions like the Centers for Disease Control and Prevention and the World Bank: Up to 1.4 million people infected. Fatality rates of 90 percent. Economic losses of $32.6 billion. Now, with infections lingering in Sierra Leone and ending in Liberia, estimates formerly described as “a warning and a call to action” are worth re-evaluating. “Misleading reports, speculation and poor projections from international agencies, government ministries and the media about the Ebola outbreak exacerbated the problem,” a January New York Times op-ed declared.
The op-ed alleges that false or exaggerated data have had harmful consequences on the outbreak’s spread. “The dramatic reports … accentuated the negative, undermined confidence, made it harder to encourage people to seek care, and misdirected attention,” the researchers write, further alleging that indirect economic impacts have impacted informal sector workers particularly. But the connection between fear-mongering and affects in West Africa is not so simple.
“Those estimates were sort of a double-edged sword from an economic perspective,” says Harvard business school professor Eric D. Werker, who is also involved in projecting economic impact in West Africa. He says such calamitous predictions are intended to engage international donors in relief efforts.
Although the projections were used to establish government-imposed closures, everyday people may have soldiered on without considering them closely.
But they also influence people in the affected areas to stop doing business, worsening the impact of the crisis in a different way. “Ebola spreads when people come in contact with each other,” Werker says. “That also happens to be how the economy works.” Governments restricted the geographic spread of the epidemic by imposing curfews and broad cordons sanitaires on affected areas. Reducing the casual contact necessary for marketplaces, offices, and transportation systems to function left workers—most notably, the self-employed, informal workers who make up a large portion of West African economies—with reduced income and job loss.
Consumer confidence flags in the face of harsh economic predictions, too, like the ones government ministers and World Bank economists promulgated during the crisis. “When the future is uncertain people cut back on small luxuries like purchasing snacks on the street or having their hair done,” researcher Rachel Glennerster and her co-authors wrote in the Times op-ed. This, too, disproportionately impacts informal workers: “These discretionary purchases are the mainstay of the non-farm enterprise sector.”
Although the estimates were clearly false, household surveys in Sierra Leone and Liberia by Innovations for Poverty Action, the World Bank, and other groups have documented grave impacts on workers. A survey found that 64 percent of self-employed workers in Liberia were no longer working as of November 2014, up from 57 percent a month before. While 20 percent of the unemployed had returned to work by late February, the remaining unemployed represent a huge portion of the economy.
Even in areas where Ebola has waned, the downturn is far from over. Nationally, both Guinea and Sierra Leone are on track to experience economic contractions in 2015, and informal workers will remain highly vulnerable. In Liberia, agricultural harvesting was delayed by an inability to assemble work crews, imperiling farmers’ yearly income. In Sierra Leone, the total number of rice traders has plunged up to 69 percent in cordoned districts. BRAC, a large NGO that provides micro-lending in the region, says about one-third of borrowers have experienced downturns—and the organization is loath to offer new loans until consumer confidence rebounds. Both they and the World Bank express concern that informal workers have been forced to use working capital for consumption (for example, by using sales profits to fund household purchases, rather than re-investing in items to sell) during the worst of the epidemic.
But if the economic impacts of Ebola are clear, their origin in false or exaggerated predictions is hard to confirm.
To begin, the op-ed authors don’t document if people in West Africa were relying on projections of disease spread to make economic decisions. Although the projections were used to establish government-imposed closures, everyday people may have soldiered on without considering them closely. “The extent to which those parties are going to downward-adjust their likelihood of doing business in that country is not, I would say, all that high,” Werker says, referring to both locals and foreign investors. “To some extent, you’re going to have people who are in the economy and are making judgments based on their own knowledge of the situation, as opposed to what the latest estimates said.”
Glennerster admits it is impossible to disambiguate the portion of economic losses caused by necessary preventive measures from the percentage caused solely by excessive fear-mongering. David Evans, a World Bank economist, agrees that quantifying the two separate causes of downturn is impossible.
Still, Evans explains why the World Bank’s parallel estimates were necessary: The “low Ebola” scenario showed if cases were held to 20,000, there would be a projected economic loss of $3.8 billion over the next two years. The “high Ebola” option showed that if cases spread unfettered, losses could reach $32.8 billion. “It’s true that the low Ebola was not the focus of the media coverage,” Evans says. But, he adds, “there’s a value in us understanding how things can evolve in the absence of action. So I don’t think that the focus on the high Ebola estimates in the media was necessarily a bad thing.”
Werker concurs: “The numbers might have been helpful in mobilizing the scale of resources necessary to halt the progress of the epidemic.” Because the attention has led to health care innovations that include better care, vaccine development, and new hospital construction, the net impact of exaggerations is hard to pinpoint.
Per the CDC, total cases are now 24,247, a bit above the “low Ebola” limit. The World Bank’s current projected loss is between $1.6 and $6.2 billion. Beyond that, Evans says, “Until we get to zero cases, it’s very difficult to predict those health impacts and the economic impacts and how those will evolve.”
And while the World Bank has announced a program for “helping people get back to work.”
Glennerster highlights the need for attention on the informal sector. “People advocate for their own sector, and there isn’t anyone advocating for the informal sector,” she says. “You can distract attention from where the worst problems are.”
