SubscribeFlu pandemic could trigger second Great Depression, brokerage warns clients
by HELEN BRANSWELL
TORONTO (CP) - A major Canadian brokerage firm has added its voice to those warning of the potential global impact of an influenza pandemic, suggesting it could trigger a crisis similar to that of the Great Depression.
Real estate values would be slashed, bankruptcies would soar and the insurance industry would be decimated, a newly released investor guide on avian influenza warns clients of BMO Nesbitt Burns.
"It's quite analogous to the Great Depression in many ways, although obviously caused by very different reasons," co-author Sherry Cooper, chief economist of the firm and executive vice-president of the BMO Financial Group, said in an interview Tuesday.
"We won't have 30-per-cent unemployment because frankly, many people will die. And there will be excess demand for labour and yet, at the same time, it will absolutely crunch the economy worldwide."
A leading voice for pandemic preparedness said the report is evidence the financial and business sectors - which have been slow to twig to the implications of a flu pandemic - are finally realizing why public health and infectious disease experts have been sounding the alarm.
"I think that this particular report really signifies the first time that anyone from within the financial world, when looking at this issue, kind of had one of those 'Oh my God' moments," said Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota...
Cooper, a highly influential figure in the Canadian financial sector, wrote the report with Donald Coxe, a global portfolio strategist for BMO Financial Group.
They warn investors the economic fallout out of a pandemic would inflict pain across sectors and around the globe.
Airlines would be grounded, transport of goods would cease, the tourism and hospitality sectors would evaporate and the impact on exports would be devastating, Cooper wrote...
Even if a pandemic were mild, it is estimated that about a third of the world's population would fall sick over a period of months and millions would die. If the strain is virulent, the toll could mount to scores of millions of deaths, over a period of only 18 to 24 months.
Cooper reminded investors of the economic devastation SARS wreaked on affected cities or countries, including Toronto. But even with that fresh experience to draw from, she admitted it was hard to envisage how widespread the implications of a flu pandemic might be...
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posted by pwb503 at 1:20 PM on March 14, 2006