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Severe acute respiratory syndrome (SARS) is affecting the East Asian countries tremendously and it could have very devastating effects on many small countries such as Hong Kong.

The U.S. Federal Reserve cited SARS as a factor holding back an ailing U.S. economy by cutting into tourism in some regions of the country. San Francisco has seen the biggest effects as travel and tourism decline due to the outbreak. The heavily beaten airline industry is especially hard hit.

Employment and production could be hindered because of SARS. The impact of SARS could grow if companies quarantine workers traveling to or from affected countries. Companies that have dealings in any of the countries affected by SARS are basically in a lose-lose situation. If they decide to postpone travel, they could lose valuable business. Without these transactions companies may be forced to cut payrolls.(see U.S Federal Reserve)

U.S. factories could also cut jobs if parts and other supplies are no longer purchased from companies in SARS affected countries.(see U.S Federal Reserve) The countries that were most affected by SARS are China, Canada, Singapore, Vietnam, and Taiwan, according to the World Health Organization. SARS is already seen as impacting global trade and analytical figures suggest that growth of two to three percent could be held back because of this.

Nobody can predict what will happen with SARS. In the worst case perhaps 250 million deaths worldwide could happen. If the disease continues unabated, there could be a permanent shift in supply chains away from Southern China and Hong Kong.

Works Cited

Steiner, Jerry. (2003 April, 24). "SARS and the Economy." CNN.com. http://www.cnn.com/business/SARS.html

Tufte, David. (2003 April, 23). "Econ. 3020 Interesting Links." http://www.suu.edu/faculty/Tufte/Econ3020.

U.S Federal Reserve.com. (2003 April, 23). "U.S Economy starts to feel effects of SARS."

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Copyright, Dusty Roche, 2003.