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The Effect Of Severe Acute Respiratory Syndrome


            At this very time, a new disease is spreading in places throughout the world causing fear everywhere it is reported. Severe Acute Respiratory Syndrome (SARS) has killed 260 people as of April 25th, 2003. Most of the infections and subsequent deaths have occurred in Asia, and China more specifically. Tourism has been on a downfall in recent years especially since the September 11 attacks in NY and DC. The SARS disease currently has a death rate of six percent.
             Meanwhile, in Portland, Oregon, the offices of Nike's headquarters are staying on later. Nike has cut it's business trips to Asia by more than half in the wake of the SARS outbreak. More than 300,000 people in Asia work for Nike producing more than 4/5ths of the company's products.
             The World Health Organization (WHO) believes that this new disease has the potential to reach epidemic severity. This scares not only people who live in high risk areas, but corporations worldwide. Nike is making plans for just such an occasion. If the disease is not brought under control in the next 12 months, Nike plans to move much of it's manufacturing outside of Asia, probably to Latin America. Nike is not the only company who is considering such options. Many industries rely on Asia for manufacturing, from clothing to toys, to microchips.
             SARS effect on Asia's travel and tourism industries has been dramatic. Between 40% and 45% of daily flights into Hong Kong have been cancelled. Airline Cathay Pacific is losing $3m per day. Singapore Airlines asked all of its 6,600 cabin crew members to take unpaid leave. Their capacity is only 29% of normal levels. Tourist arrivals in Singapore are down by more than 66%. The economic effects of SARS were demonstrated recently at the Canton Trade Fair in Guangzhou. The export trade fair was located near the origin of the outbreak and was declared by the WHO to be an area of high risk. Two technology trade fairs were cancelled because of delegates' SARS fears.


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