.
Since first entering the country last month, MERS (middle east respiratory syndrome) has infected more than 150 people in South Korea. Individuals in and surrounding the nation fear for their health in the midst of a dwindling economy. South Koreans are staying home, tourists are avoiding the region, and the private sector is doubting South Korea’s economic viability. The nation seemingly views the outbreak as a second-coming of the SARS (severe acute respiratory syndrome) epidemic that depressed Asia’s economy 12 years ago.
Aiming to shield children from MERS, the South Korean government closed more than 2,000 schools in early June. Following encouragement from the World Health Organization, schools are re-opening, but South Koreans of all ages continue staying home and consumers remain inactive. South Korea’s economy is declining because individuals are not visiting restaurants, enjoying movies, or shopping. According to the Ministry of Strategy and Finance, department store sales declined 16.5 percent and retail shop sales deteriorated 3.4 percent in comparison to last year. Potential tourists and South Korean natives are not contributing to the economy because they fear extended time in South Korea’s public spaces could result in contracting MERS.
Businesses join one of many entities struggling financially since the outbreak. Already, more than 100,000 people have cancelled trips to South Korea, resulting in a plagued tourism sector. Decreased tourism staggers South Korea’s economy because the tourism industry provides more than 1.6 million jobs and composes 5.8 percent of South Korea’s GDP. As such, South Korea’s efforts to educate their population about MERS unintentionally instilled global fear that now impairs their economy.
Members of the private sector, responding to government warnings, predicted economic loss would ensue from the MERS outbreak and responsively decreased their 2015 growth forecasts. Goldman Sachs cut their forecast for South Korea to 2.8 percent from 3.3 percent. Additionally, the Bank of Korea reduced its key rate to a historic 1.5 percent and publicly declared the virus a forthcoming deterrent to consumption. This exhibits fear and lost faith within the private sector in response to the MERS outbreak.
As businesses’ profits dwindle and the economy stagnates, South Korea’s government faces attacks for over-reacting to the MERS outbreak. Although MERS and SARS are similar, MERS is significantly less transmittable than SARS, which infected 8,000 people and killed 774 globally. Nonetheless, South Korea’s government remains vigilant at the cost of their economy but in defense of their people’s health.
The views presented in this article are the author’s own and do not necessarily represent the views of any other organization.
a global affairs media network
South Korea's Economic Plague
June 24, 2015
Since first entering the country last month, MERS (middle east respiratory syndrome) has infected more than 150 people in South Korea. Individuals in and surrounding the nation fear for their health in the midst of a dwindling economy. South Koreans are staying home, tourists are avoiding the region, and the private sector is doubting South Korea’s economic viability. The nation seemingly views the outbreak as a second-coming of the SARS (severe acute respiratory syndrome) epidemic that depressed Asia’s economy 12 years ago.
Aiming to shield children from MERS, the South Korean government closed more than 2,000 schools in early June. Following encouragement from the World Health Organization, schools are re-opening, but South Koreans of all ages continue staying home and consumers remain inactive. South Korea’s economy is declining because individuals are not visiting restaurants, enjoying movies, or shopping. According to the Ministry of Strategy and Finance, department store sales declined 16.5 percent and retail shop sales deteriorated 3.4 percent in comparison to last year. Potential tourists and South Korean natives are not contributing to the economy because they fear extended time in South Korea’s public spaces could result in contracting MERS.
Businesses join one of many entities struggling financially since the outbreak. Already, more than 100,000 people have cancelled trips to South Korea, resulting in a plagued tourism sector. Decreased tourism staggers South Korea’s economy because the tourism industry provides more than 1.6 million jobs and composes 5.8 percent of South Korea’s GDP. As such, South Korea’s efforts to educate their population about MERS unintentionally instilled global fear that now impairs their economy.
Members of the private sector, responding to government warnings, predicted economic loss would ensue from the MERS outbreak and responsively decreased their 2015 growth forecasts. Goldman Sachs cut their forecast for South Korea to 2.8 percent from 3.3 percent. Additionally, the Bank of Korea reduced its key rate to a historic 1.5 percent and publicly declared the virus a forthcoming deterrent to consumption. This exhibits fear and lost faith within the private sector in response to the MERS outbreak.
As businesses’ profits dwindle and the economy stagnates, South Korea’s government faces attacks for over-reacting to the MERS outbreak. Although MERS and SARS are similar, MERS is significantly less transmittable than SARS, which infected 8,000 people and killed 774 globally. Nonetheless, South Korea’s government remains vigilant at the cost of their economy but in defense of their people’s health.
The views presented in this article are the author’s own and do not necessarily represent the views of any other organization.
