How can global economies survive the next pandemic?

The COVID-19 outbreak has altered the world as we know it, redirecting the future of all aspects of society from culture to education, from government to industry. As of early May, there are more than 3.6 million infections in 187 countries, including 260,000 deaths. To say that the pandemic has a major impact on the economy and global exchange of goods is an understatement.

The World Health Organization and governments are now racing to develop vaccines and antivirals to fight the disease. Once the pandemic is controlled, the task of rebuilding and redesigning industrial networks is needed to better withstand future outbreaks.

DLSU School of Economics Associate Professor Dr. Krista Danielle Yu and Chemical Engineering Full Professor Dr. Kathleen Aviso offer new insights in their peer-reviewed and indexed research work on the pandemic, one of the country’s first COVID-related studies. Their paper, titled “Modeling the Economic Impact and Ripple Effects of Disease Outbreaks,” provides a roadmap on how to evaluate the vulnerability that cascades through the supply chain due to a disease outbreak at the company level, national level, and global scale.

Though the pandemic is a recent event, the researchers have been doing work in the field for almost a decade. In 2012, through the DOST Balik Scientist Program, DLSU hosted Dr. Joost Santos, who is the key proponent of the model. Back then, Yu and Aviso had already started discussing the possibility of pandemics, as Dr. Santos was studying the influenza outbreaks in the United States.

With the help of mathematics, the researchers were able to integrate their respective studies in economics and chemical engineering. The input-output model which is the fundamental framework used by Yu to track the monetary flow of transactions in an economy can also be utilized in the physical flow of materials and resources in process systems as implemented by Aviso.

Their study reveals that systems are interdependent and optimization techniques should be utilized to achieve maximum returns and minimize risks when designing policy strategies. They stress the importance of having a more holistic perspective when developing policies to ensure that they create the most impact.

They point out in their paper that “it is imperative to develop frameworks that will account for interactions across states, countries, and regions which provide timely approximations, with appropriate disclaimers on precision, for emergency decision- making.”

Furthermore, the authors recommend the use of current economic modelling techniques to develop optimization models and harness big data to better facilitate policy-making.

Aside from this study, Yu and Aviso have several related works in the pipeline, including a paper that will accommodate workforce measures to fit their sector criticality index for post-pandemic key sector prioritization. They are currently working with a grant from the Global Challenges Research Fund, which is part of a UK block funding redirected to focus on COVID-related research. Their research is conducted in collaboration with colleagues from Heriot Watt University – Malaysia Campus, University of Nottingham in Malaysia, and George Washington University in the United States, with Dr. Viknesh Andiappan of Heriot Watt University – Malaysia Campus as the project’s principal investigator.

Forging ahead despite the uncertainties of the future, Yu and Aviso seek to develop more tools for assessing the impact of the pandemic on the economy and to develop potential exit strategies that can be implemented as communities transition from the lockdown.

Contact:

Dr. Kathleen Aviso
[email protected]

Dr. Krista Danielle Yu
[email protected]