COVID-19 and SARS: An Epidemiological and Economic Comparison

SARS emerged in November 2002 and infected individuals across 26 countries around the world during the course of several months. Like COVID-19, it appears to have originated from animal markets. The SARS virus was contained relatively rapidly, ultimately infecting around 8,500 people with a mortality rate of around 10%. As mentioned above, the preliminary evidence seems to suggest that the COVID-19 mortality rate is much lower than SARS though it has managed to spread further and infect more people (see Figure 1). This is partly because there are a lot of mild or asymptomatic infections of COVID-19, so that the sick cannot be identified as rapidly and isolated. In these cases, carriers continue to spread the virus, not aware they are infected. Some estimates suggest there might be tens of thousands of carriers like that.

Figure 1: The SARS and COVID-19 Infection and Death Numbers Compared

SARS = Severe Acute Respiratory Syndrome.
Source: ADB calculations using data from CEIC and World Health Organization (accessed 17 April 2020).

The SARS outbreak did not lead to any long-lasting damage to public health, except of course to the families of those who died. Affected national health systems actually learned from the experience and improved their response capacity. This is in contrast to MERS, which appears to be entrenched and re-emerges in new clusters of infections (fortunately, it is less infectious). It is not yet clear whether COVID-19 will end up like SARS (with no long-term impact on health expenditures) or MERS (some need for long-term spending on prevention and treatments) or become a recurring epidemic, and what will be the interactions between the public health prevention efforts targeting the seasonal flu and COVID-19.

Lastly, one big epidemiological difference between COVID-19 and SARS is that while SARS spread primarily in the PRC, COVID-19 has reached all corners of the world. By late March 2020, the US had the largest number of cases, while the disease showed signs of receding in the PRC. Other countries that suffered large outbreaks included France, Germany, Iran, Italy, the Republic of Korea, Spain, Switzerland, the United Kingdom, and caseloads have been on the rise in Japan and in most developing countries worldwide, where testing is substantially less widespread.  The difference is partly due to the highly infectious nature of COVID-19 and partly due to closer links between countries.  COVID-19 has not yet run its full course and its future epidemiological trajectory is highly uncertain. What is certain is that it is exacting a far heavier toll on global public health than its earlier coronavirus cousin SARS.

SARS was contained relatively rapidly, but the epidemic caused very significant economic losses.  These economic costs did not stem from the 8,500 people who were directly infected. The economic effect of SARS occurred by changing the behavior of hundreds of millions of individuals who sought to avoid becoming infected by the virus, and by corporations and governments who implemented various changes to their operations by instituting travel bans for example. People changed their daily routine, such as staying home rather than going out to restaurants and shopping malls. These changes ended up causing much of the economic dislocation.

COVID-19 poses an incomparably larger risk to global public health and world economy. Though less deadly than SARS, COVID-19 has infected almost the entire world whereas SARS was largely confined to the PRC and a few other hotspots. The number of COVID-19 confirmed cases and fatalities are of an altogether different magnitude than the figures for SARS.

Nevertheless, some lessons from SARS remain valid for COVID-19. While news headlines are dominated by the number of new cases and fatalities, as was the case with SARS, the economic impact of COVID-19 does not directly stem from those who are infected. Instead, they stem from the containment policies that governments put in place to contain the disease, in particular community quarantines and travel bans, as well as precautionary behavior of individuals. All of these will be amplified many times over since COVID-19 is a much bigger epidemic than SARS, implying much larger overall economic damage.

There are four main channels through which COVID-19 will affect economies in Asia and beyond. First and foremost, the service sector, in particular the leisure, hospitality, and retail industries, is hit very hard as people stay home. Domestic tourism also suffers. Second, worldwide travel bans exact a heavy toll on international tourism. Countries that attract a lot of foreign tourists, such as Maldives, Palau, and Thailand, take a bigger blow, but the effect on tourism will reverberate globally. Third, COVID-19 disrupts global supply chains and thus manufacturing sectors. This is especially important for Asia, where countries form a regional production network—i.e. Factory Asia—anchored around the PRC. Fourth, the draconian containment policies may induce credit defaults by businesses and households, causing financial sector distress and even a financial crisis. 

Furthermore, if the disease persists for an extended period, as is currently widely expected, other long-term effects will kick in. The heavy burden of taking care of COVID-19 patients may compromise the capacity of hospitals to provide adequate care for other patients, thereby harming the overall health of the population. The COVID-19 crisis may have other long-term effects on the world economy. For example, the crisis may accelerate trends toward self-sufficiency and away from free trade. Heavy dependence on imports of medical supplies and other personal protective equipment (PPE)—especially those needed for COVID-19, such as masks and ventilators—may be used by some to advocate economic nationalism and protectionism.

Fear, propagated and amplified by social media, exacerbates the economic damage from COVID-19. Panic today travels much more widely and deeply because of social media, which was much less developed during SARS. Social media has allowed for the propagation of many myths about COVID-19—e.g. drinking water can flush coronavirus from your system or young people cannot get infected—that can potentially undermine efficient public response to crises.

At the same time, social media and more broadly information and communication technology (ICT) can also mitigate the negative effects of COVID-19. Social media is being used to alert millions of residents to community quarantines, curfews, and other relevant information. And, work-from-home arrangements adopted by companies would simply not have been possible without ICT. Online shopping substitutes for trips to the mall and distance learning substitutes for classroom lectures.

Forceful fiscal and monetary policy response of governments are reducing the negative impact and preparing the ground for a quicker and more complete recovery.^[2] 

Finally, while COVID-19 is a once-in-a-lifetime global crisis, if society and government work closely together to fight COVID-19, there is every chance of defeating the disease and reviving the economy. One prominent example is government-mandated community quarantines and social distancing restrictions. They are proving to be effective in containing the coronavirus in many countries, especially if the public adheres to them and stay home.

T.W. Russel et al. 2020. Estimating the Infection and Case Fatality Ratio for COVID-19 Using Age-Adjusted Data from the Outbreak on the Diamond Princess Cruise Ship. Eurosurveillance. 25 (12).

World Health Organization. Coronavirus disease (COVID-19) Pandemic.