“THE only thing we have to fear is fear itself” . . . so said Franklin D Roosevelt in his inauguration speech as 32nd President of the United States.
He was speaking in relation to the Great Depression and the impact it had on the US economy and its citizens. Today there are those who would apply a similar phrase in relation to the outbreak of coronavirus - “the only thing to panic about is panic itself”.
But should the business world panic? Or if not panic, at least be concerned?
Even as world leaders move to calm fears and take steps to contain the virus, its impact is already being felt on the local and global economy. Yesterday we learned that recruitment company Indeed asked all of its 1,000 Irish employees to work from home until February 17 following concerns a staff member in Singapore may have been exposed to the virus.
Some of the world’s biggest brands across homeware, hospitality and clothing have temporarily closed operations in China, but it is likely that those whose supply chains are closely knit into the country that are likely to be most directly affected outside of the country itself.
The globally integrated tech and car industries who rely on China for crucial parts are hurting even now. Apple, which has given a “wider-than-usual revenue range” in its second-quarter guidance, is preparing for a ripple effect across its operations with a likely impact on its inventory as a result of a break in its supply chain.
It’s a similar story for Elon Musk’s Tesla and for Fiat, whose chief executive announced last week that one of its European factories was at risk of closure within four weeks due to the impact of the coronavirus epidemic on a “crucial” Chinese supplier.
Meanwhile on cruise ships passengers have been quarantined and airlines, who are reliant on Chinese tourists and business travellers, have ceased flights to and from the country.
Global events are either being cancelled or exhibitors are pulling out. LG and ZTE have already announced they will not exhibit at the Mobile World Congress in two weeks’ time in Barcelona, a city which is some 9,398km from Wuhan, where the virus began and has been most virulent.
And that brings me to another phrase which is often bandied about: “the world is a village.” In the case of this virus and business at least, that is true.
While the virus takes its toll in terms of human cost, its economic cost rises apace. The Oxford Economics consultancy has predicted the Chinese economy will grow at 5.6 per cent this year against a previous pre-virus forecast of 6 per cent.
The Consumer Price Index showed an increase of 20.6 per cent in January in the cost of food, and on Monday China pumped $129bn into its financial system. But it is not just there that the economic cost will be felt. In a global economy with an integrated international supply chain Oxford Economics expects the global economy to grow slightly less than it would have done had the virus not hit, downgrading its prediction by 0.2 percentage points.
The consultancy’s predictions are based, it says, on an assumption that the ‘worst case scenario’ will be avoided, meaning there is a risk of greater economic damage if the virus is not contained. China is a massive exporter but also a significant importer, particularly of cars and luxury products.
Then there is the matter of borders. At the time of writing, 26 countries are affected by a virus that takes no heed of borders. While governments across the world move to prevent the virus hitting their citizens, we begin to see that the world might not be a village after all, because a village has no borders.
On Saturday the Republic’s Health & Safety Executive expressed concern that the advice being given by the UK is different than that offered by the Irish government, which is based on guidance from the European Centre of Disease Prevention and Control (ECDC). The UK, in the face of identifying that a third person with the virus had been to Singapore but not China, tightened its restrictions on travellers coming not just from China but from nine Asian countries, going beyond ECDC advice.
This could mean more people travelling into Ireland and Northern Ireland through Dublin airport and create challenges in terms of cross-border co-operation in health which is currently well-established.
Which brings us, of course, to Brexit! Could it be that a virus which began in China is the first challenge of the Brexit era? It remains to be seen. For now what we know is that one way or another, we are all going to be affected by the novel coronavirus to some extent.
And while we should not panic, we should certainly be aware that in some sense our world is now indeed a village, this virus is as contagious economically as it is physically, and for the personal and economic health of all, global co-operation is required.
:: Claire Aiken is managing director of public relations and public affairs company Aiken
:: Next week: Brendan Mulgrew