Epidemics Before COVID-19 and Intervention Through Fiscal Policy Instruments
The coronavirus family circulating among the people consists of HCoV-229E, HCoV- OC43, HCoV-NL63, HKU1-CoV, and SARS-CoV-1, MERS-CoV, and COVID-19, which have an epidemic effect.
SARS-CoV, which first appeared in China in 2002, was effective in 29 countries between 2002 and 2003. SARS-CoV, which is thought to have been transmitted from bats to palm cats and from there to people, infected 8,098 people worldwide and caused 774 deaths (Akyol 2005; Sengoz 2013; Maden 2014; TTD 2020).MERS-CoV, a member of the coronavirus family, also appeared in Saudi Arabia in 2012, infecting 2206 people in 27 countries, causing 823 deaths. Bat-origin virus is thought to have been transmitted to humans through camels (Maden 2014; TTD 2020; TUBA 2020). While the fatality rate as a result of SARS-CoV was 9.5%, this ratio was recorded as 37.3% with a fourfold increase in MERS-CoV.
Publishing a report in mid-2003, the Asian Development Bank conducted a review of possible losses in GDP if the SARS outbreak ends in one financial quarter and two financial quarters. According to the findings, in the first case, the annual GDP growth rate of 2003 fiscal year was 0.4% compared to the starting point where there was no epidemic in East Asian countries, while in Southeast Asian countries, the
Table 2.3 Economic impact prediction of SARS: selected asian countries (2003)
| Countries | Possibility of ending in 1 quarter—loss of GDP growth | Possibility of ending in 2 quarter—loss of GDP growth |
| East Asia | 0.4 | 1.0 |
| China | 0.2 | 0.5 |
| Hong Kong | 1.8 | 4.0 |
| South Korea | 0.2 | 0.5 |
| Taiwan | 0.9 | 1.9 |
| Southeast Asia | 0.5 | 1.4 |
| Indonesia | 0.5 | 1.4 |
| Malaysia | 0.6 | 1.5 |
| Philippines | 0.3 | 0.8 |
| Singapore | 1.1 | 2.3 |
| Thailand | 0.7 | 1.6 |
Source Fan (2003)
ratio in question was estimated to have decreased by 0.5%. In the second case, it was estimated the annual GDP growth rate of 2003 fiscal year was 1.0% compared to the starting point where there is no epidemic in East Asian countries; while in the Southeast Asian countries, the ratio in question was estimated to have decreased by 1.4% (Table 2.3) (Fan 2003).
In the face of the vulnerability brought by the outbreaks that occurred one after another, countries have entered the process of struggling with all their policy instruments. As can be understood from the above economic picture, Asian countries, when faced with SARS under the impact of the previous crisis, fiscal balances were out of control. In Hong Kong in particular which was severely affected, the government revenues declined by more than 35% nominally between the fiscal year 1997/1998 and the fiscal year 2002/2003, as a result of the decline in the private sector and the asset market and increases in health and social security spending. This loss of income caused increased budget deficits from fiscal year 1998/1999 (excluding fiscal year 1999/2000) to fiscal year 2003/2004. Reforms were made to balance the financial position. Considering the process as a whole, 40% of financial reserves (approximately HK $182 million) were spent on financing health expenditures in Hong Kong (HKMA 2012).
Especially in Far Eastern countries where tourism has a large share in national income, epidemic exacerbated the economic crisis by disrupting travel and tourism. For example, according to a study investigating the impact of the MERS epidemic on the South Korean tourism industry, the industry suffered a loss of approximately $ 2.6 million (Delivorias and Scholz 2020).
2.3