Good morning Mr. Chairman, distinguished members of the Committee, invited guests. I am pleased to have the opportunity to address you today regarding the potential economic implications of an influenza pandemic. I am especially grateful to the Committee for calling attention to the global economic and trade-related issues that are closely conjoined with questions of how governments and other public and private institutions can better prepare for and respond to the risk of pandemic.

At bio-era, my colleagues and I have been studying the economic impacts of H5N1 avian influenza for more than two years. We agree with most other economic analysts that the emergence of highly virulent, pandemic influenza would be accompanied by significant shocks to the global economy, with costs ranging upwards of $500–800 billion of dollars worldwide, depending on the severity of the disease. Table 1 provides a comparison of various institutions’ estimates of the economic costs of a pandemic. The bottom line is that a pandemic could affect our highly integrated global economy in a way that has no real precedent in recent decades. While we know that human societies and economies are highly resilient in the long run, the economic disruption caused by a pandemic in the short run could exacerbate the problem of responding to the disease.