A range of policies are being designed to address the

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A range of policies are being designed to address the crisis. First and foremost, countries need to implement health-related policies to contain the spread of the virus. In economic terms, China has already begun to address the economic consequences of the virus; these effects come on top of the challenge that China is facing in terms of its slowest-paced economic growth in three decades. Other countries need to be aware of the potential fall-out, especially this quarter, but also later, as impacts often have lags. Some countries are much more exposed to China than others, but most if not all are much more exposed than when a health pandemic struck in 2003. There may also be gainers, for example producers that take the place of Chinese production or net importers of commodities whose prices have dropped. This is a first attempt to assess the vulnerabilities and potential impacts in low and middle income countries. As the spread of the virus unfolds, we are gaining a better understanding of what is happening inside China, whilst obtaining examples of impacts in China and abroad, and obtain more precise estimates of the impacts through trade in goods and services, investment and migration linkages. This paper will need to be updated regularly.
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1 1 INTRODUCTION Growth and economic transformation pathways are subject to a range of shocks that will affect economies in varying ways. In the past, we have examined the impact of shocks such as financial crises, the eurozone crisis and a slowdown in China. 1 Health emergencies can also have major economic impacts on low- and middle-income countries and we examine these in this paper. On 28 January 2020, the World Health Organization (WHO) declared a public health emergency of international concern around Novel Corona Virus 2019, following previous emergencies around H1N1 (2009), Ebola in West Africa (2014), Polio (2014), Zika (2016) and Ebola in Democratic Republic of Congo (2019). At this stage it is difficult to understand the precise impact of the latest virus but it has already claimed the lives of more than 360 people (as of 3 February 2020) and has disrupted travel. This paper assesses the possible vulnerabilities and impacts in low- and middle-income countries to the effects of this outbreak. Much of the outbreak is currently centred around China, with the affected areas effectively under lock-down. This will affect the Chinese economy and beyond. Many countries in South East Asia and Africa are increasingly dependent on economic links with China for their growth and economic transformation. Beyond the health-related effects, should countries be concerned about the possible economic impacts? How might they be affected and what are the transmission channels? While some global impacts are emerging already, such as declining stocks, there is less discussion of the effects on individual economies. This paper examines this and assesses the vulnerabilities of countries by considering their exposure and resilience to the economic effects.
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