Looking at the global economy, one way to describe the fallout of the last few months is to see the world banking system as having been attacked by a virus.

A few months ago, large banks were lending to each other and dismissing the idea of risk or default as something not only outlandish but outdated. The idea that threats to the system — any system — are in some way old-fashioned and inconceivable is one of the central fallacies of modernism. For years, many economists — the high priests of modernism — dismissed warnings about humans burning too much fossil fuel.

Economists are normally given to believe that technology and human ingenuity can overcome most obstacles and, as a result, contend that mankind and science would triumph.

Many argued that the genius of the response to the first oil crisis when cars became dramatically more fuel efficient would be repeated. In short, science and technology could overcome anything nature put in our way. Similarly, this time last year, banks said that their monetary defence systems and their new checks and balances were so sophisticated that global financial risk was modest, if not negligible.

Today we see another enormous threat not being taken seriously because people believe in modern medicine. The idea that a plague could visit the western world is typically dismissed as a fantasy. Yet imagine what Dublin, Cork or Galway would look like after a pandemic.

Imagine a 1970s’ sci-fi movie, where a city has been visited by fiendish extra-terrestials. The streets are empty — no cars, no buses, no people — everyone is terrified to go outdoors. The city is paralysed.

Yesterday, I attended a fascinating meeting on the risk of a new global pandemic. The WHO (World Health Organisation) has consistently warned that the world is due another flu pandemic along the lines of the Spanish flu pandemic of 1918 which killed more people than the First World War.

The death toll in 1918 is estimated to be anywhere between 30 million to 40 million worldwide. Since then, the world has suffered two further flu pandemics — one in 1957, which killed over two million people. Another, in 1968, localised mainly in China, which claimed between two and four million people. In the US alone, 34,000 died as a result of the 1968 ‘Hong Kong’ pandemic.

Today, with increased travel and a huge increase in the world’s population, the spread of a virus emanating from Asia would be much more rapid. Up to now, outbreaks of Asian flu, avian flu and SARS have not spilled over into the general non-Asian population. However, WHO officials believe this has been more a matter of luck than anything else. Indeed, they point out that because the last major pandemic was in 1968, no member of the present day global workforce has immunity.

At the discussion, Dr Mary Horgan of Cork University Hospital explained that no-one knows when the next pandemic will hit, but when it does, the most common reaction will be one of blind panic. To evidence her point, she told the story of the A&E ward in Cork during the SARS outbreak. An Asian man walked into the hospital wearing a mask over his mouth and the place cleared in seconds. People panicked at the sight of potential Chinese carrier. Now imagine the reaction on the streets if a pandemic did actually take hold here!

This picture of deserted streets at the height of the pandemic would not be a million miles from the 1970s’ sci-fi horror flick. A pandemic is a fusion of the common flu with some virulent strain of avian flu for which there is no human immunity. The reaction of Ireland to this threat would depend on the number of vaccines we had stockpiled. As vaccines prevent rather than treat the flu, we would have to roll out a mass national immunisation programme.

We have got to question our ability to organise such a national emergency plan and therefore, anti-viral drugs would become the main plank of our government’s pandemic reaction. However, globally, demand for these drugs would go through the roof, leading possibly to a bidding war. Even if we could get our hands on all the medicine, can you imagine the chaos at A&E if hundreds of thousands were to present themselves for treatment? How would we distribute drugs around the country? Remember the ‘iodine tablet’ fiasco of a few years ago and ask yourself has much changed?

The reason a pandemic would lead to hysteria is because of the highly contagious nature of the flu. In the UK, where the NHS has actually done simulations, it is thought that a ‘moderate pandemic’ would result in 25pc of the workforce having flu symptoms within six weeks. Most people would recover from it, but the effect of the society would be traumatic. For example, it would initially lead to the workforce taking to the bed, or at least staying out of contact with other humans.

The more frightening ‘severe pandemic’ scenario, could lead to 50pc of the workforce having symptoms. In the event of the latter, Irish economist Larry Lacey has calculated that the outbreak could cost the economy over €2bn.

After peaking six or seven weeks after the first case, the NHS forecasts that the pandemic would begin to recede but as many of one in 40 who contracted the virus would die. This is a truly horrific prospect.

A pandemic would lead to the rapid closing of borders. Most non-essential travel between countries would be halted. Immigration also would cease for weeks if not months.

At the moment, the world seems to be oblivious to this very real threat, despite the WHO’s constant warnings. At yesterday’s conference, Willie Walsh, the CEO of British Airways, outlined the precautions and early warning system that BA has installed in the event of a flu pandemic.

Obviously, a global airline like BA would be more exposed than other businesses simply because travel would be first hit. However, the amount of thought and money the company seems to have put into its pandemic emergency plan indicates that BA’s management, at least, believe that we are not talking about ‘if’, but ‘when’.

For the moment, the rest of us are hoping that it won’t happen, ignoring the WHO’s admonishment. The best way to regard our nonchalance is to compare it the computer user who gets a top of the range PC and then does not bother to install anti-viral software. As long as the machine does not get infected, everything is all right. However, if you are like me and freak out at the slightest hint of computer problems, you will probably recognise the panic that descends when a computer starts acting up. Instead of staying calm and allowing the logical side of your brain to think through the PC problem, many of us fly off the handle, effing and blinding. The hysteria and panic is far out of proportion to the actual problem or indeed, the remedy, but you panic nonetheless.

Such national panic is also likely to be our collective reaction to a flu pandemic. The extent of this alarm would be linked to our confidence that the HSE could handle the crisis.

Would you feel safe? No, I didn’t think so!

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