BIRD FLU OUTBREAK THREATENS TO DEVASTATE CENTRAL EURASIAN ECONOMY

As Russia and Kazakhstan are now threatened by the Asian bird flu, the outbreak is understood to potentially entail wider economic repercussions. In the words of Russia’s popular newspaper Moskovsky komsomolets: “Europe is afraid of our poultry” (August 8).

The first cases were confirmed in Russia’s Siberian region of Novosibirsk last month, followed by discoveries in adjacent territories. The H5N1 strain of bird flu, which can spread to humans, has so far been officially confirmed in three Siberian regions: Novosibirsk, Altai, and Tyumen.

Bird flu cases were reported in five districts of Novosibirsk region, as well as in Altai, Tyumen, Kurgan, and Omsk regions. An outbreak was also reported in the Pavlodar region of neighboring Kazakhstan.

Novosibirsk region has indicated plans to slaughter tens of thousands of domestic birds in 13 locations. The Altai region, located between Novosibirsk and Kazakhstan, also announced a cull of all birds at private farms where the virus had been found.

Russia initially insisted that the bird flu outbreak in Siberia involved a strain that has never been known to affect humans. “Our initial assessment is that this is H5N2,” Gennady Onishchenko, Russia’s top epidemiologist, announced. “There have been no cases of H5N2 being passed to humans and it is less dangerous for people,” he argued. Onishchenko speculated that migratory birds, possibly from Southeast Asia, had brought flu with them as they flew to Siberia for the summer.

So far, no cases of human transmission have been registered, Russia’s Rospotrebnadzor consumers’ rights watchdog said in a statement. “The situation among the human population remains stable regardless of the epidemic among birds caused by the A (H5N1) virus,” the statement said (Interfax, August 8).

However, other officials have warned of serious repercussions. The Russian Emergency Situations Ministry has warned that the H5N1 virus dangerous to humans and found in Siberia might spread to the heavily populated European part of Russia, where the main poultry farms are located.

Russian scientists have pledged to develop a bird flu vaccine by next year. “In 2006, we will be able to create a vaccine against bird flu,” said Rem Petrov, a member of the Russian Academy of Sciences. “There is no need to panic, but we must be prepared for the worst,” he said, also warning, “There is a danger of bird flu spreading to other regions of Russia” (RIA-Novosti, August 5).

The virus outbreak and subsequent bird flu scare will harm Russia’s $6 billion per year poultry market. The country currently consumes some 2 million tons of poultry each year, of which some 60% is imported. Now Russian poultry producers and traders face the worrying prospect of loosing further market shares to overseas competition.

The outbreak is also set to affect trade among Russia’s regions, as non-affected areas are keen to prevent a spread of the virus. The city of Moscow, the country’s major consumer hub, has banned poultry imports from Novosibirsk and other affected areas. Sverdlovsk region and the city of Yekaterinburg in the Urals have banned all poultry shipments from outside the region (Regnum, August 8). As inter-regional trade barriers are effectively installed, Russian regional authorities may subsequently be tempted to use the same methods under different circumstances.

The outbreak also affects economic ties among many former Soviet republics in Central Eurasia. For example, Kazakhstan, Ukraine, Kyrgyzstan, and Tajikistan have banned all poultry imports from Russia. Kyrgyzstan and Tajikistan also halted poultry imports from Kazakhstan. Subsequently, Russia stopped poultry imports from Kazakhstan. Belarus has also introduced stricter controls to protect its territory from bird flu (RIA-Novosti, August 8).

The bird flu scare may entice some countries to rely more on alternative markets. Tajikistan said it receives some 80% of its poultry imports from Iran; therefore the ban on Russian and Kazakh poultry would not affect the Tajik food market (RIA-Novosti, August 5).

Trade barriers run against the goals of several post-Soviet groupings created to promote free trade. Russia, Belarus, Kazakhstan, Kyrgyzstan, and Tajikistan are members of the so-called Eurasian Economic Community. Russia, Belarus, Ukraine, and Kazakhstan have also created the “Single Economic Space” to promote greater convergence of economic policies and trade legislation.

After Moscow joined the Central Asian Economic Cooperation Organization (CACO) in May 2004, it now includes Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan, and Russia. The CACO also pledges to create a regional common market and free-trade zone.

Poultry constitutes a relatively small percentage of trade among former Soviet states. However, the mutual bans and cross-bans on poultry imports create a sort of precedent that contradicts the stated goals of free trade among members of post-Soviet alliances in Central Eurasia.

The outbreak also will affect trade between Central Eurasia and lucrative European markets. The European Union has indicated plans to ban poultry imports from Russia and Kazakhstan after cases of bird flu were reported in both countries.