The economic risk from COVID-19 in Pacific Island countries: very few infections but lots of pain

We forecast the economic loss from COVID-19 in Pacific Island countries using pre-pandemic data. Applying a risk measure proposed by Noy et al. (2020a. Measuring the Economic Risk of COVID-19. Global Policy. Forthcoming), we use pre-COVID data to compute principal component indices for exposure, vulnerability, and resilience to COVID risk in the Pacific. We rank all the Pacific Island Countries according to their risk profile. Alternatively, we use the concept of Lost Life-Years (LLY), developed in Noy (2016. A Global Comprehensive Measure of the Impact of Natural Hazards and Disasters. Global Policy, 7(1), 56–65), and derived from the World Health Organization’s Disability Adjusted Life Years (DALYs) method. We use the calculations of LLY to examine economic loss based on the forecasted losses associated with the declines in tourism, and with future growth, as predicted by the Asian Development Bank. The ranking of risk across the Pacific countries for each of these alternative measures is then compared.