April 22, 2010

Iceland Volcano Halts World Economy: From African Flowers to Japanese Cars

The Iceland volcano eruption has shown us how inter-connected the global economy is. From flowers in Africa to Japanese flowers, the impact has been felt around the globe. Here are some excerpts from CBS News.

"While the volcanic ash cloud covering parts of Europe continues to wreak havoc for airlines - costing the industry more than $1 billion as of Monday - grounding most of the continent's air travel for several days has had a ripple effect extending far beyond Europe's borders.

The following is a collection of international anecdotes demonstrating how the ash cloud has done more than hit airlines' bottom lines and inconvenienced air travelers.

• The lack of refrigeration facilities at the airport in capital of the West African nation of Ghana has been a big blow to pineapple and pawpaw farmers who sell to Europe because of the lack of flights. As of Tuesday, no cargo flights have taken off yet.

• In Africa, a group of five people from Sierra Leone and Liberia had to abandon a fact-finding trip to the war crimes trial of former Liberian President Charles Taylor in The Hague.

• In Kenya, thousands of day laborers are out of work because produce and flowers can't be exported amid the flight cancellations. Kenya has thrown away 10 million flowers - mostly roses - since the volcano eruption. Asparagus, broccoli and green beans meant for European dinner tables are being fed to Kenyan cattle because storage facilities are filled to capacity.

• The U.S. Travel Association estimates that the ash cloud produced by the eruption has cost the U.S. economy $650 million, approximately $130 million per day. That kind of loss to the economy affects the cashflow to fund about 6,000 American jobs, the association said. Every international flight bound for the U.S. is worth an average of $450,000 in spending from travelers, which the association says pays for five jobs per flight."

1 comment:

Molly said...

It's interesting how strange Natural Disasters affect the economy. Through Katrina and other major hurricanes the US has of course seen spikes in costs as supplies temporarily deacrease but who would think that the dust from a volcano would have such an impact. It also opens your eyes up to just how important air transportation has become to the global economy.