From barn to boardroom | Weeks of 27 - 10 Feb '25
Threat concerns this week: China's pacific interest. AI & EU. Bird flu escalating.
🎙️ Listen to a summary of this fortnight’s risks
Hello 👋 get a brew on because these are the top 3 emerging risks between January 27th, and February 10th, 2025…
Economic | As of February 7, 2025, the H5 bird flu continues to pose a significant challenge to global wildlife and agriculture, with its impact extending far beyond its avian origins. The virus has established a widespread presence in wild bird populations across 51 jurisdictions, with over 11,600 detections recorded. More alarmingly, the poultry industry has been hit hard, with more than 156 million birds affected across the same number of jurisdictions. In a surprising turn of events, the virus has also made inroads into the dairy industry, affecting 959 herds across 16 states, marking a concerning expansion of its host range. The human toll of this outbreak, while currently considered a low public health risk, is not insignificant. Since 2024, 67 confirmed human cases have been reported, with the majority linked to exposure in dairy and poultry operations. California, Colorado, and Washington have reported the highest number of cases, highlighting the geographical spread of the virus. Tragically, Louisiana reported the first H5 bird flu death in the U.S. Additionally, several probable cases have been identified across multiple states, further underscoring the need for vigilance. While there's no evidence of person-to-person transmission, the CDC remains on high alert, closely monitoring the situation through its flu surveillance systems. As the virus continues to evolve and adapt, the agricultural and public health sectors must remain prepared for potential further developments in this ongoing crisis.
Technological | The European Union has enacted a ban on artificial intelligence (AI) systems deemed to carry "unacceptable risk," prohibiting applications such as social scoring and certain uses of facial recognition technology. Organisations operating within or engaging with the EU market must now assess their AI deployments to ensure compliance with the new regulations. This involves identifying and discontinuing any prohibited AI practices, implementing robust oversight mechanisms for high-risk AI applications, and preparing for potential audits by regulatory authorities. Non-compliance can result in substantial fines, reaching up to 7% of global turnover or €35 million, whichever is greater. Therefore, it is imperative for companies to conduct thorough reviews of their AI systems, update compliance protocols, and stay informed about evolving regulatory requirements to mitigate legal and financial risks. Source
Geopolitical | The Cook Islands' recent push to establish its own passport and deepen ties with China has sparked protests and geopolitical concerns, particularly regarding its longstanding relationship with New Zealand. Critics fear this move could lead to increased Chinese influence, potential deep-sea mining deals, and a shift in regional security dynamics. While Cook Islands Prime Minister Mark Brown has reportedly shelved the passport proposal, the broader strategic partnership with China remains on the table. For New Zealand businesses and stakeholders, this evolving situation presents risks and uncertainties. Companies with supply chain ties to the Cook Islands should monitor trade and regulatory changes, particularly if China’s involvement leads to new economic policies or environmental regulations. Businesses in the tourism and hospitality sector should assess potential shifts in visitor demographics and investment flows, while those in finance and legal sectors may need to prepare for changes in compliance requirements. Additionally, firms involved in infrastructure, maritime industries, and environmental management should evaluate long-term geopolitical risks and ensure contingency plans account for any shifts in regional influence. Proactive risk assessment and stakeholder engagement will be crucial as this situation develops. Source
Our thoughts
As we reflect on the evolving landscape of global health security and technological governance, we are struck by the two parallel narratives that seem to echo lessons from our recent past. The bird flu situation presents a fascinating case study in organisational preparedness. While our collective memory of COVID-19 provides valuable experience, we have observed how this familiarity might paradoxically breed a dangerous complacency. The rising case numbers signal a clear imperative: our pandemic response strategies must evolve beyond the outdated frameworks of 2020, embracing proactive measures before government mandates force our hand.
Meanwhile, the unfolding drama of AI regulation in Europe captures our attention as a profound intersection of innovation and responsibility. The EU's €35 million fine seems almost symbolic against the backdrop of OpenAI's staggering $6.6 billion investment and the global AI investment pool of $131.5 billion in 2024. Yet what fascinates us most is the tension between regulatory caution and technological momentum. Despite restrictions, EU residents continue embracing commercial AI tools, suggesting a complex relationship between governance and innovation that defies simple categorisation. Through conversations with colleagues in both technology and policy sectors, we’ve come to appreciate how this regulatory landscape reflects deeper questions about balancing progress with protection in our rapidly evolving digital age.
Finally, we’ve been reviewing the intricate dynamics of China's engagement with Africa as an example for its engagement with the Cook Islands. The Africa-China relationship is a profound historical tapestry that has woven these two regions together since the 1950s. What is fascinating is the near-universal reach of this relationship. The fact that by 2024, every African nation except Eswatini has been touched by Chinese aid speaks volumes about the scale and intentionality of this engagement.
The depth of China's involvement reveals itself in remarkable ways, from the tangible transformation of landscapes through infrastructure projects spanning 35 African nations to the subtle but powerful cultural influence embodied in the establishment of Chinese language programs across thirty universities. This multifaceted approach, combining hard infrastructure with soft power initiatives, reminds us of discussions we’ve had with development economists about the intricate dance between economic pragmatism and cultural diplomacy. The underlying motivations (securing natural resources, expanding market access, and strengthening diplomatic bonds) reflect a sophisticated understanding of how economic and political interests can align to create what appears, at least on the surface, to be mutually beneficial relationships.
Yet, as with all complex international engagements, these developments invite us to consider deeper questions about the nature of development, partnership, and the evolving dynamics of global power structures in our interconnected world. This is perhaps why New Zealand's Foreign Minister, Winston Peters, has voiced unease over the absence of transparency and consultation between the Cook Islands, NZ, and China. He emphasizes existing constitutional arrangements that mandate cooperation on defence and security matters. With China’s very complex, intimate relationship with such economically challenged countries out of Africa, could they now be moving onto the Pacific? An advantageous strategic and resource heavy position.
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First human death from Bird Flu. Dairy now in the crosshairs
Category: Economic
Review our report’s terminology here ↗
In summary: Our team's analysis of the H5N1 outbreak reveals a complex interplay of biological evolution and economic disruption that demands immediate attention. The virus's remarkable adaptation from avian populations to dairy cattle marks a significant shift in its host range, while human cases, including the recent U.S. fatality, signal concerning viral mutations. Our research indicates substantial economic reverberations, particularly evident in the dramatic surge of egg prices and mounting productivity losses in the dairy sector. These market disruptions echo through global supply chains, affecting industries from agriculture to healthcare, creating a ripple effect reminiscent of early COVID-19 patterns.
While H5N1 shares COVID-19's zoonotic origins, our findings suggest a crucial distinction in its current lack of sustained human-to-human transmission, presenting a vital window for preparatory measures. Our analysis points to the necessity of enhanced biosecurity protocols across agricultural operations, with particular emphasis on poultry and dairy sectors. The team's assessment of healthcare preparedness indicates an urgent need for robust protective equipment provisions and updated safety protocols, while vaccine development progresses in parallel. These insights, gathered through extensive consultation with industry experts and public health authorities, underscore the importance of proactive risk mitigation strategies in navigating this evolving challenge.
Sources:
CDC - H5 Bird Flu: Current Situation | Published on 2025-02-06
Wikipedia - 2020–2025 H5N1 outbreak | Published on 2025-02-05
John Hopkins - Bird Flu Is Raising Red Flags Among Health Officials | Published on 2025-01-14
You should be concerned if…
Poultry Industry: With H5N1 outbreaks affecting millions of birds, poultry farms must enforce strict biosecurity to prevent transmission. Supply chain disruptions and rising costs could impact production, making contingency planning and supplier diversification essential.
Food Service & Hospitality: Restaurants and catering businesses face potential shortages and price spikes for poultry and dairy products. Ensuring food safety through proper sourcing, storage, and cooking practices is critical to maintaining customer confidence and avoiding health risks.
Agriculture & Farming: Livestock farmers must monitor animal health closely, as the virus has already spread to dairy cattle. Isolating sick animals, enhancing sanitation, and limiting farm access can help prevent further transmission and long-term productivity losses.
Retail & Grocery: Supermarkets may experience shortages of eggs, poultry, and dairy, leading to price increases and shifts in consumer demand. Retailers should communicate transparently with customers, explore alternative supply options, and reinforce food safety messaging.
Healthcare: Medical facilities need to prepare for potential human infections, particularly in workers exposed to livestock. Ensuring PPE availability, updating infectious disease protocols, and training staff on early symptoms of avian influenza will be key to containment.
These items are generic assumptions. We recommend considering your own unique risk landscape against your critical dependencies. If you don’t know what they are, get in touch.
Disruption Risk
Disease or Pandemic
Revenue losses due to decreased demand or operational slowdown.
Delays or inability to receive essential goods or services.
Preventative actions
Avoid Contact with Wild Birds
Do not touch, feed, or handle wild birds, as they are a primary carrier of H5N1. If you find a dead bird, report it to local authorities instead of disposing of it yourself.
Avoid Raw Milk Consumption
Unpasteurized milk and dairy products may carry the virus. Always choose pasteurized milk to ensure safety and reduce the risk of infection.
Maintain Good Hygiene
Wash hands thoroughly after handling poultry, livestock, or any farm equipment to minimize the risk of virus transmission.
Stay Informed on Local Risk
Check USDA and CDC updates regularly to understand outbreak levels in your area and adjust safety measures accordingly.
Preventative Measures for Backyard Poultry Owners
Keep new birds isolated for at least 30 days before introducing them to an existing flock. Avoid sharing equipment with other bird owners to prevent contamination.
Minimize Poultry Movement
Reducing the movement of birds between farms and regions can help limit the spread of the virus and prevent further outbreaks.
Protective Measures for Poultry & Dairy Workers
Always wear protective gear, including gloves and masks, when working with poultry and livestock. Avoid unprotected exposure to animals or contaminated materials.
Monitor Dairy Milk for Infection
Regularly test raw milk for H5N1 to detect potential contamination early. Dairy processors should collect and submit samples for testing.
Recognize Symptoms & Seek Medical Attention
Workers exposed to infected animals should monitor for flu-like symptoms. If symptoms appear, isolate immediately and seek medical guidance.
Vaccination for Poultry
Some countries vaccinate poultry against bird flu to reduce spread. However, the U.S. does not widely adopt this practice due to potential trade restrictions.
Enhanced Disease Surveillance
Monitor other species on farms, such as cats and rodents, to better understand how the virus spreads between animals.
Healthcare Professionals: Follow CDC Guidelines
Stay updated on the latest CDC recommendations for managing potential human cases and co-infections with seasonal flu.
Monitor for Co-Infections
Test individuals exposed to poultry or livestock for both seasonal flu and H5N1 to prevent the risk of virus reassortment.
Report Suspected Cases Promptly
Any suspected cases of H5N1 in humans should be immediately reported to public health officials for containment and monitoring.
Seasonal Flu Vaccination for Humans
While it does not prevent bird flu, the seasonal flu vaccine reduces the risk of co-infection, which could lead to more dangerous virus mutations.
Poultry Vaccine Availability
Vaccination for poultry is used in some countries but remains limited in the U.S. due to concerns over international trade restrictions.
By implementing these preventive actions, individuals and businesses can reduce the spread of H5N1 and protect public health while minimising economic disruption.
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