This week, leaders from medicine, economics, politics and civil society are uniting to demand immediate and coordinated international action in the next few days to mobilize the resources needed to address the COVID-19 crisis, prevent the current health catastrophe from becoming one of the worst in history and avert a global depression.
As a letter to the world’s leaders notes, because we are so far behind the COVID-19 curve, many lives are being lost needlessly, other health issues are being ignored, and societies and economies are being devastated.
During the global financial crisis of 2008, G20 leaders worked to coordinate a global response. And in other previous emergencies — such as tsunamis, civil wars, or epidemics — coalitions of countries have convened donor conferences to generate the necessary resources.
Today, we need both: a G20 task force to coordinate international support and a donors’ conference to make that support effective.
A decade ago, the immediate economic crisis could be surmounted when the undercapitalization of the global banking system was addressed. This time, the economic crisis will not end until the health emergency is addressed, and the health emergency will not end by addressing the disease in one country alone. It can end only when all countries recover from COVID-19 and it is prevented from returning on a regular basis.
All healthcare systems and societies — even the most sophisticated and richest — are buckling under the strain caused by the coronavirus. However, if we do nothing as it spreads in African, Asian, and Latin American cities and smaller communities — which have little testing equipment and fragile health systems, and where social distancing will be impossible to achieve — it will cause devastation, persist and perhaps inevitably fuel other outbreaks worldwide.
PUBLIC FUNDING
The only way we can end the crisis sooner rather than later is to do what we have omitted to do for years: fund the public health, scientific and economic agencies that stand between us and global disaster.
World leaders should immediately agree to an initial commitment of US$8 billion — US$1 billion for the WHO to continue its vital work this year, and the remainder to support the Coalition for Epidemic Preparedness Innovations to coordinate efforts to develop, manufacture and distribute effective diagnostics, therapeutics and vaccines. These advances, with equitable access for all countries, are vital if we are to end this pandemic and prevent future tragedies.
Funding must also be provided to meet the global need for ventilators and personal protective equipment. Rather than having each country, state, or province scramble for a share of output from existing capacity, with all the cost-inflationary competition that would bring, we should be vastly increasing capacity by coordinating the global production and procurement of such medical supplies. And, if a vaccine becomes available, sufficient funding must be allocated to deliver it, through existing organizations such as Gavi, The Vaccine Alliance to the poorest countries.
According to even the most optimistic estimates from Imperial College, London, there would be 900,000 deaths in Asia and 300,000 in Africa. Developing countries not only lack modern health systems; they also have wholly inadequate social safety nets.
At least US$35 billion is needed to provide vital medical supplies, recruit staff and strengthen national resilience.
And yet, despite the looming danger, almost 30 percent of countries have no COVID-19 national preparedness and response plans, according to the WHO, and only half have a national infection prevention and control program. Many lack adequate water, sanitation and hygiene standards in their healthcare facilities.
While it is estimated that richer countries would have only one-seventh of the hospital beds they need for critical care, poor countries would have far, far fewer, and many would have none at all.
FISCAL STIMULUS
National governments are also attempting to counter the downward slide in their economies. However, to prevent a liquidity crisis from turning into a solvency crisis, and today’s global recession from becoming tomorrow’s depression, better-coordinated fiscal, monetary and trade measures are urgently needed.
The fiscal stimulus packages now being implemented in some countries will be much more effective if all countries in a position to do so join in. However, if we are to limit mass redundancies (which are already occurring on a frightening scale), it is also vital that banks follow through rapidly on government loan guarantees and provide the cash support that companies and their workers need.
The poorest countries need special economic assistance. The international community should begin by waiving this year’s developing-country debt repayments, including US$44 billion due from Africa. But the reality is that at least US$150 billion in new funds will be needed to protect developing economies.
The World Bank can scale up country support while still meeting its lending ceiling — but that would not be enough. In 2009, during the Great Recession, World Bank spending went from US$16 billion to US$46 billion. A similar expansion of available resources should be guaranteed now.
The IMF has said it would mobilize all its available resources. It should allocate about US$500 billion to US$600 billion in Special Drawing Rights.
Time is short. Ideally, all this should be agreed and announced this week and be formally confirmed by the IMF and the World Bank Development Committee when they meet on Friday to Sunday next week. This might be the most viable exit strategy available to the world. If the price seems high, the consequences of not paying it could well be catastrophic.
Gordon Brown, a former British prime minister and chancellor of the exchequer, is the UN special envoy for global education and chair of the International Commission on Financing Global Education Opportunity. Erik Berglof, a former chief economist at the European Bank for Reconstruction and Development, is director of the Institute of Global Affairs at the London School of Economics and Political Science. Jeremy Farrar is director of the Wellcome Trust, a global charitable foundation dedicated to improving health.
Copyright: Project Syndicate
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