African Reserves Loans

Pandemic Readiness Test Failed

Mariana Mazzucato,

LONDON – The pandemic is not over. While the summer of 2022 is very different from the summer of 2020, because we now have vaccines, treatments and a better understanding of the virus, that is not enough.

Every week, 15,000 people still die from COVID-19. Poorer countries are still struggling to deploy vaccines, tests, diagnostics and other tools.

And countries at all income levels remain woefully unprepared for the next pandemic, even as experts warn that its arrival is a matter of “when”, not “if”.

Since the onset of the COVID-19 pandemic, world leaders have recognized the need for greater coordination, collaboration and collective funding to support improved pandemic preparedness and response (PPR).

Following recommendations from an independent high-level panel, the G20 agreed last June to create a new Financial Intermediary Fund (FIF) – hosted by the World Bank, in partnership with the World Health Organization – to help bridge the $10.5 billion annual shortfall PPR financing.

Many see the IFF as a long-awaited opportunity to change the way we collectively approach global commons like health (or climate).

Under a more inclusively governed global PPR support system, all countries would participate in decision-making and burden-sharing, and all would reap the same collective benefits.

This would mean moving away from the outdated and inefficient status quo between donors and recipients, where PPR is seen as just one ‘development’ project among others.

Instead, everyone would recognize that when it comes to averting global health crises, the needs, gaps, benefits and responsibilities are collective and universal, even if unevenly distributed across the world.

After significant advocacy by poorer countries and civil society, the FIF is designed to embody a more equitable and balanced model of governance, with decision-making equitably distributed between wealthy donors and participating countries.

But the question now is whether this formal balancing of interests will become an operational reality. If low- and middle-income countries do not feel like they are in the driver’s seat of their own national PPR strategies, the FIF will quickly become an unwanted and cumbersome distraction.

This outcome is even more likely if there is little money on offer. Unfortunately, so far, FIF pledges total only $1.4 billion, or about one tenth of the annual PPR financing needs, according to the World Bank.

Worse still, there is no guarantee that this funding will be sustained over the long term, as evidenced by the current struggles of the Global Fund, the Coalition for Epidemic Preparedness Innovations and other institutions to replenish their funding.

The Access to COVID-19 Tools (ACT) Accelerator – which hosts the COVAX Global Vaccine Access Center – still has a funding shortfall of $15.2 billion for the 2022-23 fiscal year.

The lukewarm global response to the initial funding surge from the FIF – much of which appears to be cannibalized by other major global health funds – does not bode well for the future.

Moreover, while raising funds from myopic wealthy countries has not been a problem, the IFF is designed to target only a small portion of global PPR funding needs.

One major area it lacks is national health systems. These are crucial to implementing effective responses to the pandemic, but even the most advanced health systems are now struggling to keep pace with COVID-19.

For example, long-standing global immunization programs are now showing shortfalls, increasing the vulnerability of millions of children to infectious diseases.

And COVID-19 has diverted money from essential public health priorities like the fight against HIV/AIDS – a huge challenge in itself that also increases vulnerability to COVID-19 and other diseases.

The success of the FIF’s PPR efforts requires a massive increase in funding for health systems in low- and middle-income countries, well beyond the relatively meager and narrowly targeted $1.4 billion, and approaches more comprehensive and creative to expand the fiscal space of the poorest countries. invest in health.

For example, under the dynamic leadership of Prime Minister Mia Mottley, Barbados is set to become the first country to include a “pandemic clause” in its sovereign bonds, allowing it to suspend debt repayments in the event of a pandemic.

This innovation reflects the natural disaster clause it introduced in its recent debt restructuring, following a series of devastating hurricanes.

Given today’s unprecedented levels of debt – which have been compounded by inflation, food insecurity and weather-related disasters – such clauses are a no-brainer. Low- and middle-income countries should start adopting them en masse.

For its part, the International Monetary Fund must take the lead in developing a more ambitious debt-for-health swap mechanism, so that countries do not have to choose between buying essential medicines and reimbursing US hedge funds and Europeans.

And it goes without saying that the IMF must move away from its arbitrary and devastating austerity programs, which constantly force countries to cut public spending and keep money in reserves, even when faced with totally destabilizing climatic, health and socio-economic crises.

An inclusively governed and well-funded FIF could make decisive strides in preparing the world for the next pandemic, but only if accompanied by major reforms to the framework for financing global health initiatives.

Without broader and immediate resources and relief efforts to stabilize the economies of low- and middle-income countries, the IFF risks becoming a band-aid on a gunshot wound.

Mariana Mazzucato, founding director of the UCL Institute for Innovation and Public Purpose, is chair of the World Health Organization’s Council on the Economics of Health for All.

Copyright: Project Syndicate, 2022.