## Rethinking Multilateralism for a Pandemic Era ## Source details **Canonical URL:** [Rethinking Multilateralism for a Pandemic Era](https://www.imf.org/-/media/files/publications/fandd/article/2021/december/okonjo-tharman-summers.pdf) ## Other formats - [Markdown version](/-/media/files/publications/fandd/article/2021/december/okonjo-tharman-summers.pdf.md) - [Structured JSON version](/-/media/files/publications/fandd/article/2021/december/okonjo-tharman-summers.pdf.json) --- ### Pandemic context and failures - The world is "nowhere near the end of the pandemic." Delta will not be the last highly transmissible variant; large unvaccinated groups and unchecked spread raise the prospect of further mutations. - COVID-19 has revealed collective failure to heed scientific advice and invest in pandemic prevention and preparedness. - Official data put the number of deaths at over 5 million; credible unofficial estimates are a multiple of that number. - The world has experienced the deepest economic contraction since World War II and a significant rollback in progress in education, poverty eradication, and inclusive development for a large swath of its population. - The IMF has projected large cumulative losses in global GDP by 2025, with particular impact on the developing world. ### Gaps in global public goods and required investments - The current system of global health security is too fragmented, overly dependent on discretionary bilateral aid, and dangerously underfunded. - Core needs identified include: - A massively scaled-up network of genomic surveillance integrating national, regional, and global capabilities to detect and share information on pathogens and their genome sequences. - Closing long-standing gaps in core healthcare capacities within nations to address emerging and endemic infectious diseases and comorbidities. - Building global development, manufacturing, and delivery capacity for vaccines and other vital materials in a globally distributed ecosystem that can pivot rapidly in a crisis. - Costed investment estimates and targets: - Many developing economies will need to spend an additional 1 percent of GDP, at least over the next five years, to strengthen public health systems and core capacities. - The G20 High-Level Independent Panel (HLIP) estimated the world needs, at an absolute minimum, additional international investments of $15 billion a year in global public goods for pandemic prevention and preparedness. - The G20 HLIP proposed a multilateral financing mechanism aimed at mobilizing at least $10 billion a year from the international community to cover a large share of additional international financing needed for global health security. - There is a $23 billion shortfall needed to get jabs into arms and provide test kits and other medical supplies. ### Institutional reforms and roles - Strengthen the World Health Organization (WHO): - Put the finances of the WHO on a more secure multilateral footing and empower it to perform core roles more effectively. - A reformed and strengthened WHO must be central to pandemic security, surveillance of global health emergencies, and identifying gaps in national core capacities under the International Health Regulations. - Repurpose the international financial institutions (IFIs): - Update the mandates of the IMF and World Bank for an era when threats to the global commons are paramount alongside poverty alleviation and inclusive growth. - IFIs should work closely with regional development banks and global health organizations to incentivize investments in global public goods. - Multilateral development banks should pivot business models toward mitigating risk (e.g., risk guarantees and credit-enhancement tools) rather than primarily direct lending, to mobilize private capital and transform global savings into development finance. - The IFIs must formalize and improve crisis-response mechanisms developed during COVID-19 to deploy resources at a much larger scale and more swiftly when necessary. - Recent actions noted include a $650 billion general allocation of Special Drawing Rights (SDRs) among IMF members, and efforts to channel excess SDRs to vulnerable countries via the Poverty Reduction and Growth Trust, among other ways. - Strengthen shareholders and capital frameworks: - Shareholders must make timely replenishments of grants and capital for IFIs and enable them to disburse much more money in a pandemic, faster and with less elaborate conditions. - Support a new capital adequacy framework for multilateral development banks that recognizes their preferred creditor status and very low default experience and enables enhanced leverage without compromising triple-A ratings. ### Proposed multilateral financing mechanism and governance - Establish a new multilateral financing mechanism to reduce fragmentation and mobilize sustained funding for global health security: - The G20 HLIP recommends this mechanism mobilize at least $10 billion a year and be most practically structured as a financial intermediary fund hosted at the World Bank, which would act as trustee. - This mechanism should provide roughly two-thirds of total additional international financing needed for global health security and act as an integrator—funding existing institutions and networks rather than becoming an implementation agency on the ground. - Resources mobilized must add to, and not substitute for, existing official development aid for global public health and other priorities and should catalyze private, philanthropic, and bilateral funding. - Funding burden and affordability: - When spread across a large number of countries on a fair and equitable basis, contributions translate to barely 0.02 percent of the GDP of most countries, or less than 0.1 percent of annual government budgets. - Governance architecture: - Create a board that brings health and finance ministers together within an inclusive G20-plus group, with adequate representation from developing economies, including the African Union. - Include the WHO, World Bank, IMF, and World Trade Organization in an ex officio capacity. - Support the board with a permanent, independent secretariat hosted by the WHO and drawing on expert resources of major international organizations. ### Global supply capacity and trade rules - A globally distributed development, manufacturing, and delivery ecosystem must be kept in use in normal times and be able to pivot swiftly to produce pandemic-specific medical countermeasures. - The private sector has little incentive to invest in “ever-warm” supply capacity at required scale without a major public-private investment initiative. - Coordination among agencies such as BARDA, HERA, and the African Vaccine Alliance, working closely with the private sector, is necessary. - Establish clear global rules to keep supply chains open in a pandemic and to tackle export restrictions and trade bottlenecks quickly. ### Urgency, political feasibility, and next steps - The window for action is narrow; political impetus may fade once the worst of the pandemic is past in the richest countries. - Repairing distrust of the global system in developing regions that had little access to lifesaving supplies is urgent; failure to reverse this trust deficit will hinder responses to climate change, future pandemics, and other global problems. - The Joint Finance-Health Task Force initiated by G20 Leaders on October 31, 2021, should be the first step toward establishing the new multilateral financing mechanism and the coordinating board. - The task force should seek to bridge differences pragmatically and achieve consensus by early 2022. - The collective actions proposed aim to avert much larger future human and economic costs and are framed as both economically and politically necessary and morally required. *Ngozi Okonjo-Iweala; Tharman Shanmugaratnam; Lawrence H. Summers — cochairs of the G20 High Level Independent Panel on Financing the Global Commons for Pandemic Preparedness and Response.* --- _Source: https://www.imf.org/-/media/files/publications/fandd/article/2021/december/okonjo-tharman-summers.pdf_