Rethinking Multilateralism for a Pandemic Era
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- Authors: NGOZI OKONJO-IWEALA, THARMAN SHANMUGARATNAM, LAWRENCE H SUMMERS
- Published: December 2, 2021
Pandemic risks and systemic failures
- Delta will not be the last highly transmissible variant; large unvaccinated groups and unchecked spread raise the prospect of further mutations that could evade today’s vaccines.
- COVID-19 is a forerunner of more, and possibly worse, pandemics to come; infectious disease threats, together with dwindling biodiversity and the climate crisis, represent the primary international challenge of our times.
- 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; the IMF has projected large cumulative losses in global GDP by 2025, with particular impact on the developing world.
- Collective failure to heed scientific advice and invest in pandemic prevention and preparedness has inflicted catastrophic human and economic costs and caused significant rollback in education, poverty eradication, and inclusive development.
Immediate priorities to end today’s pandemic
- Rich nations must:
- Make good on pledges to donate their projected substantial surplus vaccines.
- Provide grants to bridge the $23 billion shortfall needed to get jabs into arms and provide test kits and other medical supplies.
- These measures are framed as a small price to shorten the pandemic everywhere and reduce the risk of further mutations.
Investments and capacities required
- A fundamental reset is needed: the current global health security system is too fragmented, overly dependent on discretionary bilateral aid, and dangerously underfunded.
- Core capacity gaps identified by the G20 HLIP include:
- A massively scaled-up genomic surveillance network integrating national, regional, and global capabilities to detect and share pathogen information and accelerate medical countermeasure development.
- Closing long-standing gaps in core health care capacities within nations to thwart emerging and endemic infectious diseases and mitigate comorbidities.
- Financial requirements:
- 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.
- Enhanced external grant support is required for investments in lower-income countries that are in the nature of global public goods.
- Using WHO, McKinsey & Co., and other estimates, the G20 HLIP estimated at an absolute minimum additional international investments of $15 billion a year in global public goods to avoid future pandemics.
- The expected social returns on these collective investments are described as immense.
Global supply capacity and public-private investment
- Need for a globally distributed development, manufacturing, and delivery ecosystem for vaccines and other vital materials that:
- Is kept in use in normal times and can pivot swiftly in a pandemic.
- Prevents producing nations from prioritizing national needs at the expense of global needs.
- Private sector incentives are insufficient to invest in an “ever-warm” supply capacity at the required scale; a major public-private investment initiative is therefore necessary.
- This initiative requires tightly coordinated networks across global health organizations and national/regional agencies (examples named in the source: BARDA, HERA, African Vaccine Alliance) collaborating closely with the private sector.
- Clear global rules are needed to keep supply chains open in a pandemic and to tackle export restrictions and trade bottlenecks quickly.
Strategic multilateral reforms recommended by the G20 HLIP
- Three strategic shifts to enable proactive financing of global health security:
1. Strengthen the WHO:
- Put the finances of the WHO on a more secure multilateral footing and empower it to perform core roles more effectively.
- WHO is central to surveillance of global health emergencies and identifying gaps in national core capacities under the International Health Regulations.
2. Repurpose the international financial institutions (IFIs):
- Update mandates of the IMF and World Bank for an era where threats to the global commons are primary challenges.
- IFIs should work closely with regional development banks and global health organizations to incentivize investments in global public goods.
- Pivot multilateral development banks’ business models toward mitigating risk rather than direct lending to mobilize private capital, using their triple-A ratings, risk guarantees, and other credit-enhancement tools.
- The IMF and World Bank should improve and formalize crisis-response toolkits developed during COVID-19 to deploy resources at much larger scale and more swiftly.
- Following the $650 billion general allocation of Special Drawing Rights (SDRs), the IMF is working with wealthier countries to channel excess SDRs to vulnerable countries via the Poverty Reduction and Growth Trust, among other ways.
- Shareholders must make timely replenishments of grants and capital and support a new capital adequacy framework for multilateral development banks to enable enhanced leverage without compromising triple-A ratings.
3. Establish a new multilateral financing mechanism for global health security:
- Current fundraising is fragmented, complex, unpredictable, and inadequate; a new mechanism would mobilize at least $10 billion a year from the international community.
- Practical form: a financial intermediary fund hosted at the World Bank, acting as trustee.
- The new mechanism would provide about two-thirds of total additional international financing needed for global health security and act as an integrator funding existing institutions and networks rather than an implementation agency.
- Resources must add to, not substitute for, existing official development aid for global public health and other priorities, and should catalyze funding from private, philanthropic, and bilateral sources.
- Funding should be based on pre-agreed contributions from all countries; when spread across many 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, coordination, and timeline
- Better governance is required to bring finance and health decision-makers together:
- A proposed board bringing health and finance ministers together within an inclusive G20-plus group, with adequate representation from developing economies (including the African Union), and ex officio WHO, World Bank, IMF, and World Trade Organization participation.
- A permanent, independent secretariat hosted by the WHO, drawing on expert resources of major international organizations, should support the board.
- Urgency and narrow window for action:
- The window for bold change is narrow; impetus for reform may fade once the worst of the pandemic passes in richest countries.
- Failure to reverse distrust in the global system among developing regions that had little access to lifesaving supplies will have lasting consequences for 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 consensus by early 2022.
Source: Rethinking Multilateralism for a Pandemic Era — NGOZI OKONJO-IWEALA; THARMAN SHANMUGARATNAM; LAWRENCE H. SUMMERS (December 2021).
Content in this bundle
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- Rethinking Multilateralism for a Pandemic Era
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