International Financing Round Table Message

Ending the present pandemic and investing for the future

19 May 2021

On 19 May 2021, the Co-Chairs of the Independent Panel for Pandemic Preparedness and Response, the Rt. Hon. Helen Clark (former Prime Minister of New Zealand) and H.E. Ellen Johnson Sirleaf (former president of Liberia) together with H.E. Magdalena Andersson (Minister of Finance) on behalf of the Government of Sweden, and H.E. Nirmala Sitharaman (Minister of Finance) on behalf of the Government of India, convened a Round Table discussion focused on ‘ending the present pandemic and investing for the future’. Together with:

  • Fahad Almubarak – Governor, Saudi Central Bank 
  • Gordon Brown – former Prime Minister and Chancellor of the Exchequer, the United Kingdom  
  • Mauricio Cárdenas – Independent Panel member and former Minister of Finance, Colombia  
  • Mathias Cormann – Incoming OECD Secretary General, former Minister of Finance, Australia 
  • Jim Yong Kim – Vice Chairman and Partner, Global Infrastructure Partners former President of the World Bank 
  • Jan Tore Sanner – Minister of Finance, Norway 
  • Tharman Shanmugaratnam – Co-Chair, G20 High-level Independent Panel on Financing the Global Commons for Pandemic Preparedness and Response; Senior Minister Singapore & Coordinating Minister for Social Policies
  • Vera Songwe – Executive Secretary, UN Economic Commission for Africa

The Co-Chairs presented the findings of the Independent Panel, on how the current international system failed to protect people from a devastating pandemic, and why the system is not fit to prevent a future one. Participants reflected on how COVID-19 outbreak became a pandemic, and how a pandemic triggered a societal crisis, widening inequities and harming the most vulnerable people in our societies.

We are nowhere near the end of COVID-19, but we’re also far from having a system that can prevent a repeat of a pandemic of this scale, and the colossal human and economic costs that we’ve seen. It will require proactive, predictable, sustainable funding streams into the future, beyond today’s emergency responses.” 
Tharman Shanmugaratnam, Co-Chair, G20 High-level Independent Panel on Financing the Global Commons for Pandemic Preparedness and Response; Senior Minister, Singapore

Those present acknowledged that the pandemic is far from over   ̶   it is still killing more than 10,000 people every day. People in many countries continue to suffer successive waves of infection; hospitals have again filled with COVID-19 patients, and families are losing loved ones. 

They reflected on the fact that an assessment of the full economic toll taken by the COVID-19 pandemic will take years to emerge, but the numbers already apparent from 2020 are stark: the global economy shrank by 4.3 percent, with a potential cost of more than US$10 trillion in lost output. That figure is expected to grow to about US$22 trillion in the period 2020-2025. The secondary impacts on individuals’ mental health and wellbeing also take a significant economic toll, estimated at US$1.6 trillion in the USA alone. Curbing pandemics is not only good health policy but also good economic policy.

Participants agreed on the need for immediate measures to curb transmission, and to begin work now to strengthen preparedness by investing billions now to save trillions in the future.

“The COVID-19 pandemic crisis gives us an unprecedented opportunity to build back better – better global collaboration and multilateralism; a more efficient global healthcare system; more effective, transparent and accountable global surveillance systems for early detection of pathogens to enable rapid decision making and better outbreak management.” 
Nirmala Sitharaman, Minister of Finance, India 

The meeting discussed specifically the Panel’s recommendations relating to vaccines, and the financing aspects of pandemic preparedness and response with the objective of preventing future outbreaks becoming pandemics and ensure that, if a pandemic occurs, it does not become a global economic and societal crisis.

 Vaccines are, without a doubt, the light at the end of the tunnel.” 
Magdalena Andersson, Minister of Finance, Sweden

Discussion on vaccines focussed on the current inequities in access, and on vaccination as a key tool, both to save lives and enable economies to recover. The Panel’s recommendations regarding the need for urgent scale-up of manufacturing capacity were discussed, as was the need for voluntary licencing and technology transfer. Discussions also included the urgent need to equitably share not only funding for vaccines, but also doses.

“We need to take preparation for such pandemic events more seriously moving forward, working together on a multilaterally coordinated basis…and we need to press ahead with an all-out effort to reach the entire world population with vaccines as soon as possible. This is not just about charity from the better-off economies of the world, this is also about sustained protection.” 
Mathias Cormann, incoming Secretary General of OECD and former Minister of Finance, Australia 

There was interest to continue discussions on moving to a long-term model of formula-based financing for global public goods based on ability to pay. This is an investment in a global good and pooling resources that all benefit from, rather than an act of charity. In the short term there is an urgent need to close the US$19 billion funding gap for ACT-A.

Collective actions – prevention, preparation and early intervention – are the only way to avoid the brutal injustices of today – and a world already cruelly divided between rich and poor further divided, and perhaps irreparably, between the vaccinated and the unvaccinated, the protected and the unprotected, and the prepared and the unprepared… Good intentions need to be financed.” 
Gordon Brown, former Prime Minister and Chancellor of the Exchequer, United Kingdom

Participants reflected on the fact that COVID-19 has caused a crisis so deep and wide that leaders must urgently embrace the need to transform the way in which the world prepares for and responds to global health threats. The international system for pandemic preparedness and response requires fundamental change, catalysed by global political leadership at the highest level, including by those gathered at this Round Table.

It is urgent to agree on an institutional setup to prevent and be better prepared for future pandemics. We must also agree on a predictable and sustainable model for fair and collective financing … Time is of the essence – we must use the current momentum to ensure progress.  2021 needs to be a year of decisions and actions, both for the short term and for the longer term to increase health security for all.” 
Mr Jan Tore Sanner, Minister of Finance, Norway

The participants recognized that the extent of economic impact of the pandemic on individuals is directly related to the extent of social protections. If economic downturns result in job losses, and if health insurance is tied to employment, then the results can be catastrophic. If precarious employment conditions leave workers without access to sick leave, then transmission will increase. The risk is the creation of a pandemic inequality feedback loop; investments in universal health coverage and social protection are a key component of pandemic preparedness and response. 

Those present acknowledged that structural and pre-COVID-19 conditions influenced pandemic outcomes, including the availability of economic impact mitigation options. Countries that had experienced similar pathogens in the past such as MERS and SARS were often better prepared for the current pandemic. A country with a larger fiscal space to manoeuvre had better ability to stimulate the economy. Countries with nimble public health responses were able to control epidemic spread more readily. The combination of the two put countries in the best position.

Discussions on the current system of pandemic financing recognised that funding was often too little and too late, but that burden sharing was potentially the best insurance policy in the world. The potential use of special drawing rights (SDR) of the IMF was discussed. There was acknowledgement that if funds were distributed more equitably they could provide greater benefit.  Participants explored how to guarantee long term investments in the future, with investment in preparedness, and more and faster financing available in the event of a crisis. 

Those present were positively receptive to the need for a new financing facility to invest in both preparedness and to disburse necessary funds at scale in times of crisis. Participants reflected on the lessons from pandemic bonds in the current crisis, and lessons from financing for disaster risk reduction. It was agreed that we do not need a new institution and that existing institutions could be used better. There was further work to be done to explore where such a facility could be hosted, and how its work might be aligned with international financing institutions and regional development banks. 

Finance Ministers and Central Bank Governors, through their leadership of all the International Financial Institutions, must now step up and play a central role in ensuring that this pandemic is indeed the last one. The IFIs, working with WHO and the entire UN system, can ensure that every country in the world has adequate financing to fight COVID-19 and are prepared to prevent future pandemics.” 
Jim Yong Kim, Vice Chairman and Partner, Global Infrastructure Partners; former President of the World Bank

Pandemic preparedness and response must be a priority for national investments. Those present discussed how to incentivise investments including the potential use of Article 4 IMF consultations, given that pandemics pose a significant risk to global financial stability. This would require close cooperation between IFIs, including regional financing institutions and technical expertise from organizations such as the WHO.

Participants recognised the importance of high-level leadership for pandemic preparedness. The idea of a Global Health Threats Council to close the current gap was explored. There was also reflection on the success of the G20 Financial Stability Board in responding to the 2008 financial crisis. The idea of a ‘Health Stability Board’ was floated, and that the Global Health Threats Council could potentially serve that function.

We need to establish a global ‘Health Stability Board’ to work as the Financial Stability Board.” 
Fahad Almubarak, Governor, Saudi Central Bank

In concluding, those present acknowledged the importance of further dialogue with and within relevant institutions, specifically on both financing and scaling up access to vaccines, diagnostics and therapeutics.

The President of the UN General Assembly could call on the UN Secretary General to convene a Special Session before the end of the year to support a reform agenda in a political declaration. Meanwhile, given the current urgency of the situation and given that a significant proportion of the necessary finance would need to come from G7 and G20 economies, the opportunities presented by their upcoming summits should also be capitalized upon as, ultimately, good intentions need to be financed.

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