BIZweek n°372 10 déc 2021
BIZweek n°372 10 déc 2021
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  • Parution : n°372 de 10 déc 2021

  • Périodicité : hebdomadaire

  • Editeur : Capital Publications Ltd

  • Format : (260 x 370) mm

  • Nombre de pages : 9

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  • Dans ce numéro : le variant omicron en Afrique du Sud.

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VENDREDI 10 DÉCEMBRE 2021 BIZWEEK ÉDITION 372 That will require a tightly coordinated network of global health organizations and national and regional agencies—such as the Biomedical Advanced Research and Development Authority (BARDA) in the United States, the Health Emergency Preparedness and Response Authority (HERA) in Europe, and the African Vaccine Alliance—collaborating closely with the private sector. Equally, we need clear global rules to keep supply chains open in a pandemic and ensure that export restrictions and trade bottlenecks are tackled quickly. To plug these key gaps in global public goods, we must invest collectively on a scale much larger than we have been willing to in the past. Using the best cost estimates by the WHO, McKinsey & Co., and other sources, the G20 HLIP estimated that the world needs, at an absolute minimum, additional international investments of $15 billion a year in these global public goods to avoid future pandemics. This is a doubling of current levels, but COVID-19 demonstrates that the costs of a pandemic are several hundred times greater. The expected social returns on these collective investments are immense. However, to succeed in averting the next pandemic, we must strengthen multilateralism. That cannot be achieved with incremental changes to existing mechanisms, which have failed to prevent and respond decisively to the current pandemic. We need major renovation and replenishment of both individual institutions and the global health architecture. The G20 panel has advocated three strategic shifts to enable proper and proactive financing of global health security. First, we must put the finances of the WHO on a more secure multilateral footing and empower it to performits core roles more effectively. There is no solution to pandemic security that does not involve a reformedand strengthened WHO at its center. It plays the lead role in the surveillance of global health emergencies and in identifying gaps POST SCRIPTUM in the national core capacities set out in the International Health Regulations. It is also integral to the international coalition of health partners that must develop a globally distributed, end-to-end supply ecosystem for medical countermeasures. Second, we must repurpose the international financial institutions (IFIs) for a new era. The IMF and World Bank were created at the end of World War II to assist countries with economic reconstruction or when they ran into financial difficulties of their own. The World Bank’s success led to the establishment of the other regionally based multilateral development banks. Collectively, the IFIs are unique international institutions with the ability to multiply the impact of finance in ways that will be critical in the decades ahead. They leverage the resources of their shareholders in the capital markets, induce domestic funding and policy reforms by governments, and help catalyze private sector investments. Yet the mandates of the Bretton Woods institutions must beupdated for an era when the largest challenges facing countries lie in threats to the global commons, even as poverty alleviation and inclusive growth remain critical priorities. The IMF and World Bank must work closely with regional development banks and other international players, including global health organizations, to incentivize lowerincome countries and regions to invest in the public goods needed to address these threats. The business models of the World Bank and other multilateral development banks must also pivot toward mitigating risk rather than direct lending, so as to mobilize private capital and transformglobal savings into development finance. The potential for doing so has long been recognized, given the banks’triple-A credit ratings and scope for using risk guarantees and other credit-enhancement tools and that most developing economies now have access to capital markets to finance infrastructure. However, progressin moving away from a lending-based model has been slow. A bolder move is now required to use their resources more optimally to support investments in global public goods. The IFIs must also play lead roles in international financing of the response to pandemics. The IMF and World Bank have designed programs and streamlined processes during COVID-19 to enable more flexible disbursement of funds. Following the recent $650 billion general allocation of Special Drawing Rights (SDRs) among its members, the IMF is also actively working with wealthier countries to channel excess SDRs to those that are more vulnerable via the Poverty Reduction and Growth Trust, among other ways. However, the whole process for an SDR allocation to be approved, and subsequently deployed to countries most in need, takes time. Several other mechanisms were also developed or enhanced in the midst of the pandemic. The IFIs must now improve and formalize them as part of their crisis-response toolkits so they can deploy resources at a much larger scale and more swiftly when necessary. The shareholders of these key institutions must themselves adapt to the challenges of a new era. They must make timely replenishments of the grants and capital needed by the IFIs and ensure that the greater focus on global public goods does not come at the expense of spending on education, social protections, and other development priorities. They must also enable the IFIs to put out much more money in a pandemic, much faster and with less elaborate conditions, just as their treasuries and central banks became major lenders and investors of first resort in their own countries. Shareholders should also support a new capital adequacy framework for the multilateral development banks, one that recognizes their preferred creditor status and very low default experience and enables enhanced leverage without compromising their triple-A ratings. Recommendations for doing so were made by an earlier G20 eminent persons group. The recent review initiated by the Italian G20 presidency is an 6 Cont’d on page 7
VENDREDI 10 DÉCEMBRE 2021 BIZWEEK ÉDITION 372 WINTER 2021 : THE HEALTI-1 ISSUE F igen311:MitORVIENT te Re tbinkng i Multitateralism for a Pandemic Era IncrementaE change within existing trechanisms has failed ; vie need a fundarnentaE resetPOST SCRIPTUM B'NGOZI 0KONJO-1W EALA.. THARMAN SHA N MUGARATNAM.. AND LAR RY su rYtiM ERS important step in the right direction. Overcoming fragmentation Third, besides strengthening the WHO and repurposing the IFIs, we must establish a new multilateral financing mechanism for global health security. Currently, fundraising for this purpose is fragmented, based on the different mandates of the various global health organizations, and largely dependent on discretionary bilateral and philanthropic aid. The result is a nonsystem of complex, unpredictable, and greatly inadequate funding for global public goods. The G20 HLIP has therefore proposed establishing a multilateral financing mechanism aimedat mobilizing at least $10 billion a year from the international community. It would be most practical for this to take the formof a financial intermediary fund hosted at the World Bank, which would act as trustee. At twothirds of total additional international financing needed for global health security, the new mechanism would provide a muchneeded layer of multilateral support on top of today’s siloed landscape. However, it is critical that resources mobilized for this new financing mechanism add to, and not substitute for, existing official development aid for global public health and other priorities. It should also be designed to catalyze funding from private, philanthropic, and bilateral sources. Importantly too, the new mechanism should not be an implementation agency on the ground. It should instead fund existing institutions and networks and prioritize or reprioritize allocations across the system based on the most pressing needs of the time. This will enable it to serve as an integrator rather than become a new silo that only furthers fragmentation. Funding for this multilateral mechanism should be based on pre-agreed contributions from all countries, similar to the way nations periodically provide fresh funds to the International Development Association. When spread across a large number of countries on a fair and equitable basis, the contributions translate to barely 0.02 percent of the GDP of most countries, or less than 0.1 percent of annual government budgets. This is entirely affordable. Greater and more sustained funding also requires better governance. Governance of global health itself rests with the WHO and its decision-making body, the World Health Assembly. What is missing is a mechanism that brings finance and health decision-makers together to govern and mobilize funding of global health security. We believethat a board that brings health and finance ministers together within an inclusive G20-plus group will fill that need most effectively. It should have adequate representation from developing economies, especially the inclusion of the African Union. The WHO, World Bank, IMF, and World Trade Organization should be included in an ex officio capacity. A permanent, independent secretariat hosted by the WHO and drawing on the expert resources of the major international organizations should support the board. Narrow window Rethinking multilateralism has never been more urgent. The window for action is narrow. As the experience of earlier crises shows, the impetus to make bold change will fade once we are past the worst of the pandemic in the richest countries. We must also act urgently to repair the deep and growing distrust of the global system in developing regions that have had little access to lifesaving supplies. Failure to reverse this trust deficit will have lasting consequences. It will make it very difficult to address climate change, future pandemics, and other problems in a dangerous world. 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 board required for effective coordination and stewardship of funding for global health security. The task force should seek to bridge differences pragmatically and achieveconsensus by early 2022. The collective actions we propose are critical to future human security everywhere. They willalso help avert the much larger costs that nations will incur in future global health crises. It would be both economically and politically myopic, and morally indefensible, to wait for the next pandemic to overwhelm us. 7

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