Global institutions must act urgently and decisively to tackle Covid-19
The coronavirus (Covid-19) outbreak is not just a public health crisis, and it’s rapidly becoming a global crisis – of health, economics and politics.
Italian shoppers outside a supermarket with empty trolleys. It's not an image we automatically associate with a global public health crisis. But when these pictures, from the quarantined Lombardy town of Casalpusterlengo, led news reports earlier this week, it captured something infectious disease researchers, like me, have been struggling to express clearly. It is that epidemics like Covid-19 are so much more than just a public health crisis. Like the worst financial crashes, they are global events, which can impact every sector of society all at once.
For the people of Lombardy and Veneto – and those of Daegu in South Korea, and Wuhan and many more towns and cities in China – fear of falling ill is just the start. With quarantine, or even containment tactics that do much less to infringe civil liberties, the social disruption is everywhere. The supermarket with empty shelves. The trains that don’t run. The shuttered workplace. The children sent home from school. The features of normal life we take for granted turned upside down.
These social impacts feed economic ones and have sent most of the world’s major stock exchanges sharply downwards in the past few days. Cruise ships, prisons, hotels and villages in one part of the world could just as easily be care homes, schools, work places or refugee camps in another. Even with scientists’ best estimates, it is near-impossible to predict whether this virus will stay with us long-term, or, like the SARS outbreak in 2003, will burn out.
What can we do to curb this wider societal contagion?
In the past month, governments around the world have stepped up public health responses, from airport screenings and quarantining potential cases on the return from affected areas, to finding extra capacity for national health services. These actions have been crucial to reducing and delaying the spread of this virus – because, as yet, we have no vaccine or proven treatment. Communities, particularly in China, have paid a heavy price, but have bought the rest of the world critical time.
What more, then? I believe our greatest weapon against uncertainty and panic is trust, which in much of the world is at a historic low. To regain it, our global powers, including the World Bank, International Monetary Fund (IMF), and leaders of the G7 and G20, must make decisions that demonstrate they see this as a global crisis, and continue the current containment approach while also preparing for the worst. Three key pieces of insight should help kickstart action.
First, agreement that the chances of this becoming something that we can’t contain are uncomfortably high and acting as if this is a certainty is now our best bet. Second, decisions must keep pace with this epidemic, which means coordinated action should be adapted as needed on an almost daily basis. Third, and as the residents of northern Italy and South Korea already know, recognising that the possible impact of coronavirus is far beyond a health emergency – it’s a global crisis with the potential to reach the scale of the global financial crisis of 2008.
Then, global financial institutions such as the IMF and World Bank were admirably swift to act. They did what the world needed – and while negative consequences couldn’t be avoided, the immediate impact was to some extent mitigated. These same institutions can no longer stand by in the face of a crisis that is no less threatening. They are designed to be the world’s insurance policy and they must release the significant funds they hold without hesitation.
Anything less than an urgent initial commitment of $10 billion from the World Bank leaves us at risk of much greater costs later and long-term catastrophe. The sums are considerable. The decision to release funds should not be taken lightly, but the stakes could not be higher. Economists have previously warned that even a moderately severe pandemic could knock 4-5% off global output.
The investment should be used to bolster the public health response in the most vulnerable countries, coordinated through the World Health Organization, and to develop diagnostics, treatments and vaccines. If Covid-19 burns out, then the hours and money spent on our response will not have been wasted but will represent a crucial investment in global health.
Likewise, the IMF needs to ensure it allocates appropriate capital to support central banks across the world. The economic impact of an epidemic can be devastating, particularly on low- and middle-income countries and small businesses. When SARS spread through Asia in 2003, it cost the world economy $60 billion in less than a year. The Ebola epidemic of 2014-15 more than halved Liberia’s GDP growth that year. Maintaining access to credit while we weather the storm is vital.
Those with wealth and power must ensure that no country is left behind, particularly those with vulnerable health care systems and fragile economies. This is not just a public health crisis, it’s rapidly becoming a global crisis – of health, economics and politics. The best of the world’s multilateral financial and political institutions need to ask themselves what they can do to help avert it, and how they can build trust in themselves in the process. The world needs these institutions to act urgently and decisively.