IMF PUSHES FOR MORE UNIFIED GLOBAL STRATEGY VS COVID-19

Many countries have stepped up in the global fight against the pandemic, as have institutions such as the World Health Organization, the World Bank, Gavi (the Global Alliance for Vaccines and Immunization), the African Union, and others.

Yet, more than a year into the COVID-19 crisis, new cases worldwide are higher than ever and for this urgent action is needed to arrest the rising human toll and economic strain, according to the International Monetary Fund.

As the IMF has warned, economic recoveries are diverging dangerously. The disparities will widen further between wealthy countries that have widespread access to vaccines, diagnostics, and therapeutics, and poorer countries still struggling to inoculate frontline healthcare workers.

As of the end of April 2021, less than two percent of Africa’s population had been vaccinated. By contrast, over 40 percent of the population in the United States and over 20 percent in Europe had received at least one dose of the vaccine.

It is well understood that there can be no lasting end to the economic crisis without an end to the health crisis. Pandemic policy is thus economic policy. It is critical for global macroeconomic and financial stability, which makes it of fundamental importance to the IMF and other economic institutions. Ending the pandemic is a solvable problem but requires further coordinated global action.

The latest research by IMF staff analyzes multiple dimensions of the fight against the pandemic and proposes realistic targets to bring the pandemic substantially under control everywhere—and the means to achieve them.

Building on the work of other agencies, the proposal aims to vaccinate at least 40 percent of the population in all countries by the end of 2021 and at least 60 percent by the first half of 2022; track and insure against downside risks; and ensure widespread testing and tracing, maintain adequate stocks of therapeutics, and enforce public health measures in places where vaccine coverage is low.

Importantly, the strategy requires not just commitments but upfront financing, upfront vaccine donations, and “at-risk” investment for the world to insure against downside scenarios.

The proposal’s total cost of around $50 billion would include grants, national government resources, and concessional financing. There is a strong case for grant financing of at least $35 billion.

The good news is G20 governments have already identified as important to address the $22 billion grant funding gap noted by the Access to COVID-19 Tools (ACT) Accelerator. This leaves an estimated $13 billion in additional grant contributions needed.

The remainder of the overall financing plan—around $15 billion—could come from national governments, potentially supported by COVID-19 financing facilities created by multilateral development banks.

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