May 24, 2020

The Rich World’s Pandemic Imperative


Trustworthy and indepth news stories are more important now than ever.
Support our newsroom by MAKING A CONTRIBUTION HERE

While the advanced economies reckon with the costs of the COVID-19 lockdown phase, developing and emerging economies are facing an even deeper disaster. Without more coordinated multilateral support for indebted countries’ budgets and health systems, the world will never overcome the pandemic.

TOPSHOT – Staff members of the Kenyan Red Cross deliver hand disinfectants to residents to curb the spread of the COVID-19 coronavirus at Mathare slum in Nairobi, Kenya, on May 1, 2020. (Photo by Patrick Meinhardt / AFP) (Photo by PATRICK MEINHARDT/AFP via Getty Images)

WASHINGTON, DC – COVID-19 has confronted the world with a horrific crisis. Because developing a vaccine will likely take at least a year, governments need to buy time to keep health-care facilities from being overwhelmed and to minimize the number of people who fall ill and die, not least by reducing the rate of new infections.

In rich countries, the arsenal has included social distancing, sheltering in place, shuttering nonessential businesses (or more telecommuting), and recommending or requiring face masks. Though the economic costs of these first-phase measures have been dreadful, they are preferable to the human and economic costs that would follow from letting COVID-19 spread unchecked. The second round of the fight can start when the numbers of new cases and deaths are flat or falling, and when testing and contact-tracing capabilities have been deployed widely enough to spot and contain potential outbreaks.

But the pandemic will never be under control as long as there are still rising infection rates elsewhere in the world. A viral contagion is like a wildfire: it takes only a few sparks to trigger a resurgence. No matter how rigorously rich countries try to prevent the virus from crossing their borders, there will always be enough leakages to cause a new outbreak. Thus, to combat the pandemic in the absence of a universally available vaccine, the virus also must be contained in poorer countries, all of which are woefully ill-equipped for the task.

After all, social distancing and sheltering in place are impossible in crowded urban areas with community wells and toilets, where many families live from hand to mouth on a day laborer’s pay. Even if they were enforceable, lockdowns in these situations would mean starvation for many people.

Moreover, most poor countries have inadequate health-care infrastructure (too few hospital beds, scarce personal protective equipment) and underfunded and understaffed public-health systems. They also lack the domestic resources to finance social programs, as well as the foreign-exchange reserves to import critically needed supplies and equipment. Many governments are already in dire fiscal shape, and cannot provide even minimal support for unemployed workers and their families.

Poorer countries thus have two overarching needs. First, they require additional support for their health systems, so that they can provide sufficient medical care to all who become infected. Otherwise, COVID-19 cases, not to mention the mortality rate, will grow – possibly exponentially. Second, most poorer countries need financing to avert widespread starvation and penury. While a few have at least some fiscal space to increase their expenditures, most do not.

Coordination among rich countries will be necessary to address both needs. So far, there has been some progress with respect to finance, but not nearly enough when it comes to addressing the health crisis.

In terms of finance, many developing and emerging economies already had stretched budgets and were borrowing to support economic growth prior to the pandemic. Argentina and Lebanon were experiencing deepening debt-servicing crises, and many other governments had become too indebted to be able to risk much more external borrowing.

To address this problem, the G20 has agreed to let 76 countries freeze repayment of bilateral sovereign debt until the end of this year, and has urged private creditors to do the same. At the same time, the International Monetary Fund has canceled six months of debt payments due from 25 countries, and made additional funds available for quick disbursement. And the World Bank and regional development banks have also committed additional resources to the effort.

The world clearly needs a better mechanism for addressing unsustainable sovereign debt, but that is a task for the future. During the ongoing crisis, there are proposals for a debt-servicing standstill, perhaps through an IMF facility. These measures would certainly provide more resources with which to limit the spread of the virus and prevent deeper humanitarian disasters. But closer coordination to support fragile public-health systems is also urgently needed.

assistance be allocated as efficiently as possible. That can be done only through careful coordination. If poorer countries are left reliant wholly on bilateral assistance, some will end up receiving more support than others, regardless of their needs.

Assisting poorer countries is not just the right thing to do; it is also the only way to contain the pandemic. We have never needed an effective WHO – or US leadership – more than we do now. The rich world should do itself a favor and permit no further delay in marshaling resources and assistance for low- and middle-income countries, which should be allocated through the WHO based on those countries’ health needs.

Anne O. Krueger, a former World Bank chief economist and former first deputy managing director of the International Monetary Fund, is Senior Research Professor of International Economics at the Johns Hopkins University School of Advanced International Studies and Senior Fellow at the Center for International Development at Stanford University.

The text has been adapted from Project Syndicate website

We can't do quality journalism without your support

Perhaps it goes without saying — but producing quality journalism isn't cheap. At a time when newsroom resources and revenue are declining, The Chronicles remains committed to "Serving Your Right To Know The Truth". Stand with us as we document Rwanda's remarkable journey for you and the future generation. Do you value our journalism? We can't do it without you. Show us with your support by CONTRIBUTING HERE.
Email your news TIPS to info@chronicles.rw or WhatsApp +250788351327.
You can also find us on Signal

28 Comments

  1. Usually I do not learn article on blogs, but I wish to say that this
    write-up very pressured me to check out and do it!
    Your writing taste has been surprised me. Thanks, very nice post.

  2. I savor, cause I discovered just what I was taking a look for.
    You’ve ended my four day lengthy hunt! God Bless you man. Have a great
    day. Bye

  3. Wow, marvelous blog layout! How long have you been blogging for?
    you made blogging look easy. The overall look of your web site is great, as well as the content!

  4. Oh my goodness! Incredible article dude! Thanks, However I am having difficulties with your RSS. I don’t understand why I cannot join it. Is there anybody having the same RSS issues? Anyone that knows the answer will you kindly respond? Thanx!!

  5. I am in fact glad to glance at this weblog posts
    which consists of lots of helpful facts, thanks for providing these
    kinds of statistics.

  6. Does your website have a contact page? I’m having trouble locating it but, I’d like to shoot you an email.
    I’ve got some creative ideas for your blog you might be interested in hearing.
    Either way, great blog and I look forward to seeing it
    develop over time.

  7. I know this if off topic but I’m looking into starting my
    own blog and was wondering what all is required to get set up?
    I’m assuming having a blog like yours would cost a pretty penny?

    I’m not very web savvy so I’m not 100% positive. Any recommendations or advice
    would be greatly appreciated. Kudos

  8. Someone essentially assist to make severely articles I would state.
    This is the first time I frequented your website page and thus far?
    I amazed with the research you made to create this actual publish extraordinary.
    Fantastic activity!

  9. I like the helpful information you provide in your articles.
    I’ll bookmark your blog and check again here regularly. I am quite sure
    I will learn many new stuff right here! Good luck for the next!

  10. Your style is really unique compared to other folks I’ve read stuff from. Many thanks for posting when you have the opportunity, Guess I’ll just book mark this web site.

  11. My partner and I absolutely love your blog and find many
    of your post’s to be what precisely I’m looking for.

    Do you offer guest writers to write content in your case?
    I wouldn’t mind producing a post or elaborating on many of the
    subjects you write related to here. Again, awesome web log!

  12. Wow, awesome blog layout! How long have you been blogging for?
    you made blogging look easy. The overall look of your web site
    is fantastic, as well as the content!

  13. Pretty section of content. I just stumbled upon your web site and in accession capital to assert that I
    get in fact enjoyed account your blog posts. Any
    way I will be subscribing to your augment and even I achievement you access
    consistently rapidly.

  14. I like what you guys are usually up too. Such
    clever work and reporting! Keep up the terrific works guys I’ve included
    you guys to my blogroll.

  15. When I originally commented I clicked the “Notify me when new comments are added” checkbox
    and now each time a comment is added I get three e-mails with the same comment.
    Is there any way you can remove me from that service?
    Thank you!

  16. I do not know if it’s just me or if everybody else
    encountering issues with your site. It seems like some of the written text within your posts are running off the screen. Can someone else please
    comment and let me know if this is happening
    to them too? This could be a issue with my web browser because I’ve had this happen previously.

    Many thanks

  17. hello!,I really like your writing very much! percentage
    we keep in touch more about your post on AOL? I
    need a specialist on this space to unravel my
    problem. Maybe that’s you! Looking ahead to look you.

  18. We are a group of volunteers and starting a new scheme in our community.
    Your website offered us with valuable info to work on. You have done an impressive job and our entire community will be thankful to you.

Leave a Reply

Your email address will not be published. Required fields are marked *