COVID19

3 May: How much will it cost? How will we pay back?

Posted on May 3, 2020 Leave a Comment

The first chapter of the IMF 2020 Fiscal Monitor shows that, as of 8 April, G20 countries had provided 3.5% GDP of fiscal support to respond to the pandemic. To compare, in 2009 they spent 2.1% GDP to respond to the financial crisis. In addition, G7 countries have already put forth loans, guarantees and liquidity injections amounting to over 10% GDP. It is not yet possible to estimate the full economic cost of the crisis. But we are talking in trillions of dollars. To compare, the Global Preparedness Monitoring Board said that the 2003 SARS epidemic costed $40 billions, the 2009 H1N1 pandemic $45 billions, and the 2014-2016 Ebola outbreak $53 billions. And to recall, the Commission on a Global Health Risk Framework for the Future estimated, back in 2016, that global pandemic preparedness would cost $4.5 billion per year. Yes, that’s in billions of dollars. Globally.

I always enjoy Capitalisn’t, the podcast of Georgetown Kate Waldock and University of Chicago Luigi Zingales. In this episode they discuss who is going to foot the bill. They explain how debt works, and how there are two ways to get out of it: growth and taxes. To debate tax options and their effects on inequalities, they invite Nobel prize Gene Fama, challenge his conservative views, and get him to agree that a one-off wealth tax could help pay back in a fair way.

My graph this week is Vivid Economics’ green stimulus index which shows the “green” component of stimulus funding – ie how funds go to sectors improving climate change, biodiversity, and pollution — in 11 countries. And we do not see much green.

My quote this week is from former World Bank President recently-gone-back-to-Partners-in-Health Jim Yong Kim [39’30’’]: “If we are using bazooka and nuclear options in fiscal and monetary policies, why are we using squirt guns in public health policy?”.

29 March: People count on businesses to act. So what should they do?

Posted on March 29, 2020 Leave a Comment

The 2020 Edelman trust barometer – surveying 34,000 people in 28 countries – showed that 74% of people expect their CEOs to take the lead on change to address global issues. In the context of COVID-19, a follow up survey with 10,000 people in 10 countries re-affirms that people trust their employers to respond effectively and responsibly to the pandemic, and 78% want businesses to act to protect employees and local communities.

So what should businesses do? I asked 4 experts working closely with businesses in the context of the crisis: Peter Bakker, Lise Kingo, David Nabarro, and Anthony Renshaw. First, they pointed to businesses’ duty of care going beyond the health and safety of employees, to also secure employment continuity. Second, they highlighted the key role of businesses in providing medically-verified information to employees – important as employer communications is the most credible source of information about COVID-19. Third, they suggested that businesses find ways to support health systems. The World Business Council for Sustainable Development (WBCSD) lists such actions on its website, and the UN Global Compact calls on business leaders to support workers and communities.
Smaller local companies, providing employment to the majority of people around the globe, are the hardest impacted by the crisis. For WHO COVID-19 Special Envoy David Nabarro, all should support SMEs where governments might not provide direct stimulus package. UN Global Compact CEO Lise Kingo is working with global companies to keep the SMEs of their supply chains in business. For SOS International Medical Director Anthony Renshaw, local SMEs which are still open can contribute to the response by adjusting their practices such as defining specific shopping hours for the elderly, or their processes to manufacture supplies required by the health system. Looking forward, all interviewees noted the opportunity to rethink business models; reimagine the social contract of business with society; and move towards a model of integrated capitalism. And putting things further in perspective, WBCSD CEO Peter Bakker argued that this crisis was “a warning that the power of nature is stronger than any human constructs”.

For The Verge’s Casey Newton, who is usually quite critical, big techs’ response to COVID-19 has so far earned them brownie points. They have promoted high-quality information. They have offered money, supplies, and jobs. And this has put the big tech backlash on pause.

My quote this week is from NY Governor Cuomo’s 24 March briefing [35’26’’]: “And at the end of the day my friends, even if it is a long day, and this is a long day, love wins. Always. And it will win again through this virus.”

22 March 2020: Back

Posted on March 22, 2020 Leave a Comment

Two years ago, I left UNICEF and stopped What I Read. Several of you reached out recently and I realized that I missed these weekly exchanges with colleagues around the globe, most of whom I had never met in person. Glad to be back hoping you are all well!

The Guardian’s environment editor, John Vidal, reviews recent research on the connections between biodiversity and pandemics in “The tip of the iceberg: is our destruction of nature responsible for Covid-19?”. Disrupted ecosystems are a breeding ground for new viruses. Natural habitats degradation accelerates the transmission of infectious diseases from animals to humans. And today the majority of new diseases affecting humans come from animals. This shows how the health of the environment, the health of humans, and the health of the economy are interconnected. Two thoughts. One, the SDGs which capture such interlinkages remain the right compass. Two, the crisis response should be designed around these interdependences to ensure long term recovery.

Will the COVID-19 response put climate action on the back burner? Paris Accord architect Laurence Tubiana draws a parallel between the two crises: “It’s a lesson:viruses don’t respect borders, climate change doesn’t respect borders. If we do not manage the climate crisis it will be the same.” UCL Economist Mariana Mazzucato argues that “it’s a chance to do capitalism differently” and that bailouts should be structured around the green new deal strategy. Indeed, for New Yorker Bill McKibben, as large corporations are seeking governmental support, there is an opportunity to make it conditional to meeting the Paris Accord targets because “taking money from society means that you owe society something.”

My graph this week is from the 2019 Global Health Security Index, the first assessment of pandemic preparedness for 195 countries. It compiles publicly available data about countries’ levels of health security along six dimensions – prevention, detection, response, health system, norms compliance, and political system. Led by the Nuclear Threat Initiative and the Johns Hopkins Center for Health Security with the Economist Intelligence Unit, it was launched in 2017 shortly after health security featured prominently at Munich Security Conference and Bill Gates called for an “arsenal of new weapons—vaccines, drugs, and diagnostics – to prepare for epidemics the way the military prepares for war”. Published 6 months ago, the index showed that no country was fully prepared. It ranked US 1st, France 11th, Singapore 24th, Italy 31st, and China 51st. In view of COVID19 responses, revisions might be needed. But what worries me the most is what will happen in the 72 countries classified as least prepared.

My quote this week: “Stay home!”