How about debt cancellation to help prevent future pandemics?

Negotiations for a “pandemic treaty” began in earnest within weeks as the World Health Organization (WHO) distributed First ‘zero sum’ concept draft From the agreement to member states on Friday – but one of the biggest mysteries is how to push for relief from the next pandemic.

The COVID-19 pandemic has had a significant impact on economies, and 143 of the WHO’s 192 member states are set to adopt “austerity measures” including cutting public spending next year, while Russia’s war in Ukraine and climate crises pose a challenge. to state budgets.

The Pandemic Fundrecently identified by the World Bank, has an annual “financing gap” of $10 billion The G20 leaders agreed At the conclusion of their meeting in Bali on Wednesday.

But this week, the Geneva Center for Global Health (G2H2) called the fund “an outdated funding model based on colonial philanthropy” when launching its report, “Financial Justice for Epidemic Prevention, Preparedness, and Response”.

There is certainly no shortage of money in this world, but redirecting it to the advancement of health after a pandemic takes bold action. Instead, the international community continues to follow models that are outdated and opaque, as are those that have been created more recently. Pandemic Fundsaid Mariska Morse of Wemos, co-author of the report.

The G2H2 report suggests a number of options for financing stronger health systems to stave off pandemics, one of which is debt cancellation.

Many emerging and developing countries experienced severe debt crises prior to the COVID-19 pandemic, while many countries emerged from the pandemic with higher and more difficult debts.

According to the report, “In low-income countries, debt increased from 58 to 65% between 2019 and 2021. Thirty countries in sub-Saharan Africa saw a debt-to-GDP ratio exceeding 50% in 2021.”

According to the G2H2 report, “Research in 41 countries shows that the countries with the highest debt payments will spend an average of 3% less on essential public services in 2023 than in 2019.”

In addition, between 75 million and 95 million people will be pushed into extreme poverty by the end of 2022, according to the World Bank.

Debt write-off and climate compensation

Nicoletta Dentico, co-chair of G2H2 and co-author of the report.

If the G20 had canceled all payments due in 2020 from the 76 indebted countries, this would have freed up $40 billion for the pandemic response. If the cancellation included 2021, the amount would have been $300 billion. “Debt is a virus, and debt cancellation is the vaccine the world needs before the debt crisis explodes,” said Nicoletta DiNico, Co-Chair of G2H2 and co-author of the report.

Debt cancellation is not a strange idea, the report says, given the “loss and damage” compensation that rich industrialized countries owe to developing countries for the devastation caused by greenhouse gas emissions.

While the World Bank continues to talk about a “debt crisis,” Dentiko said, it is the Nordic countries that are heavily indebted because “their environmental debts are the ones that have to be paid.”

She added that global warming caused $6 trillion in global economic losses between 1990 and 2014, and it was time for “fiscal justice.”

Healthy cuts in the name of “austerity”

Isabel Ortiz, director of the Global Social Justice Program at the Joseph Stiglitz Initiative for Political Dialogue at Columbia UniversityHe said there was a “tsunami of austerity cuts” ahead – yet that had always led to cuts in the health sector holding countries back.

Before the Ebola outbreak in West Africa in 2014, the International Monetary Fund had forced Guinea, Liberia and Sierra Leone to adopt austerity measures, including limiting the number of health workers they could hire and capping health workers’ wages. According to the report, it affected its response to Ebola.

Austerity measures as part of fiscal consolidation have mostly led to a “massive deterioration in the health conditions of an entire population,” said Baba Ay, co-chair of G2H2, of Public Services International.

Ai said: “This economic model has enslaved the countries of the South in the world to many financial dependencies, restricted their fiscal policy space, distorted their economic and human development, and impoverished them.”

Austerity has traditionally been accompanied by the commercialization and privatization of public health services — yet “people have suffered the most during COVID-19 where there has been privatized healthcare or funding cuts,” added I.

Despite this, the World Bank has launched its own “own first” approach – including in the area of ​​health – by “maximizing financing for development strategy,” added the G2H2 report.

Meanwhile, the International Monetary Fund, after increasing spending briefly during the COVID-19 pandemic, has returned to pressing for ‘fiscal consolidation’ in Qatari programs and loans, according to the report.

But Ortiz said there are better alternatives to cutting public spending linked to austerity, including higher taxes on businesses and the wealthy.

“For example, we can increase taxes on corporate profits, financial activities, wealth, property, natural resources, and digital services like Amazon,” Ortiz said.

She added that Argentina, Iceland and Spain announced the imposition of special taxes on windfall profits from the energy sector.

“All human suffering caused by austerity cuts can be avoided. There are alternatives. Even in the poorest countries, governments can increase their budgets to ensure quality public services and universal social protection by considering financing options such as fairer taxes, and reductions in debt and illicit financial flows.” Ortiz said.

Isabel Ortiz, director of the Global Social Justice Program at the Joseph Stiglitz Initiative for Political Dialogue at Columbia University

Illicit financial flows to tax havens

Illicit financial flows (IFFs) are another drain on public resources that can only be addressed through drastic measures, according to G2H2.

Many of these flows involved the transfer of profits from the countries in which they were generated to tax havens.

Eastern and Southern Africa lost $7.6 billion in tax revenue in 2017 alone, due to “base erosion and profit shifting to tax havens,” according to the report.

At the UN General Assembly in 2022, the African Group introduced a draft resolution calling for negotiations towards a UN agreement on tax cooperation, building on a longstanding call by the G-77 and China for the establishment of an intergovernmental process at the UN to address global tax abuses. .

“This initiative should receive at least a strong indication of support in the context of the Intergovernmental Negotiating Body (INB) for the WHO pandemic agreement,” said G2H2.

Fighting the information epidemic in health information and supporting health policy reporting from the global south. Our growing network of journalists in Africa, Asia, Geneva and New York connects the dots between regional realities and great global debates, with evidence-based news and analysis available to everyone. To make a personal or organizational contribution, click here on PayPal.

Leave a Comment