What about debt cancellation to help prevent future pandemics?

Talks on a ‘pandemic treaty’ are starting within weeks as the World Health Organization (WHO) First ‘zero-sum’ conceptual draft Member states reached agreement on Friday – but one of the biggest puzzles is how to pay to ease the next pandemic.

The COVID-19 pandemic has had a significant impact on economies, and 143 of the 192 WHO member states are to adopt “austerity measures” including cuts in public spending next year, while Russia’s war in Ukraine and the climate crisis strain country budgets. and challenging.

pandemic fundThere is an annual “funding gap” of $10 billion, recently determined by the World Bank G20 leaders accepted At the conclusion of their meeting in Bali on Wednesday.

But at the launch of its report this week the Geneva Global Health Hub (G2H2) described the fund as an “outdated funding model dependent on colonial donations”, “Financial Justice for Pandemic Prevention, Preparedness and Response”,

“There is certainly no shortage of money in this world, but bold action is needed to redirect it to advance health after the pandemic. Instead the international community continues to follow outdated and opaque models, as established recently pandemic fundsaid Mariska Mers of Waymos, co-author of the report.

The G2H2 report proposes several options for financing stronger health systems to respond to pandemics, one of which is debt cancellation.

Many emerging and developing countries were in severe debt distress long before the COVID-19 pandemic, while many more have emerged from the pandemic with higher and more volatile debt.

According to the report, “In low-income countries, debt increased from 58% to 65% between 2019 and 2021. Thirty countries in sub-Saharan Africa are set to have debt-to-GDP ratios above 50% in 2021 “

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

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

Debt Cancellation and Climate Compensation

Nicoletta Dantico, G2H2 co-chair and report co-author.

“If the G20 had canceled all payments in 2020 from the 76 most indebted countries, it would have freed up $40 billion for the pandemic response. If the cancellation included 2021, the amount would be $300 billion. Debt is a virus, and debt cancellation is the vaccine the world needs before the debt crisis erupts,” said Nicoletta Dantico, co-chair of G2H2 and co-author of the report.

The report argues that debt cancellation is not such an outlandish idea in light of the “loss and damage” that wealthy industrialized countries owe to developing countries for the devastation caused by their greenhouse gas emissions.

Dentico said, while the World Bank keeps talking about a “debt crisis”, it is the northern countries that are indebted because “it is their ecological debt that needs to be paid”.

He said global warming caused $6 trillion in global economic losses between 1990 and 2014 and it was time for “fiscal justice”.

health cuts in the name of ‘austerity’

Isabel Ortiz, director of the Global Social Justice Program at the Joseph Stiglitz Initiative for Policy Dialogue at Columbia Universitysaid there was a “tsunami of austerity cuts” ahead – yet these always resulted in health sector cuts that held countries back.

Prior to the 2014 Ebola outbreak in West Africa, the International Monetary Fund (IMF) forced Guinea, Liberia and Sierra Leone to adopt austerity measures, including limiting the number of health workers and capping health workers’ pay. which then, according to reports, affected his response to Ebola.

Baba Ai, co-chair of G2H2 from Public Services International, said austerity measures as part of fiscal consolidation had led to “a drastic deterioration in health conditions for the entire population”.

“This economic model enslaves the countries of the Global South to multiple financial dependencies, constrains their fiscal policy, distorts their economic and human development, and impoverishes them,” Ai said.

Austerity typically went along with the commercialization and privatization of public healthcare – yet “people have suffered the most during COVID-19 where privatized healthcare or funding has been cut”, Aye said.

Despite this, the World Bank has embarked on its “private-first” approach – which includes health – through its “Maximizing Finance for Development Strategy”, added G2H2.

Meanwhile, the IMF, after a brief spending boost during the Covid-19 pandemic, is back to focus on ‘fiscal consolidation’ in the country’s programs and loans, according to reports.

But there are better alternatives to austerity-related public spending cuts, Ortiz said, which include raising taxation of corporations and wealthy individuals.

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

He said that Argentina, Iceland, Spain have announced special taxation on windfall profits of the energy sector.

“All the human suffering caused by austerity cuts is avoidable. There are alternatives. Even in the poorest countries, governments can look at financial options such as proper taxation, reducing debt and illicit financial flows to provide quality increase its budget to ensure public services and universal social security,” Ortiz said.

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

Illicit Financial Flows in Tax Havens

According to G2H2, Illicit Financial Flows (IFF) are another drain on public resources that can only be tackled with radical action.

Many of these flows involve the repatriation of profits from the countries where they originated to tax havens.

According to the report, the Eastern and Southern African region lost a staggering $7.6 billion in tax revenue in 2017 alone, due to “base erosion and shifting of profits to tax havens”.

At the UN General Assembly in 2022, the Africa Group on the long-standing call by the G77 and China to establish an intergovernmental process at the UN to address global tax abuses, the direction of the UN Conference on Tax Cooperation Presented a draft proposal for talks. ,

G2H2 said, “This initiative should receive a strong signal of support, at least in the context of the intergovernmental negotiating body (INB) for the pandemic agreement at WHO.”

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