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Breakingviews - Pandemics give rich selfish reason to aid the poor

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MUMBAI (Reuters Breakingviews) - Covid-19 will give multilateralism a boost. Poor countries are more vulnerable in viral outbreaks and they undercut the containment efforts of richer ones. The spread of the new coronavirus from its epicentre in China knocks the case for globalisation, but it also promotes the need for cooperation on health. The rich world has a selfish reason to aid the poor. 

Poor countries have higher mortality rates when disease spreads. As many as 62 million people might die in a modern pandemic involving influenza with similar severity to the Spanish flu of 1918, according to a 2006 study published in the Lancet. Almost all those deaths would occur in developing countries. Covid-19, an epidemic that is as yet neither as serious nor as deadly, will play out differently. But per-head income and the quality of healthcare clearly count. 

Less well-off countries’ economies also take bigger hits. A 1918-style pandemic could torpedo up to 5% of global GDP, according to World Bank figures cited in a 2019 report from the independent Global Preparedness Monitoring Board. That wouldn’t be evenly spread, though, with the greatest risk in Africa and South Asia. For example, Sierra Leone’s modest GDP fell 20% in 2015 during the Ebola epidemic, wiping out five years of development, according to the GPMB.

These vulnerabilities, a result of poorly funded healthcare systems and diets, make it harder to control the cross-border spread of a highly infectious virus. That’s why experts including those at the GPMB have been calling for higher levels of pandemic preparedness. They want rich countries to help developing countries reach a basic standard.

As for the latest coronavirus, the World Bank is making available $12 billion of crisis funding in the form of grants, low-interest loans and more. That’s welcome but the virus is already in 85 countries and territories. The U.S. central bank cut interest rates this week, too – an effort to head off economic consequences. A more effective fix for next time, though, is advance funding. 

One idea is a global pandemic tax of sorts, says Gavin Yamey, a professor at Duke University Sanford School of Public Policy. A levy on the rich world could even be linked to international travel, which at present arguably underprices the risk of disease transmission. Rich countries might get a better return by proactively helping the poor before the next outbreak.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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