Save Lives or Save Jobs - A False Dilemma
Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), and Dr. Tedros Adhanom Ghebreyesus, Director-General of the World Health Organization (WHO) have written an op-ed saying that the COVID-19 pandemic response does not need to be a choice between saving lives and saving jobs.
The op-ed, published in The Telegraph, states that getting the virus under control is, if anything, a prerequisite to saving livelihoods.
The demand for IMF financing has skyrocketed. So far, 85 countries have needed IMF emergency financing to shield themselves against a sudden drop in economic activity and revenue. “As financing to support severely constrained public budgets reaches the countries in need, our joint plea is to place health expenditures at the top of the priority list.”
This can and must go with support for economy-wide priorities required to reduce unemployment, minimize bankruptcies and, over time, ensure recovery. “They come in addition to – not as a substitute for – health spending, and aim to provide targeted support to most-affected households and firms, including cash transfers, wage subsidies, and short-time work, strengthening unemployment benefits and social safety nets, and limiting the rise in borrowing costs.”
Georgieva and Ghebreyesus recognize how difficult it is to strike the right balance but are convinced that emergency financing can only help if countries do strike a balance. The WHO can help in ensuring the production and delivery of medical supplies to those in need, in an efficient, and equitable manner - by facilitating advance purchase agreements, for example. The WHO is also working with suppliers of personal protective equipment for health workers to ensure that supply chains are functioning.
The IMF for its part aims to help by doubling its emergency response capacity from $50 billion up to $100 billion. Together with the World Bank it is advocating for a standstill of debt service from the poorest countries to official bilateral creditors for as long as the world economy is paralyzed by the pandemic.
Speaking at a press conference, Ghebreyesus said: “For some countries, debt relief is essential to enable them to take care of their people and avoid economic collapse. This is an area of cooperation between WHO, the IMF and the World Bank.
“But ultimately, the best way for countries to end restrictions and ease their economic effects is to attack the virus with the aggressive and comprehensive package of measures that we have spoken about many times before: find, test, isolate and treat every case, and trace every contact.
“If countries rush to lift restrictions too quickly, the virus could resurge, and the economic impact could be even more severe and prolonged. Financing the health response is therefore an essential investment not just in saving lives, but in the longer-term social and economic recovery.”
He is calling on all countries to ensure core public health measures are fully funded and that financial barriers to care are removed. “If people delay or forego care because they can’t afford it, they not only harm themselves, they make the pandemic harder to control and put society at risk.”
Also, health workers must be paid their salaries, and health facilities need a reliable supply of funding to purchase essential medical supplies.
The heads of the WTO and World Customs Organization (WCO) issued a joint statement on 6 April pledging to work together to facilitate trade in essential goods such as medical supplies, food and energy. WTO Director-General Roberto Azevêdo and WCO Secretary General Dr. Kunio Mikuriya said the two organizations would work closely together to minimize disruption to cross-border trade in goods - in particular those essential to combat the COVID-19 pandemic - while safeguarding public health.
They also pledged support for initiatives that facilitate cross-border trade so that essential goods can quickly reach those most in need, including in least developed and land-locked countries.