Members of the Group of Eight (G8), an organization for the world’s eight richest countries, agreed last year to have the World Bank set up the facility. The facility, or fund, is supposed to use cash from the G8 countries to set up catastrophe bond and reinsurance programs. When a poor country suffers a serious outbreak, a “cash window” at the fund is supposed to give the country quick access to cash for outbreak response.
The fund is supposed to go into operation later this year.
Students at the Johns Hopkins University School of Advanced International Studies wrote a detailed report on the pandemic fund with advice and financial support from Swiss Re. Swiss Re, a Zurich-based company with large operations in the United States, has been working to get the report media attention.
Just as the G8 consortium brings the eight biggest, richest countries in the world together, the Group of 20 (G20) consortium serves as a forum for the world’s 20 wealthiest economies.
Some of the G20 countries, including Brazil and South Korea, have fought serious disease outbreaks in recent years, and those countries have an obvious reason to want to expand public and private pandemic insurance programs, the students write.
Policymakers who are deciding how much to spend on the programs should recognize that a pandemic may have big, indirect effects on a country’s wealth and productivity, in addition to an obvious, direct effect on gross domestic product, the students say.
The Zika virus, for example, has already caused about $3.5 billion in total economic damage in Latin America, and a global pandemic comparable to the Spanish influenza pandemic of 1918 could cause a total of $4 trillion in economic damage, the students estimate.
In addition to maximizing pandemic fund financing, the students say, managers should set up an outbreak response team, to provide hands-on support for countries that lack the right resources to control an outbreak.
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