International cooperation amplifies individual countries’ efforts. In the struggle against Covid-19, international coordination is vital (Biancotti et al. 2020). In this column, we identify eight priorities that we have identified as the main areas that policymakers across the world must focus on.
Co-operation for crisis response
1. Scaling up of medical capacity for treatment and testing: Mobilising health professionals is at the core of the fight against Covid-19. However, it is also critical that these professionals are equipped with sufficient medical supplies, whether for effective and safe patient care (e.g. ventilators, personal protective equipment), or for the implementation of test, track, and trace programmes (e.g. swabs and chemical reagents). Yet, the global supply of medical goods has failed to meet the increased demand, prompting countries to reduce exports and favour domestic use (see Figure 1). Export restrictions on vital goods can hinder global health efforts by delaying trade (which is concerning in times of urgent need), or by putting upward pressure on prices (which can constrain poorer hospitals and countries) (OECD 2020). Governments should co-operate to preserve trade openness while scaling up global medical and testing capacity, enabling access to vital medical goods at affordable prices (OECD 2020). The G20 has called against excessive protectionist approaches (G20 2020), but it could go further as a coordinated body. For example, the group could advocate the monitoring of supplies of certain medical equipment, ensuring that the least developed countries to get the materials they need – as it did with food supplies following the global food spikes of 2007-2008 (Bown 2020). Moreover, given the large dependence of OECD countries on migrant doctors and nurses, international cooperation is needed to smooth the international mobility and recruitment of migrant health professionals, by easing their arrival and recognition of their qualifications (OECD 2020).
Figure 1 Export restrictions on medical supplies since the beginning of 2020
Source: (Global Trade Alert, 2020), 21st Century Tracking of Pandemic-Era Trade Policies in Food and Medical Products, last updated June 5, 2020.
2. Effective vaccine development and deployment: A vaccine would be the best route to end the pandemic. Currently, 181 candidates are in development (see Figure 2) (London School of Hygiene 2020). Because a vaccine will be most effective if it is available cheaply everywhere, cooperation (rather than competition and ‘vaccine nationalism’) is necessary to expedite its development and distribution. Globally, governments will have to spend tens to hundreds of billions to vaccinate every person on the planet. Although this cost pales in comparison to the number of lives the vaccine could save, the price tag can be reduced significantly, and the vaccination accelerated if governments cooperate to avoid a bidding war that could drive up prices. Multilateral fundraising efforts for a vaccine are already underway, such as the Coronavirus Global Response pledging event that raised €7.4 billion for universal vaccine access (European Commission 2020). There has also been the International Finance Facility for Immunisation’s vaccine bonds, and advanced market commitments proposed by GAVI, the vaccine alliance (Schäferhoff and Yamey 2020). These efforts should be supported and bolstered. In addition, manufacturing capacity has to be built while research and development is underway, meaning that countries should collaborate to project demand, and plan the necessary capacity to produce sufficient quantities of the vaccine (OECD 2020). Governments also need to agree upfront on rules for international property rights and procurement, and impose universal standards of evidence for vaccine approval (OECD 2020). Finally, an international commitment to a fair allocation system to ensure that the vaccine will be widely available, and that the countries that need it most are not deprived, would be welcome. Such a system could rely on existing instruments and institutions (including global purchasing agents, advance purchase commitments, and financial instruments like concessional loans), and prioritise delivery of vaccines to healthcare workers and high-risk populations (Yamey et al. 2020). Simultaneous support to strengthen the delivery capacities of developing countries is also critical for vaccine access for vulnerable populations.
Figure 2 Vaccine development pipeline by vaccine type and phase of clinical development
Source: (London School of Hygiene and Topical Medecine, 2020), COVID-19 vaccine tracker, last updated June 5, 2020.
3. Continued surveillance to detect re-emergence of the virus: There is also a need for a collaborative approach to virus reporting and surveillance, including the monitoring of mutated virus strains. Initial efforts to contain the virus were hampered by slow and incomplete reporting of the outbreak (Yuan 2020). Efforts to assess the progression of the pandemic will succeed only if the information is continuously, rapidly, widely, and freely shared across borders, as reiterated by the World Health Organisation (Moorthy et al. 2020). However, there are major roadblocks, such as ambiguous criteria for data sharing (Modjarrad et al. 2016), and a lack of common measurement methodologies (e.g. cross-country differences in counting COVID-19 deaths) (Hirsch and Martuscelli 2020). Overcoming these obstacles requires clear guidance and harmonised standards for health data terminology and exchange (OECD 2020). Continuous cooperation is also pertinent as countries (e.g. Korea and Israel) start leveraging digital technologies (such as mobile and smartphone data) for disease surveillance and control. The potential of these technologies must be balanced with the concerns of privacy that they provoke, which entails developing appropriate health data governance frameworks, such as secure systems for data exchange. Developing these frameworks would benefit from cross-country sharing of best practices, especially since disease surveillance is a multilateral exercise (OECD 2020).
4. Continuous and strong support for less developed countries: The virus has particularly profound implications for developing countries. Their health systems are vulnerable and underfunded, with about 90% of low-income countries facing health-worker shortages, and many continue to suffer from the lingering effects of previous health crises (e.g. Ebola, malaria, and HIV). Mechanisms for knowledge sharing about protocols of screening and treatment could help, especially in countries with stretched healthcare systems. Countries that had a head start in dealing with the pandemic could offer important lessons and share best practices. Crucially, fiscal support will also be needed. In developing countries, containment measures (e.g. school closures and work reduction) are harder to implement, and they have high opportunity costs in terms of poverty and educational-attainment. These countries also have high levels of informal work, which limits governments’ ability to provide social protection for workers and fiscal support for businesses. Moreover, in low- and middle-income countries, this crisis comes at a time of rising concern for the sustainability of public debt. As a result,, sweeping international efforts are needed to help developing countries weather the storm. The G20 has already agreed on a ‘debt service standstill’ until the end of 2020 from all official bilateral creditors and called on private investors working through the International Institute for Finance to follow suit (G20 2020). The IMF is replenishing its Containment and Relief Trust and is prepared to use its entire $1 trillion lending capacity, and the World Bank has set up a fast track facility for emergency support, and is ready to deploy up to $160 billion over the next 15 months.
Co-operation for inclusive and sustainable recovery
5. Fiscal policy: To date, countries have individually implemented significant fiscal measures (OECD 2020). As the goal of these measures shifts to recovery, fiscal stimulus coordinated across countries will magnify the benefit for all economies. Stimulus packages have international spillovers through both the trade and investment channels, suggesting an important role for coordination to maximise benefits (OECD 2019). In fact, OECD simulations for G20 countries suggest clear gains from collective action, compared to singular country actions (Pains and Salins forthcoming). Recovery from the 2008-2009 crisis has also elucidated the value of fiscal coordination (Kalinina 2020). Fiscal coordination can also involve sharing best practices on how to operationalise long-term projects.
6. Monetary policy: Monetary and financial policy cooperation has been relatively strong. An important act of cooperation has been the activation and establishment of swap lines between major central banks. In theory, there are several avenues through which central banks can further enhance their cooperation. First, major central banks could set up liquidity facilities that allow foreign central banks to exchange sovereign assets for cash without disrupting the securities markets of issuing countries (Collins et al. 2020). Central banks could also further expand their swap lines to more economies. However, in practice, given the fiscal risks associated with extending swap lines, they remain restricted meaning that only certain emerging economies with deep currency markets are included as recipients (Levy-Yeyati 2020).
7. Trade policy and supply chains: Since the start of 2020, 89 jurisdictions have implemented a total of 154 export controls on medical supplies (Figure 1), and 28 jurisdictions have executed 40 export curbs on agricultural and food products (Global Trade Alert 2020). These actions have exacerbated pre-existing trade tensions and protectionist tendencies, heaping further pressure on global trade. If a second Covid-19 outbreak occurs (triggering a return to lockdowns), world trade is forecasted to plummet by 11.4% this year. Even if a second wave of infections is avoided, global trade is expected to fall by 9.5% in 2020 (OECD 2020). Experience with trade restrictions in the food sector shows they increase prices and threaten supply (Gillson and Fouad 2015). Supply chains have received particular attention during the crisis due to the perception that that complex and long supply chains have worsened the implications of the pandemic. However, risk management research suggests that shorter supply chains and domestic self-sufficiency do not necessarily imply reduced vulnerabilities. Rather, supplier diversification can help firms maintain production in times of crises (Miroudot 2020). This suggests that recovery from this crisis necessitates co-operation to reverse protectionist policies, resist implementing further barriers, and strengthen the robustness and resilience of supply chains.
8. Improved preparedness for future pandemics and risks: Between 1980 and 2010, the number of annual infectious disease outbreaks has more than tripled (Smith et al. 2020), and the risk of future epidemics and pandemics is high, as well the deep risks linked to environmental changes (World Economic Forum 2019). Better preparedness is crucial to mitigate these risks (Commission on a Global Health Risk Framework for the Future; National Academy of Medicine Secretariat 2016). This could include globally co-ordinated mechanisms such as early warning systems and common protocols for temporary travel and border control restrictions (Derviş and Strauss 2020). The international community may also rethink and reinforce global frameworks for emergency preparedness and facilitate research agendas and technology development in domains where market forces are lagging or stagnant (e.g. vaccine research) (OECD 2020). An example of this is the Coalition for Epidemic Preparedness Innovations, a global network of public and private stakeholders created after the Ebola epidemic to fill critical gaps in the vaccine development pipeline, notably by advancing vaccines and keeping investigational stockpiles, funding vaccine development, and coordinating responses to epidemics (CEPI 2019). Enhanced efforts to address the global shortage of health workers through initiatives such as the ILO, OECD, and the WHO Working for Health programme would also be welcome.
Covid-19 is an existential threat that has upended global systems. Without international co-operation, both the exit from the crisis and the recovery is likely to be slow and weak. This is true for the healthcare sector, as effective disease surveillance, swift vaccine development (and deployment), and preparedness for future epidemics all benefit from multilateral action. Further, preserving trade openness and increasing the robustness and resilience of supply chains can not only ensure countries’ access to vital medical goods, but also invigorate the post-pandemic economy. Finally, internationally coordinated fiscal and monetary policies (in tandem with support for developing countries) can help the global economy weather the current shock, while preparing it for a sustainable and inclusive recovery.
Authors’ note: To support information exchange and international cooperation, the OECD has launched a policy tracker that provides updates on fiscal, monetary, financial and macro prudential policy actions taken by countries around the world to minimise the economic and social costs of Covid-19 and to promote recovery. We thank Laurence Boone, Federico Guanais, David Haugh, Mark Pearson, Nick Tomlinson and Martin Wenzl for their useful comments and feedback.
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