Earlier this year, the IMF board approved the establishment of the Resilience and Sustainability Trust (RST) to provide financial support to countries addressing long-term structural challenges, including climate change and pandemic preparedness. 143 countries are eligible to receive support from the RST.
The RST is already being accessed for climate financing…
The RST is to be funded through voluntary contributions of Special Drawing Rights (SDRs) by rich countries, which received most of the August 2021 allocation. The goal is to raise about $42 billion for the trust, of which about $20 billion had been raised as of mid-October and the IMF expects the remaining contributions soon.
The good news is that three countries—Barbados, Costa Rica, and Rwanda—have already agreed to programs with IMF staff under the RST and been approved by the IMF board, with disbursements due in the first quarter of 2023. Several other countries including Bangladesh are in the process of discussing financing under the RST. By seeking long-term financing at concessional rates, these countries are making progress in addressing the challenge posed by climate change. As part of their RST programs, Barbados and Costa Rica will be mainstreaming climate change in their budgets, including strengthening procurement and project selection processes—measures identified together with the World Bank and other partners.
…but pandemic financing remains conspicuously absent
The bad news is that none of the countries that have reached agreement with IMF staff on RST financing have addressed the issue of pandemic preparedness.
There could be several reasons for that. Governments that have entered or are in the process of entering programs with the IMF may believe that with COVID receding in importance, the next pandemic is far off, while action on climate is needed now. They are wrong—the next pandemic could be much sooner and more severe. Some studies suggest a fifty percent chance of another outbreak of the same magnitude as COVID-19 occurring within the next 25 years.
The other plausible reason is that neither IMF staff nor country officials discussing RST financing are aware of elements of pandemic preparedness that could be included in RST-supported programs. On climate change, the IMF has developed broad principles on what investments are needed with the World Bank and other partners. And reform areas in climate change investment as well as reforms vary across countries (see Barbados and Costa Rica programs). However, similar principles on pandemic preparedness have yet to be developed and are under discussion among the IMF, the World Bank, and the World Health Organization (WHO). Thus, it is likely that all countries that are finalizing their RST-supported programs will sidestep pandemic preparedness in the design of their policy frameworks—at least for now.
But country policy frameworks need not wait for these health preparedness guidelines to be developed. We know that there are policy changes to strengthen existing health systems, particularly at the primary healthcare- and community-level, that countries should implement at this stage. They are needed not only to prepare for the next pandemic, but also to strengthen existing health systems to deliver essential routine services.
How should countries receiving assistance under the RST incorporate health preparedness?
First, strengthening health financing. Low-income and lower-middle-income countries spend an average of 1.7 percent of GDP on health, which is less than needed. Of course, these countries need to make efforts to raise more domestic resources to build sustainable and durable health systems.
Second, they could fill gaps in their health systems identified by the International Health Regulations (IHR) and the World Organization for Animal Health (OIE) International Standards to detect and report potential public health emergencies. These areas include: 1) disease surveillance; 2) laboratory systems; 3) emergency communication, coordination, and management; 4) critical health workforce capacities; and 5) community engagement.
Third, they could deploy existing monitoring frameworks developed by the WHO to measure compliance against IHR and use the results to develop national action plans to improve their preparedness for a pandemic. They exist for Bangladesh and Rwanda—the two countries that have either agreed on an RST program or are negotiating one with the IMF. Unfortunately, these frameworks are often not used or incorporated into policymaking (in part because participation in these assessments is currently voluntary). For instance, only 2 countries in the Americas have completed a Joint External Evaluation assessment, and only 8 countries across Africa and the Americas have completed their National Action Planning for Health Security (NAPHS), both World Health Organization-designed frameworks to measure national health security.
Pandemic preparedness is a long-term priority without strong vocal constituencies. Like many global public goods, the benefits of preparedness are not fully realized by a country itself, but shared by neighbors and indeed the rest of the world. As a result, country governments weighing only national costs and benefits are likely to underinvest in pandemic preparedness. The RST is an excellent opportunity for the IMF to support two global public goods: the fights against climate change and pandemics. As we emerge from three devastating years of COVID, it would be a shame for pandemic preparedness—a core objective of the RST—to fall by the wayside in its operations.
CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise.
CGD is a nonpartisan, independent organization and does not take institutional positions.
