For Sama tells the story of a young woman living in Aleppo during a five year period of armed conflict. From 2011 to 2016, Waad al-Kateab documents her personal experience of the war in Syria as she joins the uprising against the Assad regime, falls in love and gives birth to her daughter while living in AlQudes Hospital, run by her husband Hamza and under attack by Syrian and Russian forces.

The screening will be followed by a panel discussion exploring the impact of attacks on healthcare institutions in conflict zones. To what extent are attacks on healthcare services used in contemporary warfare? How do these attacks affect health workers in regions facing armed conflict or political unrest? And what is the role of the international community in ensuring the protection of healthcare delivery in conflict zones?

Running time: 95 mins

This event is open to Chatham House Members only. Not a member? Find out more.

For further information on the different types of Chatham House events, visit Our Events Explained.

The Review on Antimicrobial Resistance, chaired by Jim O’Neill, was commissioned by former UK prime minister, David Cameron, in July 2014. Supported by the UK government and the Wellcome Trust, the final report of the review was published in May 2016 and has had a global impact in terms of motivating political leaders and decision-makers to take more seriously the threat posed by antimicrobial resistance.

Yet there is now a perception that the political momentum to address the issue is waning and needs to be reinvigorated.

In a further report produced by Chatham House, the progress of the recommendations of the review is assessed and the key ways to move forward are identified.

Panellists at this event, where highlights of the report are presented, provide their assessment of the progress so far and discuss priorities for future action.

The report was funded by Wellcome.

Linking health and security has become a mainstream approach to health policy issues over the past two decades. So much so that the discourse of global health security has become close to synonymous with global health, their meanings being considered almost interchangeable. While the debates surrounding the health–security nexus vary in levels of analysis from the global to the national to the individual, this article argues that the consideration of health as a security issue, and the ensuing path dependencies, have shifted in three ways. First, the concept has been broadened to the extent that a multitude of health issues (and others) are constructed as threats to health security. Second, securitizing health has moved beyond a rhetorical device to include the direct involvement of the security sector. Third, the performance of health security has become a security threat in itself. These considerations, the article argues, alter the remit of the global health security narrative; the global health community needs to recognize this shift and adapt its use of security-focused policies accordingly.

Even though most African states have signed and ratified the Framework Convention on Tobacco Control (FCTC), a global treaty to limit tobacco use, African states have been slow to pass and implement tobacco control policies like regulations on sales, smoke-free environments and taxes. This article examines how the ineffectiveness of local tobacco-control advocacy contributes to this suboptimal outcome. It asserts that the disconnect between the global tobacco-control advocacy network and local advocates shapes this ineffectiveness. With funding and direction predominately from the Bloomberg Initiative, local advocates emulate the funders' goal of achieving quick, measurable policy results. Their reliance on the network drives African advocates to strive to pass legislation, even in difficult political climates, and to remake their agendas when funders change their priorities. They also emulate the network's focus on evidence-based arguments that stress epidemiological data and biomedical interventions, even when this issue frame does not resonate with policy-makers. Financial dependence can draw local advocates into expectations about patronage politics, undermine their ability to make principled arguments, and lead them to downplay the ways that their home country's socioeconomic and cultural contexts affect tobacco use and control. Based on key informant interviews with African advocates, media analysis and the case-studies of Ghana and Tanzania, the article broadens the study of philanthropy in global health, it adds an African perspective to the literature on global health advocacy, and it deepens knowledge on power dynamics between external funders and local actors in the realms of health and development.

England and Australia are considered standard-bearers of universal access to health services, with the former’s National Health Service (NHS) recognized as a global brand and the latter’s Medicare seen as a leader in the Asia-Pacific region. However, through the exclusion of migrant and refugee groups, each is failing to deliver true universality in their health services. These exclusions breach both their own national policies and of international commitments they have made.

While the marginalization of mobile populations is not a new phenomenon, in recent years there has been a global increase in anti-migrant rhetoric, and such health care exclusions reflect a global trend in which undocumented migrants, refugees and asylum seekers are denied rights.

They are also increasingly excluded in the interpretation of phrases such as ‘leave no one behind’ and ‘universal health coverage’, commonly used by UN bodies and member states, despite explicit language in UN declarations that commits countries to include mobile groups.

Giving all people – including undocumented migrants and asylum seekers – access to health care is essential not just for the health of the migrant groups but also the public health of the populations that host them. In a world with almost one billion people on the move, failing to take account of such mobility leaves services ill-equipped and will result in missed early and preventative treatment, an increased burden on services and a susceptibility to the spread of infectious disease.

England

While in the three other nations of the UK, the health services are accountable to the devolved government, the central UK government is responsible for the NHS in England, where there are considerably greater restrictions in access.

Undocumented migrants and refused asylum seekers are entitled to access all health care services if doctors deem it clinically urgent or immediately necessary to provide it. However, the Home Office’s ‘hostile environment’ policies towards undocumented migrants, implemented aggressively and without training for clinical staff, are leading to the inappropriate denial of urgent and clearly necessary care.

One example is the case of Elfreda Spencer, whose treatment for myeloma was delayed for one year, allowing the disease to progress, resulting in her death.

In England, these policies, which closely link health care and immigration enforcement, are also deterring people from seeking health care they are entitled to. For example, medical bills received by migrants contain threats to inform immigration enforcement of their details if balances are not cleared in a certain timeframe. Of particular concern, the NGO Maternity Action has demonstrated that such a link to immigration officials results in the deterrence of pregnant women from seeking care during their pregnancy.

Almost all leading medical organizations in the United Kingdom have raised concerns about these policies, highlighting the negative impact on public health and the lack of financial justification for their implementation. Many have highlighted that undocument migrants use just and estimated 0.3% of the NHS budget and have pointed to international evidence that suggests that restrictive health care policies may cost the system more.

Australia

In Australia, all people who seek refuge by boat are held, and have their cases processed offshore in Papua New Guinea (PNG) and Nauru, at a cost of almost A$5 billion between 2013 and 2017. Through this international agreement, in place since 2013, Australia has committed to arrange and pay for the care for the refugees, including health services ‘to a standard of care broadly comparable to that available to the general Australian community under the public health system’.

However, the standard of care made available to the refugees is far from comparable to that available to the general population in Australia. Findings against the current care provision contractor on PNG, Pacific International Hospital, which took over in the last year, are particularly damning.

For instance, an Australian coroner investigating the 2014 death from a treatable leg infection of an asylum seeker held in PNG concluded that the contractor lacked ‘necessary clinical skills’, and provided ‘inadequate’ care. The coroner’s report, issued in 2018, found the company had also, in other cases, denied care, withheld pain relief, distributed expired medication and had generally poor standards of care, with broken or missing equipment and medication, and services often closed when they were supposed to be open.

This has also been reiterated by the Royal Australasian College of Physicians, which has appealed to the Australian government to end its policies of offshore processing immediately, due to health implications for asylum seekers. This echoes concerns of the medical community around the government’s ongoing attempts to repeal the ‘Medivac’ legislation, which enables emergency medical evacuation from PNG and Nauru.

Bad policy

Both governments have signed up to UN Sustainable Development Goals commitment to ‘safe and orderly migration’, an essential component of which is access to health care. The vision for this was laid out in a global action plan on promoting the health of refugees and migrants, agreed by member states at the 2019 World Health Assembly.

However, rather than allow national policies to be informed by such international plans and the evidence put forward by leading health professionals and medical organizations, the unsubstantiated framing of migrants as a security risk and economic burden has curtailed migrant and refugee access to health care.

The inclusion of migrants and refugees within universal access to health services is not merely a matter of human rights. Despite being framed as a financial burden, ensuring access for all people may reduce costs on health services through prevention of costly later-stage medical complications, increased transmission of infections and inefficient administrative costs of determining eligibility.

Thailand provides an example of a middle-income country that recognized this, successfully including all migrants and refugees in its health reforms in 2002. Alongside entitling all residents to join the universal coverage scheme, the country also ensured that services were ‘migrant friendly’, including through the provision of translators. A key justification for the approach was the economic benefit of ensuring a healthy migrant population, including the undocumented population.

The denial of quality health services to refugees and undocumented migrants is a poor policy choice. Governments may find it tempting to gain political capital through excluding these groups, but providing adequate access to health services is part of both governments’ commitments made at the national and international levels. Not only are inclusive health services feasible to implement and good for the health of migrants and refugees, in the long term, they are safer for public health and may save money.

Air pollution has been classified as a cancer-causing agent with evidence showing an increased risk of lung cancer associated with increasing levels of exposure to outdoor air pollution and particulate matter.

Air pollution is also known to increase risks for other diseases, especially respiratory and heart diseases, and studies show that levels of exposure to air pollution have increased significantly in some parts of the world - mostly in rapidly industrializing countries with large populations.

In coordination with London Global Cancer Week partner organizations, this event outlines the evidence linking air pollution and cancer rates in London and other major cities.

Panellists provide a 360° picture of the impact of the rising incidence of cancer across the world, the challenges the cancer pandemic poses to the implementation of universal health coverage and the existing UK contribution to strengthening capacity in cancer management and research in developing countries.

The leaked record of the five meetings of the UK–US Trade & Investment Working Group held in 2017–18 has led to a controversy in the UK election campaign around the claim that ‘the NHS is up for sale’.

But a careful reading of the leaked documents reveals how remarkably little concerns the NHS – in five meetings over 16 months, the NHS is mentioned just four times. The patent regime and how it affects medicines is discussed in more depth but largely in terms of the participants trying to understand each other’s systems and perspectives. For the most part, the discussions were overwhelmingly about everything else a trade deal would cover other than healthcare – matters such as subsidies, rules of origin and customs facilitation.

But this does not mean there will be no impact on Britain’s health service. There are three main concerns about the possible implications of a US–UK trade deal after Brexit – a negotiation that will of course only take place if the UK remains outside the EU customs union and single market and also does not reach a trade agreement with the EU that proves incompatible with US negotiating objectives.

One concern is that the US aim of securing ‘full market access for US products’, expressed in the US negotiating objectives, will affect the ability of NICE (The National Institute for Health and Care Excellence) to prevent the NHS from procuring products that are deemed too expensive in relation to their benefits. It could also affect the ability of the NHS to negotiate with companies to secure price reductions as, for instance, happened recently with Orkambi, a cystic fibrosis drug.

A peculiarity of the main US government healthcare programme (Medicare) is that it has historically not negotiated drug prices, although there are several bills now before Congress aiming to change that. US refusal to negotiate or control prices is one reason that US drug prices are the highest in the world.  

A second concern is that the US objective of securing ‘intellectual property rights that reflect a standard of protection similar to that found in US law’ will result in longer patent terms and other forms of exclusivity that will increase the prices the NHS will have to pay for drugs.

However, it is not immediately apparent that UK standards are significantly different from those in the US – the institutional arrangements differ but the levels of protection offered are broadly comparable. Recent publicity about a potential extra NHS medicine bill of £27 billion resulting from a trade deal is based on the NHS having to pay US prices on all drugs – which seems an unlikely outcome unless the UK contingent are extraordinarily bad negotiators.

Nevertheless, in an analysis section (marked for internal distribution only), the UK lead negotiator noted: ‘The impact of some patent issues raised on NHS access to generic drugs (i.e. cheaper drugs) will be a key consideration going forward.’

A third concern is that the US objective of providing ‘fair and open conditions for services trade’ and other US negotiating objectives will oblige the UK to open up the NHS to American healthcare companies.

This is where it gets complicated. At one point in a discussion on state-owned enterprises (SOEs) the US asked if the UK had concerns about their ‘health insurance system’ (presumably a reference to the NHS). The UK response was that it ‘wouldn’t want to discuss particular health care entities at this time, you’ll be aware of certain statements saying we need to protect our needs; this would be something to discuss further down the line…’

On this exchange the UK lead negotiator commented:  ‘We do not currently believe the US has a major offensive interest in this space – not through the SOE chapter at least. Our response dealt with this for now, but we will need to be able to go into more detail about the functioning of the NHS and our views on whether or not it is engaged in commercial activities…’

On the face of it, these documents provide no basis for saying the NHS would be for sale – whatever that means exactly. The talks were simply an exploratory investigation between officials on both sides in advance of possible negotiations.

But it is a fact that US positions in free trade agreements are heavily influenced by corporate interests. Their participation in framing agreements is institutionalized in the US system and the pharmaceutical and healthcare industries in the US spend, by a large margin, more on lobbying the government than any other sector does. Moreover, President Donald Trump has long complained about ‘the global freeloading that forces American consumers to subsidize lower prices in foreign countries through higher prices in our country’.

It is when (and if) the actual negotiations on a trade deal get under way that the real test will come as the political profile and temperature is raised on both sides of the Atlantic.

A ground-breaking research project from Chatham House, supported by The Power of Nutrition, is exploring the business case for tackling undernutrition, micronutrient deficiencies and overnutrition. Companies across all sectors hold huge, transformative power to save countless lives and transform their own financial prospects. To act, they need more compelling evidence of the potential for targeted investments and strategies to promote better nutrition and create healthier, more productive workforces and consumers.

At this workshop, Chatham House will engage business decision-makers in a scenario exercise that explores different nutrition futures and their commercial prospects in each before examining what different strategies business can pursue to maximize future profitability through investments in nutrition.

Attendance at this event is by invitation only.

At the United Nations general assembly in September, all countries, including South Africa, reaffirmed their commitment to achieving universal health coverage by 2030. This is achieved when everybody accesses the health services they need without suffering financial hardship.

As governments outlined their universal health coverage plans, it was noticeable that some had made much faster progress than others, with some middle-income countries outperforming wealthier nations. For example, whereas Thailand, Ecuador and Georgia (with national incomes similar to South Africa) are covering their entire populations, in the United States, 30 million people still lack health insurance and expensive health bills are the biggest cause of personal bankruptcy.

The key factor in financing universal health coverage is, therefore, not so much the level of financing but rather how the health sector is financed. You cannot cover everyone through private financing (including insurance) because the poor will be left behind. Instead, the state must step in to force wealthy and healthy members of society to subsidise services for the sick and the poor.

Switching to a predominantly publicly financed health system is, therefore, a prerequisite for achieving universal health coverage.

The National Health Insurance (NHI) Bill, recently presented to parliament, is President Cyril Ramaphosa’s strategy to make this essential transition. In essence, it proposes creating a health-financing system in which people pay contributions (mostly through taxes) according to their ability to pay and then receive health services according to their health needs.

Surprisingly, these reforms have been dubbed 'controversial' by some commentators in the South African media, even though this is the standard route to universal health coverage as exhibited by countries across Europe, Asia, Australasia, Canada and much of Latin America.

In criticising the NHI other stakeholders (often with a vested interest in preserving the status quo) have said that the government’s universal health coverage strategy is unaffordable because it will require higher levels of public financing for health.

Evidence from across the world shows that this is patently false. South Africa already spends more than 8% of its national income on its health sector, which is very high for its income level. Turkey, for example (a good health performer and slightly richer than South Africa), spends 4.3% of its GDP and Thailand (a global universal health coverage leader) spends only 3.7%. Thailand shows what can be accomplished, because it launched its celebrated universal health coverage reforms in 2002 when its GDP per capita was only $1 900 — less than a third of South Africa’s today.

In fact, Thailand’s prime minister famously ignored advice from the World Bank that it could not afford publicly financed, universal health coverage in the aftermath of the Asian financial crisis when it extended universal, tax-financed healthcare to the entire population. When these reforms proved a great success, a subsequent president of the World Bank, Dr Jim Kim, congratulated the Thai government for ignoring its previous advice.

Similarly the United Kingdom, Japan and Norway all launched successful universal health coverage reforms at times of great economic difficulty at the end of World War II. These should be salutary lessons for those saying that South Africa can’t afford the NHI. If anything, because universal health reforms generate economic growth (with returns 10 times the public investment), now is exactly the time to launch the NHI.

So there is enough overall funding in the South African health sector to take a giant step towards universal health coverage. The problem is that the current system is grossly inefficient and inequitable because more than half of these funds are spent through private insurance schemes that cover only 16% of the population — and often don’t cover even this population effectively.

Were the bulk of these resources to be channelled through an efficient public financing system, evidence from around the world shows that the health sector would achieve better health outcomes, at lower cost. Health and income inequalities would fall, too.

It’s true that in the long term, the government will have to increase public financing through reducing unfair subsidies to private health insurance and increasing taxes. But what the defenders of the current system don’t acknowledge is that, at the same time, private voluntary financing will fall, rapidly. Most families will no longer feel the need to purchase expensive private insurance when they benefit from the public system. It’s this fact that is generating so much opposition to the NHI from the private insurance lobby.

This is the situation with the National Health Service in the UK and health systems across Europe, where only a small minority choose to purchase additional private insurance. Among major economies, only the United States continues to exhibit high levels of private, voluntary financing.

As a consequence, it now spends an eye-watering 18% of its GDP on health and has some of the worst health indicators in the Organisation for Economic Co-operation and Development, including rising levels of maternal mortality. If South Africa doesn’t socialise health financing this is where its health system will end up — a long way from universal health coverage.

What countries celebrating their universal health coverage successes at the UN have shown is that it is cheaper to publicly finance health than leave it to the free market. This is because governments are more efficient and fairer purchasers of health services than individuals and employers. As Dr Gro Harlem Brundtland, the former director general of the World Health Organization, said in New York: 'If there is one lesson the world has learnt, it is that you can only reach UHC [universal health coverage] through public financing.'

This is a step South Africa must take — it can’t afford not to.

This article was originally published by the Mail & Guardian.

At the United Nations General Assembly in September 2019, all governments re-committed their countries to achieving universal health coverage (UHC) whereby ‘all people obtain the health services they need without suffering financial hardship when paying for them’. To achieve UHC, governments will need to oversee health systems that are predominantly publicly financed although countries may use both private and public health providers of health services.

Robert Yates will provide a review of recent transitions towards Universal Health Coverage, highlighting the importance of genuine political commitment by heads of state, and the potential benefits to corporate stakeholders in helping reach this sustainable development goal. What are the political, economic and health benefits of UHC? Why can only public financing mechanisms, rather than a free market in health services, deliver an equitable health system? And what is the role of the private sector within the political economy of UHC?

This event is only open to Major Corporate Member and Partner organizations of Chatham House. If you would like to register your interest, please RSVP to Linda Bedford. We will contact you to confirm your attendance.

To enable as open a debate as possible, this event will be held under the Chatham House Rule.

The world’s second-largest Ebola outbreak is ongoing in the Democratic Republic of the Congo (DRC) and experts from around the world have been parachuted in to support the country’s operation to stamp out the outbreak. The signs are encouraging, but we need to remain cautious.

In such emergencies, little thought is usually given to what happens to the body-fluid samples taken during the course of the outbreak after the crisis is over. What gets left behind has considerable implications for global biosecurity.

Having unsecured samples poses the obvious risk of accidental exposures to people who might come into contact with them, but what of the risk of malicious use? Bioterrorists would have ready access to materials that have the characteristics essential to their purpose: the potential to cause disease that is transmissible from person to person, the capacity to result in high fatality rates and, importantly, the ability to cause panic and social disruption at the very mention of them.

Comparisons can be drawn with the significant international impact of the anthrax attacks in the US in 2001. Not only was there a direct effect in the US with five deaths and a further 17 people infected, but there was a paralysis of public health systems in other countries involved in the testing of countless samples from the so-called ‘white-powder incidents’ that followed.

Many laboratory tests were done purely on a precautionary basis to eliminate any possibility of a risk, no matter how remote. However, the UK was also hit when a hoaxer sent envelopes of white powder labelled as anthrax to 15 MPs.

The threat of the pathogen alone resulted in widespread fear, the deployment of officers trained in response to chemical, biological, radiological and nuclear incidents and the evacuation of a hospital emergency department.

We learned from the 2014–16 West Africa Ebola outbreaks that during the emergency, the future biosecurity implications of the many thousands of samples taken from people were given very little consideration. It is impossible to be sure where they all are and whether they have been secured.

It is widely recognized that the systems needed at the time for tracking and monitoring resources, including those necessary for samples, were weak or absent, and this has to be addressed urgently along with other capacity-building initiatives.

In Sierra Leone, for example, the remaining biosecurity risk is only being addressed after the fact. To help achieve this, the government of Canada is in the process of providing a secure biobank in the Sierra Leonean capital of Freetown. The aim is to provide the proper means of storage for these hazardous samples and to allow them to remain in-country, with Sierra Leonean ownership.

However, it is already more three years since the emergency was declared over by the then director-general of the World Health Organization (WHO), Margaret Chan, and the biobank and its associated laboratory are yet to be fully operational.

There are many understandable reasons for this delay, including the critical issue of how best to ensure the sustainability of any new facility. But what is clear is that these solutions take time to implement and must be planned for in advance.

The difficulties of responding to an outbreak in a conflict zone have been well documented, and the frequent violence in DRC has undoubtedly caused delays in controlling the outbreak. According to figures from WHO, during 2019 approximately 390 attacks on health facilities in DRC killed 11 and injured 83 healthcare workers and patients.

Not only does the conflict inhibit the response, but it could also increase the risk posed by unsecured samples. There are two main potential concerns.

First is the risk of accidental release during an attack on a health facility, under which circumstances sample containers may be compromised or destroyed. Second is that the samples may be stolen for malicious use or to sell them to a third-party for malicious use. It is very important in all outbreaks to ensure the necessary measures are in place to secure samples; in conflict-affected areas, this is particularly challenging.

The sooner the samples in the DRC are secured, the sooner this risk to global biosecurity is reduced. And preparations for the next emergency must be made without further delay.

The following steps need to be taken:

• Affected countries must ‘own’ the problem, with clear national government commitment to take the required actions.
• Funding partners must coordinate their actions and work closely with the countries to find the best solutions.
• If samples are to be kept in-country, secure biobanks must be established to contain them.
• Sustainable infrastructure must be built for samples to be kept secure into the future.
• An international agreement should be reached on the best approach to take to prepare for the aftermath of global health emergencies.

When it comes to emerging infectious diseases – those newly recognized in humans or in new locations – it is not only what we know that matters but also what we do not know.

An outbreak of a new coronavirus first reported in Wuhan, China, which has so far led to more than 500 confirmed cases and multiple deaths across five countries (and two continents) has prompted the question from several corners of the world: Should we be worried?

Although expert teams coordinated by the World Health Organization (WHO) are working on key questions to get answers as soon as possible, the level of uncertainty is still high.

We do not yet know exactly how deadly the disease is, how best to treat those who get sick, precisely how it is spreading, nor how stable the virus is. It is thought that the virus spread from an animal source, but the exact source is yet to be confirmed and the disease is now in human populations and appears to be spreading from human to human.

It is such uncertainty, inherent in emerging infectious disease outbreaks, that warrants concern. Until they are resolved, it is appropriate for the world to be concerned. It is useful to remember that most established scourges of humanity such as HIV, influenza and tuberculosis likely started as emerging infectious diseases that jumped the species barrier from animals to humans.

Shortly after the Chinese authorities reported the first cases of ‘mystery pneumonia’ in Wuhan, China, to WHO, the virus causing the disease was isolated and identified as being part of the coronavirus family. It belongs to the same virus family as SARS, a highly contagious and life-threatening coronavirus that caused a nine-month epidemic in 2003 that affected 26 countries and resulted in more than 8,000 infections and nearly 800 deaths.

A second novel coronavirus that emerged in 2012 and persists today – MERS, or Middle East Respiratory Syndrome – is less contagious (spread by close contact rather than coughing and sneezing).

The differences between the SARS coronavirus and the MERS coronavirus highlight that, despite belonging to the same virus family, pathogens do not necessarily behave in the same way. It is as yet unknown whether the new virus is, or will turn out to be, more like SARS or MERS, or neither. 

Chinese authorities have confirmed that there is human-to-human transmission. However, it is not yet established whether it is sustained, which would make the outbreak more difficult to control. As of 23 January, the number of cases range from 500 confirmed cases up to an estimated 1,700 cases, according to a disease outbreak model by Imperial College London.

Likewise, we do not know to what extent the virus is able to mutate and if so, how rapidly. Generally, coronaviruses are known to be able to mutate, with the risk that a less contagious form of the virus becomes highly contagious. This could have an impact not only on the transmission pattern and rate but also the death rate. The virus could change in either direction, to become either more or less of a threat.

It is important to take a precautionary approach while uncertainty persists. It is also important not to overreact and for measures to be scientifically sound. Concern over this outbreak is due, but panic is not.

Three virtual networks of experts supporting the response – one of virologists, one of epidemiologists and one of clinicians – are working on the key pieces of the jigsaw puzzle: watching the virus, watching the transmission patterns, and watching the people who have been infected. It is crucial to maintain the ongoing investigation of the disease, stay focused on the science and to keep sharing the necessary information.

Read all our analysis on the Coronavirus Response

The coronavirus outbreak comes at a difficult time for China’s ruling party. A tumultuous 2019 saw the country fighting an economic slowdown coupled with an increasingly hostile international environment. As authorities take assertive steps to contain the virus, the emergency has - at least temporarily - disrupted global trade and supply chains, depressed asset prices and forced multinational businesses to make consequential decisions with limited information. 

Against this backdrop, panellists reflect on the country’s nascent economic transition from 2020 onward. What has been China’s progress towards a sustainable innovation-led economy so far? To what extent is the ruling party addressing growing concerns over job losses, wealth inequality and a lack of social mobility? And how are foreign investors responding to these developments in China?

The coronavirus outbreak in China poses a tremendous test for Beijing. Beyond the immediate public health crisis, the Chinese Communist Party faces a stuttering economy, growing public anger and distrust, and a potentially heavy blow to its global reputation.

The hesitant early response to the outbreak sheds light on the way the Chinese bureaucracy approaches crises at a time when the party leadership is tightening control at almost all levels of society. At first, officials in Wuhan attempted to censor online discussions of the virus. This changed only after President Xi Jinping’s call for a much more robust approach was followed by a sudden increase in the state media coverage of the outbreak. There is no doubt that Xi’s intervention will greatly speed up the response to the crisis, which should be welcomed.

Despite China’s experience with the SARS epidemic between 2002 and 2004, the sluggish reaction by officials in Wuhan should not have come as a surprise. The tendency among bureaucrats to play down crises is deeply entrenched. And, ironically, the party leadership’s recent push for greater bureaucratic accountability and its promise of stiffer punishment for those who take a 'do little' approach have also contributed to the habit of covering up disasters.

Xi has launched an ambitious programme to reform the governance of the Communist Party and re-centralize political control. This has reinforced the tendency of officials to avoid making important decisions and instead to wait for instructions from the party leadership.

For decades, local governments have made things happen in China. But with tighter regulation of lower-level bureaucrats, civil servants across the system now seem less ready, and able, to provide their input, making ineffective and even mistaken policy more likely.

Moreover, the coronavirus outbreak could not have happened at a worse time. Last year was tumultuous and saw China fighting an economic slowdown while also dealing with an increasingly hostile international environment. Now, as the authorities take steps to contain the disease, economic activity has come to a near standstill, with public transport curbed and restaurants and entertainment venues shuttered.

This contrasts with SARS, when double-digit growth in gross domestic product enabled Beijing to raise government expenditure to tackle the outbreak. Today, the Chinese economy is running into some of the most difficult challenges it has faced since the global financial crisis.

In response to the slowdown in growth, Beijing has adopted loose fiscal policy, with an emphasis on public investment. It also continues to push big banks to cut interest rates for individual borrowers and small businesses which were already suffering from the effects of the trade war with the US before the coronavirus struck.

The outbreak should give new impetus to governments, not least those that have close economic ties with China. Being a great power with ambitions for global leadership, as well as domestic reform, is not easy. Even without multi-party elections, it involves increasing, and often uncomfortable, scrutiny. As President Xi himself has put it: the road is long and the task is weighty.

This article was originally published in the Financial Times.

Professor Heymann, who previously led the World Health Organization’s response to SARS and has been advising the organization on its response to the coronavirus, outlines the key facts relating to this outbreak and reflect on the challenges it poses. 

An outbreak of a new coronavirus first reported in Wuhan, China has so far spread to dozens of countries, led to tens of thousands of confirmed cases and almost 2,000 deaths. The World Health Organization has declared the situation a global health emergency thereby prompting questions from around the world about how worried the public should be and how can governments, media, civil society and the global health community best tackle new infectious disease outbreaks?

What do we know – and what do we not know – about this coronavirus at the moment? What lessons learned from previous outbreaks have been applied – and not applied – to this outbreak? How can governments and the media balance public awareness and the risk of panic? And what measures can be taken to reduce the risk of stigma and discrimination of populations during this and other outbreaks?

Epidemics, of the size of Covid-19, have huge economic impacts – not just from the costs of managing the health of people, but stopping them, and keeping the economy working. The 10% fall in global stock markets since it became clear that Covid-19 would not be limited to China has boldly highlighted this.

Suppressing the epidemic, but allowing the economy to still function, requires key decisions, in which central banks and finance ministries play a part.

The role of fiscal and monetary authorities in managing an epidemic economy

The scope to use monetary policy to manage the economic impact of Covid-19 is limited. The fact that the underlying cause of the shock is an infectious disease outbreak (rather than a banking crisis, as in 2008-09) and nominal interest rates are currently close to zero in most major advanced economies reduces the effectiveness of monetary policy.

Since 2010, reductions in fiscal deficits mean there is more scope for supportive fiscal action. But even here, high public debt levels and the desire not to underwrite ‘zombie’ companies that may have been sustained by a decade of ultra-low interest rates remain constraints. 

However, outside broad based fiscal and monetary policies there are six ways in which finance ministries and central banks will play a critical role in responding to the crisis.

A first crucial role for finance ministries and central banks is in helping provide the best possible economic evaluation of strict containment measures (trying to isolate each potential case) versus managing the epidemic (delaying the spread of the virus, protecting the most vulnerable and treating the sick, while enabling the majority of people to get on with daily life). Given the economic consequences, they must play a full part, alongside health experts, in advising political leaders on this key decision.

Second, if large numbers of staff are required to work from home to manage the epidemic, they have the lead role in doing whatever is necessary to ensure that financial markets – and thus the wider economy – will continue to function smoothly.

Third, they need to ensure adequate funding for the public health response. Steps that can make an enormous difference to the success of containment strategies, such as strengthening surveillance, and guaranteeing the availability of testing kits and protective equipment for front line health workers, must not fail because of a lack of funding. 

Fourth, they have a lead role in designing targeted economic interventions for the wider economy. Some of these are needed immediately to re-enforce and incentivize strict containment strategies, such as ensuring that employees without full or adequate sick leave cover have the financial support to enable them to report and self-isolate when they get sick. 

Other interventions may help improve the resilience of the economy in accommodating moderate ‘social distancing’ measures; for example, by providing assistance to small firms to help them gear up for home working.

Yet others are needed, as a contingency, to safeguard the most vulnerable sectors (such as tourism, retail and transport) in circumstances where there is a prolonged downturn. The latter may include schemes to allow deferral of tax payments by SMEs, or steps to encourage loan extensions and other forms of liquidity support from the banking system, or by moves to underwrite continued provision of business insurance.

Fifth, national economic authorities will need to play their part in combatting ‘fake news’ through providing transparent and high-quality analysis. This includes providing forecasts on the likely economic impact of the virus under different scenarios, but also detailed information on the support and contingency measures they are considering, so they can be improved and refined through feedback. 

Sixth, they will need to ensure that there is generous international support for poor countries, by ensuring the available multilateral support facilities from the international financial institutions and multilateral development banks are adequately funded and fit for purpose. The World Bank has already announced an initial $12 billion financing package, but much more is likely to be needed.

They also need to support coordinated bilateral aid where this is more effective, as well as special measures to support particularly vulnerable groups, for example, in refugee camps and prisons. Given the importance of distributing sophisticated medical equipment and expertise quickly, it is also important that every effort is made to avoid delays due to customs and migration checks.

Managing the future

The response to the immediate crisis will rightly take priority now, but economic authorities must also play their part in ensuring the world finally takes decisive steps to prevent a repeat of Covid-19 in future.

The experience with SARS, H1N1 and Ebola shows that, while some progress is made after each outbreak, this is often not sustained. This epidemic shows that managing diseases is absolutely critical to the long-term health of global economy, and doubly so in circumstances where traditional central bank and finance ministry tools for dealing with major global economic shocks are limited.

Finance ministries and central banks therefore need to push hard within government to ensure sustained long-term funding of research on prevention and strengthening of public health systems. They also need to ensure that the right lessons are drawn by the private sector on making international supply chains more robust.

Critical to the overall success of the economic effort will be effective international coordination. The G20 was established as the premier economic forum for international economic cooperation in 2010, and global health issues have been a substantive part of the G20 agenda since the 2017 Hamburg Summit. At the same time, G7 finance ministers and deputies remain one of the most effective bodies for managing economic crises on a day-to-day basis and should continue this within the framework provided by the G20.

However, to be effective, the US, as current president of the G7, will need to put aside its reservations on multilateral economic cooperation and working with China to provide strong leadership.

As coronavirus spreads across the globe, states grapple to find the ideal strategy for coping with the global pandemic. And, in China, Singapore, South Korea, the US, the UK, and Europe, divergent policies are a product of state capacity and legal authority, but they also reveal competing views about the optimal role of centralized state authority, federalism, and the private sector.

Although it is too soon to know the longer-term effects, the apparent capacity of centralized state authority in China, South Korea and Singapore to respond effectively and rapidly is making headlines. In the United States, the opposite has been true. 

America’s response is being shaped by its federal structure, a dynamic private sector, and a culture of civic engagement. In the three weeks since the first US case of coronavirus was confirmed, state leaders, public health institutions, corporations, universities and churches have been at the vanguard of the nation’s effort to mitigate its spread.

Images of safety workers in hazmat suits disinfecting offices of multinational corporations and university campuses populate American Facebook pages. The contrast to the White House effort to manage the message, downplay, then rapidly escalate its estimation of the crisis is stark.

Bewildering response

For European onlookers, the absence of a clear and focused response from the White House is bewildering. By the time President Donald Trump declared a national emergency, several state emergencies had already been called, universities had shifted to online learning, and churches had begun to close.

By contrast, in Italy, France, Spain and Germany, the state has led national efforts to shutter borders and schools. In the UK, schools are largely remaining open as Prime Minister Boris Johnson has declared a strategy defined by herd immunity, which hinges on exposing resilient populations to the virus.

But America has never shared Europe’s conviction that the state must lead. The Center for Disease Control and Prevention, the leading national public health institute and a US federal agency, has attempted to set a benchmark for assessing the crisis and advising the nation. But in this instance, its response has been slowed due to faults in the initial tests it attempted to rollout. The Federal Reserve has moved early to cut interest rates and cut them again even further this week.

But states were the real first movers in America’s response and have been using their authority to declare a state of emergency independent of the declaration of a national emergency. This has allowed states to mobilize critical resources, and to pressure cities into action. After several days delay and intense public pressure, New York Governor Andrew Cuomo forced New York City Mayor Bill de Blasio to close the city’s schools.

Declarations of state emergencies by individual states have given corporations, universities and churches the freedom and legitimacy to move rapidly, and ahead of the federal government, to halt the spread in their communities.

Washington state was the first to declare a state of emergency. Amazon, one of the state’s leading employers, quickly announced a halt to all international travel and, alongside Microsoft, donated $1million to a rapid-response Seattle-based emergency funds. States have nudged their corporations to be first movers in the sector’s coronavirus response. But corporations have willingly taken up the challenge, often getting ahead of state as well as federal action.

Google moved rapidly to announce a move allowing employees to work from home after California declared a state of emergency. Facebook soon followed with an even more stringent policy, insisting employees work from home. Both companies have also met with World Health Organization (WHO) officials to talk about responses, and provided early funding for WHO’s Solidarity Response Fund set up in partnership with the UN Foundation and the Swiss Philanthropy Foundation.

America’s leading research universities, uniquely positioned with in-house public health and legal expertise, have also been driving preventive efforts. Just days after Washington declared a state of emergency, the University of Washington became the first to announce an end to classroom teaching and move courses online. A similar pattern followed at Stanford, Harvard, Princeton and Columbia - each also following the declaration of a state of emergency.

In addition, the decision by the Church of the Latter Day Saints to cancel its services worldwide followed Utah’s declaration of a state of emergency.

The gaping hole in the US response has been the national government. President Trump’s declaration of a national emergency came late, and his decision to ban travel from Europe but - at least initially - exclude the UK, created uncertainty and concern that the White House response is as much driven by politics as evidence.

This may soon change, as the House of Representatives has passed a COVID-19 response bill that the Senate will consider. These moves are vital to supporting state and private efforts to mobilize an effective response to a national and global crisis.

Need for public oversight

In the absence of greater coordination and leadership from the centre, the US response will pale in comparison to China’s dramatic moves to halt the spread. The chaos across America’s airports shows the need for public oversight. As New York State Governor Cuomo pleaded for federal government support to build new hospitals, he said: ‘I can’t do it. You can’t leave it to the states.'

When it comes to global pandemics, we may be discovering that authoritarian states can have a short-term advantage, but already Iran’s response demonstrates that this is not universally the case. Over time, the record across authoritarian states as they tackle the coronavirus will become more apparent, and it is likely to be mixed.

Open societies remain essential. Prevention requires innovation, creativity, open sharing of information, and the ability to inspire and mobilize international cooperation. The state is certainly necessary, but it is not sufficient alone.

Linked to the call for a global response to the Covid-19 pandemic that I, Robin Niblett and Creon Butler have outlined, the case for a specific dramatic economic policy gesture from many policymakers in large economies is prescient.

It may not be warranted from all G20 nations, although given the uncertainties, and the desire to show collective initiative, I think it should be G20 driven and inclusive.

We need some sort of income support for all our citizens, whether employees or employers. Perhaps one might call it a truly People’s QE (quantitative easing).

Against the background of the previous economic crisis from 2008, and the apparent difficulties that more traditional forms of economic stimulus have faced in trying to help their economies and their people - especially against a background of low wage growth, and both actual, and perception of rising inequality - other ideas have emerged.

Central banks printing money

Both modern monetary theory (MMT) and universal basic income (UBI) essentially owe their roots to the judgement that conventional economic policies have not been helping.

At the core of these views is the notion of giving money to people, especially lower income people, directly paid for by our central banks printing money. Until recently, I found myself having very little sympathy with these views but, as a result of COVID-19, I have changed my mind.

This crisis is extraordinary in so far as it is both a colossal demand shock and an even bigger colossal supply shock. The crisis epicentre has shifted from China - and perhaps the rest of Asia - to Europe and the United States. We cannot expect policies, however unconventional by modern times, such as the dramatic monetary steps announced by the Federal Reserve Board and others like it, to put a floor under this crisis.

We are consciously asking our people to stop going out, stop travelling, not go to their offices - in essence, curtailing all forms of normal economic life. The only ones not impacted are those who entirely work through cyberspace. But even they have to buy some forms of consumer goods such as food and, even if they order online, someone has to deliver it.

As a result, markets are, correctly, worrying about a collapse of economic activity and, with it, a collapse of companies, not just their earnings. Expansion of central bank balance sheets is not going to do anything to help that, unless it is just banks we are again worried about saving.

What is needed in current circumstances, are steps to make each of us believe with high confidence that, if we take the advice from our medical experts, especially if we self-isolate and deliberately restrict our personal incomes, then we will have this made good by our governments. In essence, we need smart, persuasive People’s QE.

Having discussed the idea with a couple of economic experts, there are considerable difficulties with moving beyond the simple concept. In the US for example, I believe the Federal Reserve is legally constrained from pursuing a direct transfer of cash to individuals or companies, and this may be true elsewhere.

But this is easily surmounted by fiscal authorities issuing a special bond, the proceeds of which could be transferred to individuals and business owners. And central banks could easily finance such bonds.

It is also the case that such a step would encroach on the perception and actuality of central bank independence, but I would be among those that argue central banks can only operate this independence if done wisely. Others will argue that, in the spirit of the equality debate, any income support should be targeted towards those on very low incomes, while higher earners or large businesses, shouldn’t be given any, or very little.

I can sympathise with such spirit, but this also ignores the centrality of this particular economic shock. All of our cafes and restaurants, and many of our airlines, and such are at genuine risk of not being able to survive, and these organisations are considerable employers of people on income.

It is also the case that time is of the essence, and we need our policymakers to act as soon as possible, otherwise the transmission mechanisms, including those about the permanent operation of our post World War 2 form of life may be challenged.

We need some kind of smart People’s QE now.

The measures taken to limit the spread of the coronavirus - in particular social distancing -  come with significant economic costs, as the drop both in demand for goods and services and in supply due to workers being at home sick will create a short-term economic shock not seen in modern times.

Sectors that are usually less affected by regular economic swings such as transport and tourism are being confronted with an almost total collapse in demand. In the airline sector, companies are warning they might only be able to hold out for a few months more.

Building on the calls to provide income support to all citizens and shore up businesses, European leaders should now be giving explicit permission to the European Central Bank (ECB) to provide whatever financial support is needed.

Although political leaders have responded to the economic threat, the measures announced across the continent have mainly been to support businesses. The crisis is broader and deeper than the current response.

Support for weaker governments

The ECB already reacted to COVID-19 by announcing measures to support the banking system, which is important to guarantee the continuity of the European financial system and to ensure financially weaker European governments do not have to confront a failing banking system as well.

Although government-subsidised reduced working hours and sick pay are a solution for many businesses and workers, crucially they are not for those working on temporary contracts or the self-employed. They need direct income support.

This might come down to instituting something that looks like a universal basic income (UBI), and ensuring money keeps flowing through the economy as much as possible to help avoid a cascade of defaults and significant long-term damage.

But while this is likely to be the most effective remedy to limit the medium-term impact on the economy, it is particularly costly. Just as an indication, total compensation of employees was on average around €470bn per month in the eurozone last year.

Attempting to target payments using existing welfare payment channels would reduce costs, but is difficult to implement and runs the risk of many households and businesses in need missing out.

The increase in spending and lost revenue associated with these support measures dwarf the fiscal response to the 2008-09 financial crisis. The eurozone economy could contract by close to 10% this year and budget deficits are likely be in double digits throughout the bloc.

The European Commission has already stated member states are free to spend whatever is necessary to combat the crisis, which is not surprising given the Stability and Growth Pact - which includes the fiscal rules - allows for such eventualities.

Several eurozone countries do probably have the fiscal space to deal with this. Countries such as Germany and the Netherlands have run several years of balanced budgets recently and significantly decreased their debt levels. For countries such as Italy, and even France, it is a different story and the combination of much higher spending and a collapse in tax revenue is more likely to lead to questions in the market over the sustainability of their debt levels. In order to avoid this, the Covid-19 response must be financed collectively.

The Eurogroup could decide to use the European Stability Mechanism (ESM) to provide states with the funds, while suitably ditching the political conditionality that came with previous bailout. But the ESM currently has €410bn in remaining lending capacity, which is unlikely to be enough and difficult to rapidly increase.

So this leaves the ECB to pick up the tab of national governments’ increase in spending, as the only institution with effectively unlimited monetary firepower. But a collective EU response is complicated by the common currency, and particularly by the role of the ECB.

The ECB can’t just do whatever it likes and is limited more than other major central banks in its room for manoeuvre. It does have a programme to buy government bonds but this relies on countries agreeing to a rescue programme within the context of the ESM, with all the resulting political difficulties.

There are two main ways that the ECB could finance the response to the crisis. First, it could buy up more or all bonds issued by the member states. A first step in this direction would be to scrap the limits on the bonds it can buy. Through self-imposed rules, the ECB can only buy up to a third of every country’s outstanding public debt. There are good reasons for this in normal times, but these are not normal times. With the political blessing of the European Council, the Eurosystem of central banks could then start buying bonds issued by governments to finance whatever expenditure they deem necessary to combat the crisis.

Secondly, essentially give governments an overdraft with the ECB or the national central banks. Although a central bank lending directly to governments is outlawed by the European treaties, the COVID-19 crisis means these rules should be temporarily suspended by the European Council.

Back in 2012, the then president of the ECB, Mario Draghi, proclaimed the ECB would do whatever it takes, within its mandate, to save the euro, which was widely seen as a crucial step towards solving the eurozone crisis. The time is now right for eurozone political leaders to explicitly tell the ECB that together they can do whatever it takes to save the eurozone economy through direct support for businesses and households.

The coronavirus pandemic, first detected in Wuhan, China less than three months ago, continues to expand with most countries affected facing unprecedented social and economic impacts. At this juncture, what do we know – and what do we not know – about the COVID-19 pandemic? 

Join us for the first in a weekly series of interactive webinars on the coronavirus with Professor David Heymann helping us to understand the facts and make sense of the latest developments during the global crisis. Why are governments enacting different plans? Is elimination possible without a vaccine? For how long do restrictions need to last? And what happens next?

Professor Heymann is a world-leading authority on infectious disease outbreaks. He led the World Health Organization’s response to SARS and has been advising the organization on its response to the coronavirus. 
 

In the past few weeks, European Union member states have implemented measures such as social distancing, school and border closures and the cancellation of major cultural and sporting events in an effort to curb the spread of COVID-19. Such measures are expected to have significant economic and political consequences, threatening near or total collapse of certain sectors. Moreover, the management of the health and economic crises within the EU architecture has exposed tensions and impasses in the extent to which the EU is willing to collaborate to mitigate pressures on fellow member states.

The panellists will examine the European Union's response to a series of cascading crises and the likely impact of the pandemic on individual member states. Can the EU prevent an economic hit from developing into a financial crisis? Are the steps taken by the European Central Bank to protect the euro enough? And are member states expected to manage the crisis as best they can or will there be a united effort to mitigate some of the damage caused?  

This event is part of a fortnightly series of 'Business in Focus' webinars reflecting on the impact of COVID-19 on areas of particular professional interest for our corporate members.

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