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?

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.

The World Health Organization (WHO) declared the spread of COVID-19 to be a Public Health Emergency of International Concern (PHEIC) on January 30 this year and then characterized it as a pandemic on March 11.

Declaring a PHEIC is the highest level of alert that WHO is obliged to declare, and is meant to send a powerful signal to countries of the need for urgent action to combat the spread of the disease, mobilize resources to help low- and middle-income countries in this effort and fund research and development on needed treatments, vaccines and diagnostics. It also obligates countries to share information with WHO.

Once the PHEIC was declared, the virus continued to spread globally, and WHO began to be asked why it had not yet declared the disease a pandemic. But there is no widely accepted definition of a pandemic, generally it is just considered an epidemic which affects many countries globally.

Potentially more deadly

The term has hitherto been applied almost exclusively to new forms of flu, such as H1N1 in 2009 or Spanish flu in 1918, where the lack of population immunity and absence of a vaccine or effective treatments makes the outbreak potentially much more deadly than seasonal flu (which, although global, is not considered a pandemic).

For COVID-19, WHO seemed reluctant to declare a pandemic despite the evidence of global spread. Partly this was because of its influenza origins — WHO’s emergency programme executive director said on March 9 that ‘if this was influenza, we would have called a pandemic ages ago’.

He also expressed concern that the word traditionally meant moving — once there was widespread transmission — from trying to contain the disease by testing, isolating the sick and tracing and quarantining their contacts, to a mitigation approach, implying ‘the disease will spread uncontrolled’.

WHO’s worry was that the world’s reaction to the word pandemic might be there was now nothing to be done to stop its spread, and so countries would effectively give up trying. WHO wanted to send the message that, unlike flu, it could still be pushed back and the spread slowed down.

In announcing the pandemic two days later, WHO’s director-general Dr Tedros Adhanom Ghebreyesus reemphasised this point: ‘We cannot say this loudly enough, or clearly enough, or often enough: all countries can still change the course of this pandemic’ and that WHO was deeply concerned ‘by the alarming levels of inaction’.

The evidence suggests that the correct message did in fact get through. On March 13, US president Donald Trump declared a national emergency, referring in passing to WHO’s announcement. On March 12, the UK launched its own strategy to combat the disease. And in the week following WHO’s announcements, at least 16 other countries announced lockdowns of varying rigour including Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Hungary, Netherlands, Norway, Poland, Portugal, Serbia, Spain and Switzerland. Italy and Greece had both already instituted lockdowns prior to the WHO pandemic announcement.

It is not possible to say for sure that WHO’s announcement precipitated these measures because, by then, the evidence of the rapid spread was all around for governments to see. It may be that Italy’s dramatic nationwide lockdown on March 9 reverberated around European capitals and elsewhere.

But it is difficult to believe the announcement did not have an effect in stimulating government actions, as was intended by Dr Tedros. Considering the speed with which the virus was spreading from late February, might an earlier pandemic announcement by WHO have stimulated earlier aggressive actions by governments?

Declaring a global health emergency — when appropriate — is a key part of WHO’s role in administering the International Health Regulations (IHR). Significantly, negotiations on revisions to the IHR, which had been ongoing in a desultory fashion in WHO since 1995, were accelerated by the experience of the first serious coronavirus outbreak — SARS — in 2002-2003, leading to their final agreement in 2005.

Under the IHR, WHO’s director-general decides whether to declare an emergency based on a set of criteria and on the advice of an emergency committee. IHR defines an emergency as an ‘extraordinary event that constitutes a public health risk through the international spread of disease and potentially requires a coordinated international response’.

In the case of COVID-19, the committee first met on January 22-23 but were unable to reach consensus on a declaration. Following the director-general’s trip to meet President Xi Jinping in Beijing, the committee reconvened on January 30 and this time advised declaring a PHEIC.

But admittedly, public recognition of what a PHEIC means is extremely low. Only six have ever been declared, with the first being the H1N1 flu outbreak which fizzled out quickly, despite possibly causing 280,000 deaths globally. During the H1N1 outbreak, WHO declared a PHEIC in April 2009 and then a pandemic in June, only to rescind both in August as the outbreak was judged to have transitioned to behave like a seasonal flu.

WHO was criticized afterwards for prematurely declaring a PHEIC and overreacting. This then may have impacted the delay in declaring the Ebola outbreak in West Africa as a PHEIC in 2014, long after it became a major crisis. WHO’s former legal counsel has suggested the PHEIC — and other aspects of the IHR framework — may not be effective in stimulating appropriate actions by governments and needs to be reconsidered.

When the time is right to evaluate lessons about the response, it might be appropriate to consider the relative effectiveness of the PHEIC and pandemic announcements and their optimal timing in stimulating appropriate action by governments. The effectiveness of lockdowns in reducing the overall death toll also needs investigation.

When the H1N1 influenza pandemic struck in 2009, some industrialized countries were well prepared. Many countries’ preparedness plans had focused on preparing for an influenza pandemic and based on earlier alerts over the H5N1 ‘bird flu’ virus, countries had made advanced purchase or ‘sleeping’ contracts for vaccine supplies that could be activated as soon as a pandemic was declared. Countries without contracts scrambled to get supplies after those that already had contracts received their vaccine.

Following the 2009 pandemic, the European Union (EU) developed plans for joint-purchase vaccine contracts that any member state could join, guaranteeing the same price per dose for everyone. In 2009, low-income countries were unable to get the vaccine until manufacturers agreed to let 10 per cent of their production go to the World Health Organization (WHO).

The situation for COVID-19 could be even worse. No country had a sleeping contract in place for a COVID-19 vaccine since nobody had anticipated that the next pandemic would be a coronavirus, not an influenza virus. With around 80 candidate vaccines reported to be in development, choosing the right one will be like playing roulette.

These candidates will be whittled down as some will fail at an early stage of development and others will not get to scale-up for manufacturing. All of the world’s major vaccine pharmaceutical companies have said that they will divert resources to manufacture COVID-19 vaccines and, as long as they choose the right candidate for production, they have the expertise and the capacity to produce in huge quantities.

From roulette to a horse race

Our game now changes from roulette to a horse race, as the probability of winning is a matter of odds not a random chance. Countries are now able to try to make contracts alone or in purchasing consortia with other states, and with one of the major companies or with multiple companies. This would be like betting on one of the favourites.

For example, it has been reported that Oxford University has made an agreement with pharmaceutical company AstraZeneca, with a possibility of 100 million doses being available by the end of 2020. If the vaccine works and those doses materialize, and are all available for the UK, then the UK population requirements will be met in full, and the challenge becomes vaccinating everyone as quickly as possible.

Even if half of the doses were reserved for the UK, all those in high-risk or occupational groups could be vaccinated rapidly. However, as each major manufacturer accepts more contracts, the quantity that each country will get diminishes and the time to vaccinate the at-risk population gets longer.

At this point, it is not known how manufacturers will respond to requests for vaccine and how they will apportion supplies between different markets. You could bet on an outsider. You study the field and select a biotech that has potential with a good production development programme and a tie-in with a smaller-scale production facility.

If other countries do not try to get contracts, you will get your vaccine as fast as manufacturing can be scaled up; but because it is a small manufacturer, your supplies may take a long time. And outsiders do not often win races. You can of course, depending on your resources, cover several runners and try to make multiple contracts. However, you take on the risk that some will fail, and you may have compromised your eventual supply.

On April 24, the WHO co-hosted a meeting with the president of France, the president of the European Commission and the Bill & Melinda Gates Foundation. It brought together heads of state and industry leaders who committed to ‘work towards equitable global access based on an unprecedented level of partnership’. They agreed ‘to create a strong unified voice, to build on past experience and to be accountable to the world, to communities and to one another’ for vaccines, testing materials and treatments.

They did not, however, say how this will be achieved and the absence of the United States was notable. The EU and its partners are hosting an international pledging conference on May 4 that aims to raise €7.5 billion in initial funding to kick-start global cooperation on vaccines. Co-hosts will be France, Germany, Italy, the United Kingdom, Norway and Saudi Arabia and the priorities will be ‘Test, Treat and Prevent’, with the latter dedicated to vaccines.

Despite these expressions of altruism, every government will face the tension between wanting to protect their own populations as quickly as possible and knowing that this will disadvantage poorer countries, where health services are even less able to cope. It will not be a vote winner to offer a share in available vaccine to less-privileged countries.

The factories for the biggest vaccine manufacturers are in Europe, the US and India. Will European manufacturers be obliged by the EU to restrict sales first to European countries? Will the US invoke its Defense Production Act and block vaccine exports until there are stocks enough for every American? And will vaccine only be available in India for those who can afford it?

The lessons on vaccine availability from the 2009 influenza pandemic are clear: vaccine was not shared on anything like an equitable basis. It remains to be seen if we will do any better in 2020.

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.

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.

Street protests demanding greater autonomy and democratization in Hong Kong upended the city for seven months last year. However, with the outbreak of the coronavirus in China in late January, the protests quickly died out. What does this mean for the city's protest movement?

The speaker will argue that, despite the lack of high-profile street rallies, protest in the city is continuing. It is building on and evolving from last year's protest movement albeit in different forms. At the same time, the Hong Kong authorities, emboldened by a hard line from Beijing, have begun cracking down on activists and protesters in the city as they seek to put a lid on dissent ahead of important Legislative Council elections scheduled for this September.

In this webinar, the speaker will look at the current state of dissent in Hong Kong and prospects for Hong Kong's future.

This event will be held on the record.

Despite face-to-face diplomatic meetings being increasingly rare during the current disruption, COVID-19 will ultimately force a redefinition of national security and defence spending priorities, and this could provide the possibility of an improved political climate at RevCon when it happens in 2021.

With US presidential elections due in November and a gradual engagement growing between the EU and Iran, there could be a new context for more cooperation between states by 2021. Two key areas of focus over the coming months will be the arms control talks between the United States and Russia, and Iran’s compliance with the 2015 Joint Comprehensive Plan of Action (JCPOA), also known as the Iran Nuclear Deal.

It is too early to discern the medium- and longer-term consequences of COVID-19 for defence ministries, but a greater focus on societal resilience and reinvigorating economic productivity will likely undercut the rationale for expensive nuclear modernization.

Therefore, extending the current New START (Strategic Arms Reduction Treaty) would be the best, most practical option to give both Russia and the United States time to explore more ambitious multilateral arms control measures, while allowing their current focus to remain on the pandemic and economic relief.

Continuing distrust

But with the current treaty — which limits nuclear warheads, missiles, bombers, and launchers — due to expire in February 2021, the continuing distrust between the United States and Russia makes this extension hard to achieve, and a follow-on treaty even less likely.

Prospects for future bilateral negotiations are hindered by President Donald Trump’s vision for a trilateral arms control initiative involving both China and Russia. But China opposes this on the grounds that its nuclear arsenal is far smaller than that of the two others.

While there appears to be agreement that the nuclear arsenals of China, France, and the UK (the NPT nuclear-weapons states) and those of the states outside the treaty (India, Pakistan, North Korea, and Israel) will all have to be taken into account going forward, a practical mechanism for doing so proves elusive.

If Joe Biden wins the US presidency he seems likely to pursue an extension of the New START treaty and could also prevent a withdrawal from the Open Skies treaty, the latest arms control agreement targeted by the Trump administration.

Under a Biden administration, the United States would also probably re-join the JCPOA, provided Tehran returned to strict compliance with the deal. Biden could even use the team that negotiated the Iran deal to advance the goal of denuclearization of the Korean peninsula.

For an NPT regime already confronted by a series of longstanding divergences, it is essential that Iran remains a signatory especially as tensions between Iran and the United States have escalated recently — due to the Qassim Suleimani assassination and the recent claim by Iran’s Revolutionary Guard Corps to have successfully placed the country’s first military satellite into orbit.

This announcement raised red flags among experts about whether Iran is developing intercontinental ballistic missiles due to the dual-use nature of space technology. The satellite launch — deeply troubling for Iran’s neighbours and the EU countries — may strengthen the US argument that it is a cover for the development of ballistic missiles capable of delivering nuclear weapons.

However, as with many other countries, Iran is struggling with a severe coronavirus crisis and will be pouring its scientific expertise and funds into that rather than other efforts — including the nuclear programme.

Those European countries supporting the trading mechanism INSTEX (Instrument in Support of Trade Exchanges) for sending humanitarian goods into Iran could use this crisis to encourage Iran to remain in compliance with the JCPOA and its NPT obligations.

France, Germany and the UK (the E3) have already successfully concluded the first transaction, which was to facilitate the export of medical goods from Europe to Iran. But the recent Iranian escalatory steps will most certainly place a strain on the preservation of this arrangement.

COVID-19 might have delayed Iran’s next breach of the 2015 nuclear agreement but Tehran will inevitably seek to strengthen its hand before any potential negotiations with the United States after the presidential elections.

As frosty US-Iranian relations — exacerbated by the coronavirus pandemic — prevent diplomatic negotiations, this constructive engagement between the E3 and Iran might prove instrumental in reviving the JCPOA and ensuring Iran stays committed to both nuclear non-proliferation and disarmament.

While countries focus their efforts on tackling the coronavirus pandemic, it is understandable resources may be limited for other global challenges, such as the increasing risk of nuclear weapons use across several regions.

But the potential ramifications of the COVID-19 crisis for the NPT regime are profound. Ongoing tensions between the nuclear-armed states must not be ignored while the world’s focus is elsewhere, and the nuclear community should continue to work together to progress nuclear non-proliferation and disarmament, building bridges of cooperation and trust that can long outlast the pandemic.

Despite face-to-face diplomatic meetings being increasingly rare during the current disruption, COVID-19 will ultimately force a redefinition of national security and defence spending priorities, and this could provide the possibility of an improved political climate at RevCon when it happens in 2021.

With US presidential elections due in November and a gradual engagement growing between the EU and Iran, there could be a new context for more cooperation between states by 2021. Two key areas of focus over the coming months will be the arms control talks between the United States and Russia, and Iran’s compliance with the 2015 Joint Comprehensive Plan of Action (JCPOA), also known as the Iran Nuclear Deal.

It is too early to discern the medium- and longer-term consequences of COVID-19 for defence ministries, but a greater focus on societal resilience and reinvigorating economic productivity will likely undercut the rationale for expensive nuclear modernization.

Therefore, extending the current New START (Strategic Arms Reduction Treaty) would be the best, most practical option to give both Russia and the United States time to explore more ambitious multilateral arms control measures, while allowing their current focus to remain on the pandemic and economic relief.

Continuing distrust

But with the current treaty — which limits nuclear warheads, missiles, bombers, and launchers — due to expire in February 2021, the continuing distrust between the United States and Russia makes this extension hard to achieve, and a follow-on treaty even less likely.

Prospects for future bilateral negotiations are hindered by President Donald Trump’s vision for a trilateral arms control initiative involving both China and Russia. But China opposes this on the grounds that its nuclear arsenal is far smaller than that of the two others.

While there appears to be agreement that the nuclear arsenals of China, France, and the UK (the NPT nuclear-weapons states) and those of the states outside the treaty (India, Pakistan, North Korea, and Israel) will all have to be taken into account going forward, a practical mechanism for doing so proves elusive.

If Joe Biden wins the US presidency he seems likely to pursue an extension of the New START treaty and could also prevent a withdrawal from the Open Skies treaty, the latest arms control agreement targeted by the Trump administration.

Under a Biden administration, the United States would also probably re-join the JCPOA, provided Tehran returned to strict compliance with the deal. Biden could even use the team that negotiated the Iran deal to advance the goal of denuclearization of the Korean peninsula.

For an NPT regime already confronted by a series of longstanding divergences, it is essential that Iran remains a signatory especially as tensions between Iran and the United States have escalated recently — due to the Qassim Suleimani assassination and the recent claim by Iran’s Revolutionary Guard Corps to have successfully placed the country’s first military satellite into orbit.

This announcement raised red flags among experts about whether Iran is developing intercontinental ballistic missiles due to the dual-use nature of space technology. The satellite launch — deeply troubling for Iran’s neighbours and the EU countries — may strengthen the US argument that it is a cover for the development of ballistic missiles capable of delivering nuclear weapons.

However, as with many other countries, Iran is struggling with a severe coronavirus crisis and will be pouring its scientific expertise and funds into that rather than other efforts — including the nuclear programme.

Those European countries supporting the trading mechanism INSTEX (Instrument in Support of Trade Exchanges) for sending humanitarian goods into Iran could use this crisis to encourage Iran to remain in compliance with the JCPOA and its NPT obligations.

France, Germany and the UK (the E3) have already successfully concluded the first transaction, which was to facilitate the export of medical goods from Europe to Iran. But the recent Iranian escalatory steps will most certainly place a strain on the preservation of this arrangement.

COVID-19 might have delayed Iran’s next breach of the 2015 nuclear agreement but Tehran will inevitably seek to strengthen its hand before any potential negotiations with the United States after the presidential elections.

As frosty US-Iranian relations — exacerbated by the coronavirus pandemic — prevent diplomatic negotiations, this constructive engagement between the E3 and Iran might prove instrumental in reviving the JCPOA and ensuring Iran stays committed to both nuclear non-proliferation and disarmament.

While countries focus their efforts on tackling the coronavirus pandemic, it is understandable resources may be limited for other global challenges, such as the increasing risk of nuclear weapons use across several regions.

But the potential ramifications of the COVID-19 crisis for the NPT regime are profound. Ongoing tensions between the nuclear-armed states must not be ignored while the world’s focus is elsewhere, and the nuclear community should continue to work together to progress nuclear non-proliferation and disarmament, building bridges of cooperation and trust that can long outlast the pandemic.

The COVID-19 pandemic has struck the Sahel and West Africa at a time when the region is already under severe pressure from violent insecurity and the effects of climate change on its land, food and water resources.

By the end of April, there had been 9,513 confirmed coronavirus cases across the 17 countries of the region, and some 231 deaths, with the highest overall numbers recorded in Nigeria, Ghana, Guinea, Côte d’Ivoire, Senegal, Niger and Burkina Faso. Low testing rates mean than these numbers give only a partial picture.

The Food Crisis Prevention Network (RPCA) forecast in early April that almost 17 million people in the Sahel and West Africa (7.1 million in Nigeria alone) will need food and nutritional assistance during the coming lean season in June–August, more than double the number in an average year. The combined impact of violent insecurity and COVID-19 could put more than 50 million other people across the region at risk of food and nutrition crisis.

Rippling across the region

The effects of the collapse in global commodity prices, currency depreciations, rising costs of consumer goods and disruptions to supply chains are rippling across the region. And for major oil-exporting countries such as Nigeria, Ghana, Chad and Cameroon, the wipe-out of foreign currency earnings will hammer government revenues just as the cost of food and other critical imports goes up. It is likely that the number of people who suffer the direct health impact of the coronavirus will be far outstripped by the number for whom there will be harsh social and economic costs.

In recent years, valuable protocols and capacities have been put in place by governments in West and Central Africa in response to Ebola and other infectious disease outbreaks.

But inadequate healthcare funding and infrastructure across this region compound the challenge of responding to the spread of the COVID-19 infection – which is testing the resources of even the world’s best-funded public health systems.

Over many years, however, the region has steadily built up structures to tackle humanitarian and development challenges, particularly as regards food security. It has an established system for assessing the risk of food crisis annually and coordinating emergency support to vulnerable communities. Each country monitors climate and weather patterns, transhumance, market systems and agricultural statistics, and terrorist disruption of agricultural productivity, from local community to national and regional level.

The system is coordinated and quality-controlled, using common technical data standards, by the Permanent Interstate Committee for Drought Control in the Sahel (CILSS), a regional intergovernmental body established in 1973 in response to a devastating drought. Collective risk assessments allow emergency support to be mobilized through the RPCA.

For almost three months already, countries in Sahelian West Africa have been working with the World Health Organization to prepare national COVID-19 response strategies and strengthen health controls at their borders. Almost all governments have also opted for domestic curfews, and variations of lockdown and market restrictions.

Senegal has been a leader in rapidly developing Africa’s diagnostic capacity, and plans are under way to speed up production of test kits. Niger was swift to develop a national response strategy, to which donors have pledged €194.5 million. While the IMF has agreed emergency financial assistance to help countries address the urgent balance-of-payments, health and social programme needs linked to the COVID-19 pandemic, signing off $3.4 billion for Nigeria, $442 million for Senegal and $130 million for Mauritania.

Steps are also now being taken towards the formulation of a more joined-up regional approach. Notably, Nigeria’s President Muhammadu Buhari has been chosen by an extraordinary session of the Economic Community of West African States to coordinate the regional response to COVID-19. As Africa’s biggest economy and home to its largest population, Nigeria is a critical hub for transnational flows of goods and people. Its controversial August 2019 land border closure, in a bid to address smuggling, has already painfully disrupted regional agri-food trade and value chains. The active engagement of the Buhari administration will thus be crucial to the success of a multifaceted regional response.

One of the first tough questions the region’s governments must collectively address is how long to maintain the border shutdowns that were imposed as an initial measure to curb the spread of the virus. Closed borders are detrimental to food security, and disruptive to supply chains and the livelihoods of micro, small and medium-sized entrepreneurs that rely on cross-border trade. The impact of prolonged closures will be all the more profound in a region where welfare systems are largely non-existent or, at best, highly precarious.

Nigeria, in particular, with more than 95 million people already living in extreme poverty, might do well to explore measures to avoid putting food further beyond the reach of people who are seeing their purchasing power evaporate.

In taking further actions to control the spread of the coronavirus, the region’s governments will need to show faith in the system that they have painstakingly developed to monitor and respond to the annual risk of food crisis across the Sahel. This system, and the critical data it offers, will be vital to informing interventions to strengthen the four components of food security – availability, access, stability and utilization – in the context of COVID-19, and for charting a post-pandemic path of recovery.

Above all, careful steps will need to be put in place to ensure that preventing the spread of the coronavirus does not come at the cost of even greater food insecurity for the people of the Sahel and West Africa. The region’s governments must prioritize the flow of food across borders and renew their commitment to strategic coordination and alignment.

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?

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.

An infectious disease outbreak has long been a top national security risk in several countries, but the speed and extent of COVID-19’s spread and the scale of its social and economic impact has come as an enormous and deeply worrying shock.

This pandemic is not just a global medical and economic emergency. It could also prove a decisive make-or-break point for today’s system of global political and economic cooperation.

This system was built up painstakingly after 1945 as a response to the beggar-thy-neighbour economic policies of the 1930s which led to the Second World War. But it has been seriously weakened recently as the US and China have entered a more overt phase of strategic competition, and as they and a number of the other most important global and regional players have pursued their narrowly defined self-interest.

Now, the disjointed global economic response to COVID-19, with its enormous ramifications for global prosperity and economic stability, has blown into the open the urgent need for an immediate reaffirmation of international political and economic cooperation.

What is needed is a clear, coordinated and public statement from the leaders of the world’s major countries affirming the many things on which they do already agree, and some on which they should be able to agree.

In particular that:

• they will give the strongest possible support for the WHO in leading the medical response internationally;
• they will be transparent and tell the truth to their peoples about the progress of the disease and the threat that it represents;
• they will work together and with the international financial institutions to provide businesses, particularly SMEs, and individuals whatever support they need to get through the immediate crisis and avoid long-term damage to the global economy; 
• they will ensure the financial facilities for crisis support to countries - whether at global or regional level - have whatever resources they need to support countries in difficulty;
• they will avoid new protectionist policies - whether in trade or finance;
• they commit not to forget the poor and vulnerable in society and those least able to look after themselves.

Such a statement could be made by G20 leaders, reflecting the group’s role since 2010 as the premier forum for international economic cooperation.

But it could be even more appropriate coming from the UN Security Council, recognising that COVID-19 is much more than an economic challenge; and also reflecting the practical fact, in a time when international travel is restricted, the UNSC has an existing mechanism in New York to negotiate and quickly agree such a statement.

A public statement by leading countries could do a great deal to help arrest a growing sense of powerlessness among citizens and loss of confidence among businesses worldwide as the virus spreads.

It could also set a new course for international political and economic cooperation, not just in relation to the virus, but also other global threats with potentially devastating consequences for economic growth and political stability in the coming years.

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.

There were several notable achievements during last week’s Spring meetings. The Fund’s frank set of forecasts for world GDP growth are a grim but valuable reminder of the scale of the crisis we are facing, and the Fund’s richer members will finance a temporary suspension on payments to the IMF for 29 very poor countries.

Most importantly, a boost to the Fund’s main emergency facilities - the Rapid Credit Facility and the Rapid Financing Instrument - now makes $100bn of proper relief available to a wide range of countries. But the core problem is that the vast bulk of the Fund’s firepower is effectively inert.

This is because of the idea of 'conditionality', which underpins almost all of the IMF’s lending relationships with member states. Under normal circumstances, when the IMF is the last-resort lender to a country, it insists that the borrowing government tighten its belt and exercise restraint in public spending.

This helps to achieve three objectives. One is to stabilise the public debt burden, to ensure that the resources made available are not wasted. The second is to limit the whole economy’s need for foreign exchange, a shortage of which had prompted a country to seek IMF help in the first place. And the third is to ensure that the IMF can get repaid.

Role within the international monetary system

Since the IMF does not take any physical collateral from countries to whom it is lending, the belt-tightening helps to act as a kind of collateral for the IMF. It helps to maximise the probability that the IMF does not suffer losses on its own loan portfolio — losses that would have bad consequences for the Fund’s role within the international monetary system.

This is a perfectly respectable goal. Walter Bagehot, the legendary editor of The Economist, established modern conventional wisdom about managing panics. Relying on a medical metaphor that feels oddly relevant today, he said that a panic 'is a species of neuralgia, and according to the rules of science you must not starve it.' 

Managing a panic, therefore, requires lending to stricken borrowers 'whenever the security is good', as Bagehot put it. The IMF has had to invent its own form of collateral, and conditionality is the result. The problem, though, is that belt-tightening is a completely inappropriate approach to managing the current crisis.

Countries are stricken not because they have indulged in any irresponsible spending sprees that led to a shortage of foreign exchange, but because of a virus beyond their control. Indeed, it would seem almost grotesque for the Fund to ask countries to cut spending at a time when, if anything, more spending is needed to stop people dying or from falling into a permanent trap of unemployment.

The obvious solution to this problem would be to increase the amount of money that any country can access from the Fund’s emergency facilities well beyond the $100bn now available. But that kind of solution would quickly run up against the IMF’s collateral problem.

The more the IMF makes available as 'true' emergency financing with few or no strings attached, the more it begins to undermine the quality of its loan portfolio. And if the IMF’s senior creditor status is undermined, then an important building block of the international monetary system would be at risk.

One way out of this might have been an emergency allocation of Special Drawing Rights, a tool last used in 2009. This would credit member countries’ accounts with new, unconditional liquidity that could be exchanged for the five currencies that underpin the SDR: the dollar, the yen, the euro, sterling and the renminbi. That will not be happening, though, since the US is firmly opposed, for reasons bad and good.

So in the end the IMF and its shareholders face a huge problem. It either lends more money on easy terms without the 'collateral' of conditionality, at the expense of undermining its own balance sheet - or it remains, in systemic terms, on the sidelines of this crisis.

And since the legacy of this crisis will be some eye-watering increases in the public debt burdens of many emerging economies, the IMF’s struggle to find a way to administer its medicine will certainly outlive this round of the coronavirus outbreak.

This article is a version of a piece which was originally published in the Financial Times

What is quantitative easing? How was it used after the 2008 financial crisis?

Quantitative easing (QE) has been in existence since the Japanese central bank introduced it at the turn of the millennium. The simplest way to think about it is this: when interest rates can't go down anymore and play their normal role of stimulating growth, central banks try to expand the money supply. So, they're expanding the quantitative amount of money they put into the system. 

Of course, after 2008 because of the scale of the financial and economic collapse, many Western countries resorted to QE. Some have never gotten rid of it. Others have started to, but as a result of this crisis, have gone straight back to that playbook.

33 million Americans have now filed for unemployment and one in five American workers have lost their jobs due to COVID-19. These are levels not seen since the Great Depression. You recently called for G20 countries to provide income support for all citizens. Why is this so urgent to implement now?

It is incredible to reflect back on the short time since I published that piece. I entitled it the need for a so-called people's QE, and in some ways a number of European countries, including the UK, have executed some aspects of what I was suggesting. 

The United States has not, even though the absolute amounts of money the US authorities have put through their fiscal system to try and support the economy is actually bigger as a percentage of GDP than many in Europe. 

What they haven't done is support ongoing employment through various schemes that many European countries have done, of which the UK has, to some degree, been one of the most ambitious.

That’s partly why you see such enormous filing for unemployment claims in the US. There’s no direct support to encourage employers to keep their employees on, in complete contrast to what you see in many Scandinavian countries who were the first to do it in Europe, and something the UK has since done. 

On a practical level, what might a smart people’s QE look like? 

We are living in an extraordinary time. Like many others in my generation, it’s nothing that any of us have gone through. Perhaps economically, the only parallel one can find is from the 1920s and 1930s.

It became obvious to me in early March that governments are going to have to essentially force as many of us as possible, if we weren't doing absolutely crucial necessities, to stop working or to work from home. It was pretty obvious that the consequences could be horrific. 

So, the idea of a people's QE that I suggested then, some would have regarded as quite audacious. The most dramatic thing that could be done was, to put it simply, governments effectively pay for every business and every employee to have a two month paid holiday. Obviously, this would cost a very large amount of money for governments, but it would be the least disruptive way of getting us all to stay home.

And when the time is right to start letting us get back to anything vaguely like normality, there wouldn't be as much permanent disruption. I think about six weeks have passed since I wrote that piece. Actually, given the policies many governments have announced, I'm not sure undertaking the audacity in generosity of what I suggested would have cost any more. Over the long term, it might have actually turned out to be less. 

Of course, there are ethics issues around whether the system could be gamed or not, amongst other issues. But six weeks later, I still believe that would have been the smartest thing to do. It certainly would have been much better than trying to encourage many businesses, particularly smaller ones, to take out loans.

A couple of countries got close to what I was suggesting – Germany and Switzerland were very quick to give 100% government guarantees to business, as well as generous wage support systems. But a number of other countries haven't, like the US, even though they wrote a $1200 check for each citizen. 

Should a people’s QE involve the purchase and write off of consumer debt and student debt by a central bank? 

I think these things might have to be considered. I remember being on a conference call to Chatham House members where we discussed what would be the likely economic consequences and what policymakers should do. One person on the call was talking about quite conventional forms of policy just through various forms of standard QE. 

During the Q&A, someone asked whether we thought the US Federal Reserve might end up buying equities. And I said, well, why not? Eventually, it might come to that. 

Actually, before that discussion was over, the Fed coincidentally announced they were going to buy high-yield corporate bonds, or very risky company debt. This is something that would have been unheard of even by the playbook of 2008. 

So, I don't think ideas like a kind of provision to help student debtors is entirely crazy. These are things that our policymakers are going to have to think about as we go forward in the challenging and unpredictable days and weeks ahead. 

Poorer countries like El Salvador have gone as far as cancelling rent and major utility bills for its citizens. Do you think countries like the US and UK have gone far enough to help people during the crisis?

Going one step further than a people’s QE and postponing major payments is a pretty interesting concept. I think in reality, it would be very disruptive to the medium to long-term mechanism of our societies. It could be very, very complicated. 

But, of course, some parts of the G20 nations, including the UK, have moved significantly in these areas as it relates to rent payments or mortgage payments. There have been significant mortgage holidays being introduced for many sectors of our community. I think the British government has been quite thoughtful about it without doing the whole hog of potentially getting rid of our transaction system for two months or beyond.

You know, this may well be something that has to be considered if, God forbid, there is a second peak of the virus. If countries come out of a lockdown and all that results in is a dramatic rise in infections and then death again, we're going to end up right back where we are. Policymakers may have to implement more generous versions of what we've done already, despite what the long term debt consequences could be.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act in the US has been criticized as a corporate bailout while offering little to the American people. It was recently reported that hedge fund managers are applying for bailouts as ‘small businesses.’ Do you think more oversight is needed in how the stimulus funds are allocated? 

The speed at which many countries have responded and introduced policies means that there's going to be some gaping holes which allow people to unfairly benefit from the system. And if indeed, that were to be the case, I cannot see why a hedge fund should benefit from government generosity.

A true hedge fund is supposed to be a form of investment manager that thrives in times of great volatility, and knows how to better navigate such financial markets than more conventional funds. So this shouldn’t be an environment where hedge funds seek the same kind of help as small businesses. That is certainly something the government should be very careful about.

Some economists argue that central banks are not independent as they finance fiscal spending through purchase of government bonds. Do the strong measures taken by central banks in response to the crisis undermine the argument for central bank independence? 

In my view, an effective central bank has to do whatever is necessary, including doing very unconventional things, when the society in which that central bank operates needs it. 

Most of the time, central banks are pretty boring places, but they really become crucial organizations when we go through times like the 1920s, 1930s, 2008, and of course, this current crisis. If they want to maintain their legitimacy, whatever the true parliamentary or congressional legal standing is, they have to do things quickly and as we've seen in this case, differently than the convention in order to do what our societies need. 

Somebody was asking me just last week whether the Fed buying high grade debt was legal or not. I think that’s a pretty irrelevant conversation because if it’s not legal now, it will be made legal tomorrow. So, I think central banks have to keep their legitimacy and they have to do what is necessary when the time requires it. In that sense, I think most central banks have handled this crisis so far pretty well.

An infectious disease outbreak has long been a top national security risk in several countries, but the speed and extent of COVID-19’s spread and the scale of its social and economic impact has come as an enormous and deeply worrying shock.

This pandemic is not just a global medical and economic emergency. It could also prove a decisive make-or-break point for today’s system of global political and economic cooperation.

This system was built up painstakingly after 1945 as a response to the beggar-thy-neighbour economic policies of the 1930s which led to the Second World War. But it has been seriously weakened recently as the US and China have entered a more overt phase of strategic competition, and as they and a number of the other most important global and regional players have pursued their narrowly defined self-interest.

Now, the disjointed global economic response to COVID-19, with its enormous ramifications for global prosperity and economic stability, has blown into the open the urgent need for an immediate reaffirmation of international political and economic cooperation.

What is needed is a clear, coordinated and public statement from the leaders of the world’s major countries affirming the many things on which they do already agree, and some on which they should be able to agree.

In particular that:

• they will give the strongest possible support for the WHO in leading the medical response internationally;
• they will be transparent and tell the truth to their peoples about the progress of the disease and the threat that it represents;
• they will work together and with the international financial institutions to provide businesses, particularly SMEs, and individuals whatever support they need to get through the immediate crisis and avoid long-term damage to the global economy; 
• they will ensure the financial facilities for crisis support to countries - whether at global or regional level - have whatever resources they need to support countries in difficulty;
• they will avoid new protectionist policies - whether in trade or finance;
• they commit not to forget the poor and vulnerable in society and those least able to look after themselves.

Such a statement could be made by G20 leaders, reflecting the group’s role since 2010 as the premier forum for international economic cooperation.

But it could be even more appropriate coming from the UN Security Council, recognising that COVID-19 is much more than an economic challenge; and also reflecting the practical fact, in a time when international travel is restricted, the UNSC has an existing mechanism in New York to negotiate and quickly agree such a statement.

A public statement by leading countries could do a great deal to help arrest a growing sense of powerlessness among citizens and loss of confidence among businesses worldwide as the virus spreads.

It could also set a new course for international political and economic cooperation, not just in relation to the virus, but also other global threats with potentially devastating consequences for economic growth and political stability in the coming years.