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How donor funds pouring in to tackle COVID-19 but sans of holistic and integrated approach

In their initial response plans to COVID-19 pandemic, the funding agencies were focused on healthcare by strengthening prevention, detection, surveillance, and case management but now they seem to diversify their funding pattern. However, except the projects specific to the management of COVID-19 cases, the funds provided by these agencies are largely as per their agenda in the pre-COVID-19 period.

COE-EDPCOE-EDP | Updated: 27-06-2020 03:52 IST | Created: 27-06-2020 03:52 IST
How donor funds pouring in to tackle COVID-19 but sans of holistic and integrated approach
Image Credit: Flickr

In this period of over five months, since enforcement of the first lockdown in Wuhan city of China on January 23 followed by the declaration of COVID-19 a Public Health Emergency of International Concern (PHEIC) by World Health Organization (WHO) on January 30, almost all the countries are facing health and socio-economic crises due to the pandemic and lockdown. The problems of developing and low-income countries are multidimensional due to a lack of resources.

Some of these countries in Africa, Asia, Oceania, and Latin America have a history of high morbidity and also seasonal cycles of infectious diseases in their territories. The spread of COVID-19 has multiplied the burden of healthcare on their limited resources leading to the biggest ever crash of economic growth. The highly infectious nature of the virus has forced economies to strengthen their healthcare systems as a top priority to save lives and restore the confidence of people.

Therefore, public healthcare has come at the core of financial assistance programs of international funding agencies such as the World Bank, Asian Development Bank (ADB), African Development Bank (AfDB), International Monetary Fund (IMF), Asian Infrastructure Investment Bank (AIIB), and European Union, etc. These organizations have launched dedicated programs in response to COVID-19 to help nations in speedy economic recovery from the adverse impacts of the pandemic. The present analysis, on the basis of the approved projects of these funding agencies, makes an attempt to track the transition trajectory of global developmental interventions in the immediate post-pandemic world.

Public Healthcare

Investments in the public healthcare sector were a primary focus in the initial months of the pandemic. The funding agencies have earmarked their financial supports to be used on immediate healthcare needs, including the purchase of medical equipment, personal protective equipment (PPE) and test kits, and equipping of intensive care units such as ventilators, cardiac monitors, portable x-ray machines, etc. Gradually, the scope of expenditure was diversified. Some of the diversified projects are as follows:

  • AfDB on June 9, approved $9m grant to Sahel group (G-5) of countries - Mauritania, Mali, Burkina Faso, Niger, and Chad- to build capacity to curb and stop the spread of the COVID-19. The Project will support epidemiological surveillance and case management capacity; make available medical products for COVID-19 prevention, control, and treatment; ensure the deployment of social protection measures in targeted communities, especially, internally displaced persons, refugees, and their host communities; and strengthen food and nutrition system.
  • World Bank committed $100 m to Serbia to set up two walk-in testing points at two airports and up to ten drive-through testing points for COVID-19 to increase testing capacity from 7,000 to at least 9,000 tests a day.
  • The European Commission on May 27, proposed borrowing of about 7.7 billion euros ($8.49 billion) on financial markets to fund extra spending on vaccines, drugs, and healthcare over the next four years and reduce its dependency on foreign supplies. The plan, which requires approval from EU member governments and lawmakers, would complement a $2.6 billion emergency fund which could also be deployed to address medical shortages in the bloc highlighted by the COVID-19 pandemic.
  • Tajikistan got a grant of $50m from ADB to mitigate the adverse economic and social impacts of the coronavirus disease outbreak. The fund will be used in scaling up the availability of medical supplies and establishing quarantine facilities in at least 14 hospitals nationwide with separate wards for women and men. Salary increases will be provided for all frontline COVID-19 medical personnel, of which at least 80% are women.
  • All the 27 members of the European Commission (EU) on June 12, unanimously supported a plan to use an emergency fund of currently 2.4 billion euros ($2.7 billion) to buy coronavirus vaccines upfront. The EU is planning a vaccination strategy that would target the most vulnerable, which would reduce the number of doses immediately needed, and the upfront payments. Under the advanced purchasing plans, the EU would buy or commit to buying promising vaccines before they are ready, taking the risk of potential clinical failures. In exchange, it would get priority access to the shots.
  • Benin received about $40 m of emergency funding out of which $20m are earmarked for Regional Disease Surveillance Systems Enhancement Project (REDISSE). Chad also received a $16.9m grant to enhance surveillance, testing capacity, detection, and contract tracing projects.
  • World Bank on June 17 has decided to pump $400 million into a universal health insurance scheme of Egypt launched in 2018 with its support of $530 million.

Food Security

The crisis of food security is an indirect fall out of the pandemic caused by lockdowns. As the lockdown increased from weeks to months, the food security emerged even a bigger crisis than the pandemic in several low-income countries of Africa, Latin America, and South Asia. These countries are now receiving funds to ensure food security for their people.

World Bank has approved $10.5 million funding support to Liberia for its COVID-19 food security, nutrition, and livelihood plan aimed at mitigating the impacts of the coronavirus on the country's food security and livelihood. Besides, AfDB launched Feed Africa Response to COVID-19 (FAREC) to pave the way for a comprehensive intervention to build resilience, sustainability, and regional self-sufficiency in Africa's food security systems and help farmers cope with coronavirus-related disruptions to the agricultural value chain. FAREC forms one part of the Bank's COVID-19 Response Facility (CRF) of up to $10 billion. The CRF is the Bank's primary channel to deploy financial and technical measures to cushion African economies and livelihoods against the health, social and economic impacts of the pandemic. According to the World Food Program, over 40 million people will face food insecurity alone in West Africa.

Various international organizations have warned about a huge food security crisis throughout the world particularly in the poor countries of Africa, Latin America, and Asia. International Rescue Committee (IRC) has estimated an additional requirement of $1.7 billion to limit the food insecurity for refugees and vulnerable populations in COVID-hit countries like Yemen, Afghanistan, and Somalia which are conflict-affected countries as well.

Income Security

World Bank on May 29, approved US$ 500 million primarily to provide immediate relief to poor and low-income Filipinos plus small business workers who lost their income as a result of the work stoppages induced by the coronavirus pandemic.

Philippines is providing social assistance to 18 million poor and vulnerable Filipinos badly hit by COVID-19, including additional subsidies in the monthly cash transfers given to 4.3 million beneficiaries of the Pantawid Pamilyang Pilipino Program (4Ps); expansion of social assistance to 13.6 million affected households that are not part of the program; and support for repatriated overseas Filipino workers. Earlier, the World Bank had approved $100 million for health emergency preparations for the Philippines.

ADB has approved a $26.4 million loan to lessen the adverse socio-economic impacts of the coronavirus disease (COVID-19) pandemic on poor and vulnerable groups in Mongolia, especially for women and children. The Shock-Responsive Social Protection Project will expand food support and cash transfers on a temporary basis. The income security is also being implemented by the USA, Canada, several European countries, India and New Zealand either through the financial support of funding agencies or from their own resources.

Job Creation

Palestinian IT sector got a $15 million grant to improve sustainable economic opportunities and jobs for youths. The new Technology for Youth and Jobs (TechStart) Project aims to help the Palestinian IT sector upgrade the capabilities of firms and create more high-quality jobs. According to the world bank, Palestinian produce about 3,000 IT graduates every year, and most of them do not have a job. Moreover, the sector is less vulnerable during crises and can accommodate remote work during times like the COVID-19 pandemic or other restrictions on movement.

Tourism accounts for about 10 percent of Thailand's economy. The country has announced a $707m subsidy package to promote domestic tourism from July to October. Though the major part of the package will be paid to the tourists in the form of incentives to stay, travel, and other kinds of expenditure. Similarly, Spain has also announced a 4.25 billion euro ($4.78 billion) plan to help the crucial tourism industry recover from the coronavirus crisis from its own resources.

Human Capital

Central African nation D R Congo will receive $1 billion from World Bank for two projects – $800 million universalization of primary education system and remaining for maternity and childcare programs in the country. According to World Bank estimates the project will enable over nine million children to re-enroll and stay in school when schools reopen after the lockdown and will provide access to school for more than a million poor children currently excluded from the education system.

Budgetary Support

The long term lockdowns have threatened huge revenue losses to economies which is likely to adversely affect their sustainable development and social security programs. Several countries are now approaching the global funding agencies to help their economies rolling. These budgetary supports are generally of big amounts and in the form of long term loans.

North African country Tunisia has been assured a financial package of about $600-700 million for the current year through a coordinated and substantial international support package to help Tunisia respond to the COVID-19 crisis, includes contributions from the World Bank, KfW (Germany), Agence Française de Développement (AFD) Group, Japan International Cooperation Agency, and the African Development Bank; and it has been closely coordinated with macro-financial assistance provided by the European Union.

Through this financial assistance, Tunisia is expected to improve its business climate particularly in terms of digitalization and interoperability. The World Bank's contribution to the joint budget support engagement will focus on three interdependent pillars in the government's reform program—namely to accelerate social safety net reforms and financial inclusion; to enable private sector recovery by modernizing port operations and leveraging private financing for renewable energy production; to improve the transparency and performance of State-Owned Enterprises.

Kenya has planned to use $212 million provided by the AfDB, in strengthening the health system to effectively respond to the pandemic, build economic resilience, and ensure a quick recovery. The Bank's intervention will also be used to support the poor and vulnerable people who have been negatively affected by the pandemic and provision of support to local businesses and to sustaining jobs. In neighboring Somalia, the world bank, through International Development Assistance (IDA), provided $55 million to support the revenue losses in the 2020 budget due to COVID-19. The budget will be used in economic recovery primarily for the direct cash transfer scheme. According to budget estimates, the country will face the expenditure gap due to 29% domestic revenue shortfall and 2.5% GDP contraction in 2020. International Monetary Fund (IMF) has also provided a $220.46 m loan to Rwanda to finance the country's urgent balance of payments and budget needs.

ADB's COVID-19 Active Response and Expenditure Support (CARES) Program is primarily meant for budgetary support to member countries in mitigating the adverse economic impacts of the pandemic. India has availed a $1.5 billion loan from CARES program to enhance response to the COVID-19 pandemic, focusing on immediate priorities such as disease containment and prevention, as well as social protection for the poor and economically vulnerable sections of the society, especially women and disadvantaged groups.

South Asia's other major economy, Pakistan also received a $1.5 billion corpus fund under CARES Program co-funded by ADB, World Bank, and Asian Infrastructure Investment Bank (AIIB). Besides health, CARES program fund is aimed at delivery of social protection programs to the poor and vulnerable, expand health sector capabilities, and deliver a pro-poor fiscal stimulus to boost growth and create jobs.

South Africa managed a $1 billion COVID-19 emergency loan from the New Development Bank established by the BRICS group of emerging nations to reduce the socio-economic impacts of the pandemic.

Conclusion and Agenda for Discussion

The above analysis indicates that the global funding agencies are trying to diversify from their immediate clinical approach to the COVID-19 outbreak. However, their response to the pandemic seems conservative as they are more focused on COVID-19 disease but the emphasis is lacking on other diseases which increase morbidity making people more vulnerable to infectious diseases and metabolic disorders. However, except for the projects specific to the management of COVID-19 cases, the funds provided by these agencies are largely are as per their previous agenda in the pre-COVID-19 period.

We should not forget the extent of infectious diseases such as malaria, dengue, viral fever, Japanese fever, seasonal diseases, and monsoon related diseases in several countries. In the dazzle of COVID-19, the medical system of various countries seems unaware of the extent of several metabolic and infectious diseases as they are not in the limelight of media.

There is a need for a holistic and integrated approach for development to which health is at the core with a strong health management information system. This is crucial to develop a pandemic resilient development model. The piecemeal approach will not work. Today, we have COVID-19 but tomorrow there will be any new disease outbreak or disaster. The development professionals, besides planning swift recovery from the current pandemic, should also develop a new developmental approach that could save humanity from unforeseen disease outbreaks and unknown disasters. In such a situation, it's also the responsibility of recipient countries to plan for short terms, mid-term, and long term pandemic resilience systems that could save their people and economies from disease outbreaks and natural disasters in the future.

Centre of Excellence on Emerging Development Perspectives (COE-EDP) is an initiative of VisionRI and aims to keep track of the transition trajectory of global development and works towards conceptualization, development, and mainstreaming of innovative developmental approaches, frameworks, and practices.


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