Gordon Brown has issued a stark warning about “profiteering” over vital medical supplies after Chief Medical Officer Chris Whitty spoke of a global bottleneck in securing testing kits and equipment.
The former PM said to avoid “dog-eat-dog bidding wars” the G20 should step up efforts to co-ordinate and vastly increase production and procurement of key medical supplies and to build – over time – a global inventory, stockpile and workforce with tariffs and other protectionist barriers removed.
“When the G20 was called to deal with the 2008 global financial crisis, we had to overcome American scepticism, G7 hesitancy, Chinese pressure to restrict its remit and French pressure to broaden it.
“Such was the jockeying for places that not 20 but 23 countries attended the London summit. Their greatest disagreement was not over the $1 trillion stimulus but over tax havens. We agreed a short-term global fiscal target but could not agree a medium-term growth target .
“Our plan – to radically reframe global institutions for the age of global capital flows and global supply chains – failed. But, at least, all present came to realise that if we did not stand together, we would certainly fall separately and it was the unanimous commitment to shared objectives, built on the solid rock of practical measures, that helped restore confidence where weeks before there had been none.
“It is a confidence that G20 leaders, through their actions in this unique health and economic crisis, need to rebuild today.
“They have had to make a dire trade-off because the more aggressively we confront our global medical emergency – by shutting down workplaces – the worse the global economic emergency we face and so the greater the need for co-ordinated action to slow and reverse each national economy’s downward slide.
“Yet such is the mismatch between the need for international co-operation and our current willingness to undertake it, that G20 ambition seems in inverse proportion to the sheer enormity of the global challenge ahead.
“With the healthcare crisis, the idea of individual self-isolation is now commonplace but on the international stage, national self-isolation has taken off. In the post-Cold War unipolar era, America acted multilaterally. Now, and in a multipolar era, America acts unilaterally, and aggressive ‘America first’, ‘us-versus-them’ nationalism – along with ‘China first’, ‘India first’ ‘Russia first,’ ‘Brazil first’, and ‘Turkey first’ – is going global.
“But even the most isolationist nations must know that it is not enough to stop coronavirus in one country: it has to be stopped in every country.
“The G20 should underwrite and speed up the concerted global effort to develop, manufacture and distribute vaccines and treatments. Almost simultaneously every nation also needs – at scale – testing kits, ventilators, cleaning chemicals and protective equipment.
“So, in place of today’s dog-eat-dog bidding wars that encourage profiteering, the G20 should come behind the WHO and Global Fund’s efforts to co-ordinate and vastly increase production and procurement of these key medical supplies and to build – over time – a global inventory, stockpile and workforce, with tariffs and other protectionist barriers removed.
“Nothing should prevent what is mass produced in and for one country being also mass produced for other countries.
“Synchronised G20 monetary fiscal and anti-protectionist measures quickly restored growth in 2010 and could, say the Organisation for Economic Co-operation and Development (OECD), inject $2 trillion into the world economy, multiplying the impact of individual national action.
“And how much stronger and more stable the world would be if each systematically important central bank simultaneously repeated what the US Fed has done – and if also, in the wake of unprecedented $83billion capital outflows from emerging markets, the IMF announced a new SDR allocation.
“And that strength and stability could be even more effectively advanced if there was a synchronised fiscal stimulus – well in excess of 2009’s 2% of global GDP. Europe (whose stimuli currently vary from 1 to 4 per cent of GDP) and China (in 2009 their stimulus was 7% of GDP, compared with 2% today ) must now match the fiscal firepower of America and Britain.
“Fiscal policy is doubly important because issues of fairness loom so large. Those with the least – the poorest and most vulnerable – bear the greatest burden and will suffer most when debts must be repaid, so urgent G20 action is key to avoiding a second decade of austerity and lowering the risk of even more authoritarian waves of populist nationalism.
“And while it has no formal executive to discharge its decisions, the G20 should form a task force, bringing together and co-ordinating the work of political leaders, medical experts and the heads of the key international institutions .
“If Africa’s rates of infection, now doubling fast, were to approach Asia’s and the disease spread further via refugees and mass migration, funds such as the World Bank’s $14 billion fast-track facility would quickly be exhausted.
“The World Bank’s Pandemic Fund has only $14 million and World Health Organisation’s January appeal for $675 million (African health alone now needs $380 million) was never fully answered.
“Compare this with the 2009 response when World Bank IBRD funding went from $16 billion to $46 billion.
“So the G20 should look afresh at fully funding the WHO; replenishing GAVI, the vaccination fund; and, as the World Bank reaches its lending ceiling, promise it extra resources for countries in need.
“One immediate cost-effective option, is the new International Finance Facility for Education (IFFEd). With countries already redirecting their grants and loans from investments in human capital to macro-economic support and social safety nets, IFFEd could make good that loss and take on an additional remit: that of helping train the 18 million health workers that developing countries need.
“The G20 has yet to fulfil its potential as the world’s premier economic forum. There are precedents. Out of the carnage of World War Two came the UN, the IMF, World Bank and WHO.
“The 1973 oil shock produced the G7 and the 2008 financial crisis led to today’s G20 and the Global Financial Stability Board – all significant innovations but a long way short of the radical reforms of the international architecture which the G20 should now champion.
“Out of this crisis must come not only the reforms to the international architecture left on the table in 2009 but new levels of co-operation that will deliver a quantum leap: a commitment to deliver the global public goods urgently needed by a world beginning to understand that it is both far more interdependent and far more fragile than ever.”
A version of this article first appeared in the Financial Times.