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© 2022 International Monetary Fund WP/22/68
IMF Working Paper
Research Department
A Global Strategy to Manage the Long-Term Risks of COVID-19
Prepared by Ruchir Agarwal, Jeremy Farrar, Gita Gopinath, Richard Hatchett, and Peter Sands
Authorized for distribution by Pierre-Olivier Gourinchas
April 2022
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
ABSTRACT: The pandemic is not over, and the health and economic losses continue to grow. It is now evident that COVID-19 will be with us for the long term, and there are very different scenarios for how it could evolve, from a mild endemic scenario to a dangerous variant scenario. This realization calls for a new strategy that manages both the uncertainty and the long-term risks of COVID-19. There are four key policy implications of such as strategy. First, we need to achieve equitable access beyond vaccines to encompass a comprehensive toolkit. Second, we must monitor the evolving virus and dynamically upgrade the toolkit. Third, we must transition from the acute response to a sustainable strategy toward COVID-19, balanced and integrated with other health and social priorities. Fourth, we need a unified risk-mitigation approach to future infectious disease threats beyond COVID-19. Infectious diseases with pandemic potential are a threat to global economic and health security. The international community should recognize that its pandemic financing addresses a systemic risk to the global economy, not just the development need of a particular country. Accordingly, it should allocate additional funding to fight pandemics and strengthen health systems both domestically and overseas. This will require about $15 billion in grants this year and $10 billion annually after that.
| JEL Classification Numbers: | H4, I1, L6, O4 |
| Keywords: | COVID-19, pandemics, systemic risks, economic crisis |
| Authors’ E-Mail Addresses: | ragarwal@imf.org; j.farrar@wellcome.org; ggopinath@imf.org; richard.hatchett@cepi.net; peter.sands@theglobalfund.org |
| JEL Classification Numbers: | H4, I1, L6, O4 |
| Keywords: | COVID-19, pandemics, systemic risks, economic crisis |
| Authors’ E-Mail Addresses: | ragarwal@imf.org; j.farrar@wellcome.org; ggopinath@imf.org; richard.hatchett@cepi.net; peter.sands@theglobalfund.org |
Title Page
WORKING PAPERS
A Global Strategy to Manage the Long-Term Risks of COVID-19
Prepared by Ruchir Agarwal (IMF), Jeremy Farrar (Wellcome), Gita Gopinath (IMF), Richard Hatchett (CEPI), and Peter Sands (Global Fund)*
Contents
I. Introduction
Central Pivot: Recognize that COVID-19 is with us for the long term and that there are very different scenarios for how it could evolve
II. COVID-19 Scenarios and Long-Term Risks
III. A Comprehensive and Dynamic Toolkit (Policy Implications 1 and 2)
IV. A Balanced and Integrated Global Response (Policy Implication 3)
V. A Unified Approach to Reduce Global Risks (Policy Implication 4)
VI. Financing
VII. Closing Thoughts
VIII. References
FIGURES
1. Pandemic Impact on World GDP
2. Over 100 countries are not on track to meet the mid-2022 vaccination target of 70%
3. Testing rates remain low and unequal worldwide
4. Illustration of a Comprehensive COVID-19 Toolkit Approach
TABLES
1. Summary of the Central Pivot and its Implications
2. Four Possible Post-Omicron Scenarios and Priorities