From Panic and Neglect to Investing in Health Security Financing Pandemic Preparedness at a National Level International Working Group on Financing Preparedness From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level INTERNATIONAL WORKING GROUP ON FINANCING PREPAREDNESS INTERNATIONAL WORKING GROUP ON FINANCING PREPAREDNESS Peter Sands (Chair), Harvard Kennedy School Dominic Casserley, formerly Willis Towers Watson Rodrigo Chaves, World Bank Group Timothy G. Evans, World Bank Group Sanjeev Gupta, International Monetary Fund Judith Hazlewood, McKinsey & Company Dean Jamison, University of Washington Donald Kaberuka, African Development Bank Marie-Paule Kieny/Agnes Soucat, World Health Organization Outi Kuivasniemi, Ministry of Social Affairs and Health, Finland Soonman Kwon, Asian Development Bank Jane Pepperall, Department of Foreign Affairs and Trade, Australia Alwyn Didar Singh, Federation of Indian Chambers of Commerce and Industry Oyewale Tomori, Nigeria Academy of Science Jeanette Vega, Fondo Nacional de Salud, Chile Ron Waldman, United States Agency for International Development Edward Whiting, Wellcome Trust Ngaire Woods, Blavatnik School of Government Statements, recommendations, and opinions expressed are those of the International Working Group on Financing Preparedness (IWG). The World Bank served as Secretariat for the IWG. The World Bank team was led by Mukesh Chawla, and included (in alphabetical order, by last name), Franck Berthe, Senior Livestock Specialist; Eleonora Cavagnero, Senior Economist; Erika Hartingh, Consultant; Samhita Kumar, Consultant; Adrienne McManus, Consultant; Rocio Schmunis, Operations Officer; and Gabrielle Williams, Consultant. The World Bank team was supported by Anas El Turabi, Doctoral Candidate in Health Policy, Graduate School of Arts and Sciences, Harvard University; and Philip Saynisch, Doctoral Candidate in Health Policy, Harvard Business School and Graduate School of Arts and Sciences, Harvard University. Analytical support was also provided by McKinsey & Company. The International Working Group was supported by the World Bank and Wellcome Trust. Reviewers This report has been reviewed in draft form by the following individuals chosen for their diverse perspectives and technical expertise: David Barash, GE Foundation Beth Cameron, Nuclear Threat Initiative Ashish Jha, Harvard University Rebecca Katz, Georgetown University Richard Zeckhauser, Harvard University DECEMBER 2017 This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. The Influenza, 1890 (excerpts) By Winston Churchill, 1890 Oh how shall I its deeds recount, Or measure the untold amount Of ills that it has done? From China’s bright celestial land E’en to Arabia’s thirsty sand It journeyed with the sun. O’er miles of bleak Siberia’s plains Where Russian exiles toil in chains It moved with noiseless tread; And as it slowly glided by There followed it across the sky The spirits of the dead. The Ural peaks by it were scaled And every bar and barrier failed To turn it from its way; Slowly and surely on it came, Heralded by its awful fame, Increasing day by day. On Moscow’s fair and famous town Where fell the first Napoleon’s crown It made a direful swoop; The rich, the poor, the high, the low Alike the various symptoms know, Alike before it droop. Source: https://www.nationalchurchillmuseum.org/winston-churchill-the-influenzapoem.html CONTENTS Preface. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x Acronyms and Abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Setting the Context. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Identifying Gaps and Estimating Funding Needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Annex to Chapter 3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Preparing a Financing Proposal, a Compelling Investment Case and a Change Management Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Identifying Sources of Finance and Means of Mobilizing/Allocating Funds to Preparedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Annex to Chapter 5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Incentivizing Countries to Prioritize Allocation of Funds to Preparedness. . . . . . . . . . . . . . . . 61 Conclusion: Health Security in Dollars and Cents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 Appendix A—Guidance for Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 Appendix B—Integration/Overlap of Action on Antimicrobial Resistance and Health Emergencies Preparedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 Appendix C—Regional Loss Estimates of Infectious Disease Outbreaks and Amr. . . . . . . 78 Appendix D—Change Management and Investment Case. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 PREFACE M ultiple pandemics, numerous outbreaks, thousands of lives lost and billions of dollars of national income wiped out—all since the turn of this century, in barely 17 years—and yet the world’s investments in pandemic preparedness and response remain woefully inadequate. We know by now that the world will see another pandemic in the not-too-distant future; that random mutations occur often enough in microbes that help them survive and adapt; that new pathogens will inev- itably find a way to break through our defenses; and that there is the increased potential for intentional or accidental release of a synthesized agent. Every expert commentary and every analysis in recent years tells us that the costs of inaction are immense. And yet, as the havoc caused by the last outbreak turns into a fading memory, we become complacent and relegate the case for investing in preparedness on a back burner, only to bring it to the forefront when the next outbreak occurs. The result is that the world remains scarily vulnerable. In the wake of Ebola, a number of commissions and panels made recommendations about how the world could be better prepared to prevent, identify, contain, and respond to infectious disease outbreaks. All these reviews—including the one I chaired for the U.S. National Academy of Medicine—agreed on three key priorities: strengthening prepared- ness at a national level; improving coordination and capabilities at a regional and global level; and accelerating R&D in this arena. Over the last twelve months we have seen some important steps taken, such as the creation of the Health Emergencies Program at the World Health Organization (WHO), the launch of the Coalition for Epidemic Preparedness Innovations (CEPI), and the establishment of the World Bank’s Pandemic Emergency Financing Facility (PEF). Many countries have signed up for external evaluations of their preparedness and response systems, signaling a welcome openness and willingness to collectively identify problem areas and explore solutions. Yet this also presents a challenge. Countries that develop detailed plans to reinforce their disease surveillance, diagnostic services, infection control, emergency preparedness, etc. in the wake of these assessments will become rapidly disillusioned if there is no money available to translate these plans into reality. Any individual or government that has had direct experience of an epidemic or pandemic does not need convincing of the case for investing in pandemic preparedness. The cruel statistic of lives lost is only the first measure of impact. To that must be added the cost to the broader economy and to society as a whole. Pandemics cause enormous eco- nomic disruption and can quickly undermine communities and governance. Responding to outbreaks once they have happened is far more expensive—in lives and money—than investing in preparedness. Preface vii Yet in many countries the argument has not been won. Governments struggle to reconcile limited resources with many competing priorities. Health does not always rank as one of the top budget priorities, and within health spending, pandemic preparedness is often overlooked in favor of more immediate and visible goals. To address this challenge, an International Working Group on Financing Preparedness was created in November 2016. This Group, which I chair, comprises experts and leaders from multilateral organizations, academia, philanthropic institutions, governments and businesses. The objective of the International Working Group is to propose ways in which national governments and development partners can ensure adequate and sustainable financing for actions to strengthen pandemic preparedness and thus enable effective compliance with the International Health Regulations (IHR) as well as World Organisation for Animal Health (OIE) standards. Our primary focus is on the prevention, identification, and containment of infectious disease outbreaks, so we have concentrated on the financ- ing of critical capacities such as disease surveillance systems, laboratory networks, and emergency operations centers, as well as “One Health” initiatives designed to protect people from pathogens in the animal population. We also recognize the crucial importance of supporting health systems strengthening as a key investment in preparedness. For many countries, the starting point in assessing what needs to be financed will be the results of a Joint External Evaluation (JEE) or outcome of a Performance of Veterinary Services (PVS) pathway analysis. The recently introduced JEE process is a huge step forward. It provides a systematic and objective assessment of a country’s capabilities across core domains, plus a prioritized list of gaps to be addressed. But of course, a good diagnostic is only the first step. We want the outcomes of these evaluations to be trans- lated into adequately funded action plans that countries can implement. And it is crucial that the financing is sustained: investing in preparedness is not a one-off, but an ongoing requirement. The scope of our investigation includes domestic resource mobilization, development assistance, and private sector engagement. For many countries, financing preparedness through the domestic public sector budget is the best way to ensure sustained funding and seamless integration with the rest of the health system. Yet this requires ensuring suf- ficient priority is attached to investing in pandemic preparedness in budget allocations. In some cases, it may also require enhancing fiscal mobilization or attracting direct financing from the private sector. For many countries, especially the poorest and most fragile, there is clearly a role for international development assistance in reinforcing pandemic pre- paredness. Here, the challenge is to ensure such contributions are effectively coordinated and prioritized, and that we transition to a sustainable funding arrangement, rather than something that withers when donor priorities change. Ensuring sustained commitment to financing preparedness will be difficult, since the mark of success is that nothing happens, and there will always be multiple competing priorities. In this context, we need to harness the powerful incentives that business and the finan- cial markets can provide. We want investors and business leaders to be taking account of health risks as they decide where to invest and trade. This will reward those countries viii  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level that have translated their JEE and PVS assessments into implemented action plans, and expose those countries which have failed to act. Through developing indices that measure intrinsic risk, state of preparedness, and economic vulnerability, we can make the threat of infectious disease outbreaks much more visible and concrete. This in turn will incentivize governments and the private sector to mitigate these risks. Investing in health security through financing preparedness is a highly cost-effective way to protect lives and safeguard livelihoods and communities. Whether measured in human lives saved or economic disruption avoided, the return on investments in pandemic preparedness is extraordinarily high. Moreover, many of the capabilities and much of the infrastructure required for pandemic preparedness also support efforts to fight endemic diseases and counter the threat of antimicrobial resistance. Taken together, the recom- mendations of the International Working Group set out in this report represent a pathway towards achieving the goal of universal health security, whilst strengthening health sys- tems and helping ensure delivery of the Sustainable Development Goals. Peter Sands, Chair International Working Group on Financing Preparedness Preface ix ACKNOWLEDGEMENTS The International Working Group (IWG) deeply appreciates and would like to thank individ- uals, organizations and institutions who took the time to provide their knowledge, experi- ence and advice to the Group. Those contributions were instrumental in guiding the Group and ultimately enhanced the quality of the report. However, the IWG takes full responsibil- ity for the facts, opinions and recommendations contained in this report We are especially grateful to the sponsors of the IWG, the World Bank and the Wellcome Trust, for their technical and financial support throughout the course of the work. We are also particularly appreciative of the support of the World Bank team who comprised the secretariat of the IWG. We are also grateful to Anas El-Turabi and Philip Saynisch for their technical expertise and contributions to the report in working with the World Bank team. We would like to thank many individuals from academic institutions, private companies, multilateral agencies, non-governmental organizations and national governments who willing gave their time and insights in contributing to the report. These are too many to mention but we would particularly like to thank Ben Oppenheim, Mark Gallivan, and Nita Madhav of Metabiota, David Barash, Allan Tennenbaun, Katie Zabronsky, Allison Neale, Julie Whipple, Jennifer Esposito, Todd Spangler, Deena Buford, Renuka Gadde, Tina Flores, Hannah Oros, and Nicole London of the Private Sector Round Table, Rowan Douglas and colleagues at Willis Towers Watson, Beth Cameron at the Nuclear Threat Initiative, Rebecca Katz of Georgetown University and Ashish Jha and Richard Zeckhauser of Harvard University. We gratefully acknowledge the advice and suggestions of members of the Federation of Indian Chambers of Commerce and Industry who participated in a round-table especially organized for the IWG. We are appreciative of the support and advice from the members of the United Nations Global Health Crises Task Force who provided insightful guidance to the Group. We want to especially acknowledge and thank the peer reviewers of the report, whose comments were invaluable in sharpening arguments and clarifying expression. We thank Erika Hartingh for successfully organizing the launch event of the report, as well as Anugraha Palan for coordinating the release of the report to the public. We also thank Sheryl Silverman and Aisha Mahmood Faquir for supporting our online communication efforts. We owe a special thanks to Alexander Irwin, who gave generously of his time in writing and rewriting sections of this report. x  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level ACRONYMS AND ABBREVIATIONS AIDS Acquired Immunodeficiency Syndrome AMR Antimicrobial Resistance APSED Asia Pacific Strategy for Emerging Diseases ARC African Risk Capacity BMGF Bill & Melinda Gates Foundation BSL Biosafety Level CARICOM Caribbean Community CCRIF Caribbean Catastrophe Risk Insurance Facility CDC Centers for Disease Control and Prevention CEPI Coalition for Epidemic Preparedness Innovations CPIA Country Policy and Institutional Assessment CPF Country Partnership Framework CPR Country Performance Rating CRA Credit Rating Agency CRS Creditor Reporting Survey CSR Corporate Social Responsibility DAC Development Assistance Committee DRC Democratic Republic of Congo DRM Domestic Resource Mobilization FAO Food and Agricultural Organization of the United Nations FDIC Federal Deposit Insurance Corporation GDP Gross Domestic Product GHS Global Health Security GHSA Global Health Security Agenda GIZ Gesellschaft für Internationale Zusammenarbeit GNI Gross National Income HDI Human Development Index HIV Human Immunodeficiency Virus HSFAT Health Security Financing Assessment Tool HSS Health System Strengthening IADI International Association of Deposit Insurers IBRD International Bank of Reconstruction and Development IDA International Development Association IDC Infectious Disease Crisis IDSR Integrated Disease Surveillance and Response IHR International Health Regulations IHR-MEF International Health Regulations—Monitoring and Evaluation Framework Acronyms and Abbreviations xi IMF International Monetary Fund IPC Infection Prevention and Control IPCC Intergovernmental Panel on Climate Change IRAI IDA Resource Allocation Index IWG International Working Group on Financing Preparedness JEE Joint External Evaluation JICA Japan International Cooperation Agency LSHTM London School of Hygiene and Tropical Medicine MERS Middle East Respiratory Syndrome NAM National Academy of Medicine NAPHS National Action Plan for Health Security ODA Overseas Development Assistance OECD Organization for Economic Co-operation and Development OIE World Organization for Animal Health PAHO Pan American Health Organization PEF Pandemic Emergency Financing Facility PHE Public Health and Environment PHEIC Public Health Emergency of International Concern PPR Portfolio Performance Rating PSRT Private Sector Roundtable PVS Performance of Veterinary Services R&D Research and Development REDISSE Regional Disease Surveillance Systems Enhancement S&P Standard & Poor’s SARS Severe Acute Respiratory Syndrome SCD Systematic Country Diagnostics SDG Sustainable Development Goals SICA Central American Integration System TB Tuberculosis UHC Universal Health Coverage UK United Kingdom UNDP United Nations Development Programme UNISDR International Strategy for Disaster Reduction US United States USAID United States Agency for International Development VRAM Vulnerability, Risk Assessment and Mapping WBG World Bank Group WEF World Economic Forum WHA World Health Assembly WHO World Health Organization xii  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level EXECUTIVE SUMMARY D eadly infectious pandemics will mark what we spend against other risks to human humanity’s future, as they have shaped lives and livelihoods, such as climate change, its past. Neither individual governments war or financial crises. nor the global community can entirely prevent the emergence of infectious In countries where there is a reasonably com- threats. But we can be much better prepared. prehensive and well-functioning underlying health system, which would include a number of This report by the International Working Group low-income and many middle-income countries, on Financing Preparedness (IWG) proposes financing improved preparedness might cost ways in which national governments and less than $1 per person per year, not a huge sum development partners can finance investments compared to the scale of the risks to human in country and regional preparedness and lives and livelihoods. More advanced econo- response capacities for pandemics and other mies can and do choose to spend much more health emergencies. per person. Achieving improved preparedness in countries with fundamental gaps in health Preparedness for pandemics refers to health coverage and capacities, particularly in primary and non-health interventions, capabilities, and care, will cost more, since preparedness is built capacities at community, country, regional, and on these foundations. global levels. Their purpose is to prevent, detect, contain and respond to the spread of disease In addition to mitigating the risks to human lives and other hazards, mitigating social disruptions and livelihoods from infectious disease risks, and limiting risks to international travel and trade. investing in preparedness has important benefits for the broader health system. Many of the capa- bilities and infrastructure required for prepared- The Case for Preparedness ness are also needed to combat antimicrobial resistance and endemic infectious diseases. Pandemics cause vast human suffering and dev- astating economic costs. Experts differ in their estimates of the economic cost of pandemics and the closely related threat of drug-resistant The Goal of Preparedness: Universal infections. However, all the figures advanced Health Security are alarmingly high. Even the most conserva- tive estimates suggest that a pandemic could The concept of universal health security best destroy over 1.0 percent of global GDP, com- captures the ultimate purpose of reinforcing pre- parable to other global threats such as climate paredness. At its simplest, health security means change. Even much smaller outbreaks can cause protecting people from threats to their health. significant loss of life and immense economic Universal health security means protecting disruption. Investments improving preparedness everybody, not just because that is the equitable therefore offer an extraordinarily high potential thing to do, but because with infectious dis- return. Yet we invest relatively little in mitigating eases, true health security can only be achieved the risks of infectious disease crises relative to if everyone is protected. Executive Summary 1 Achieving universal health security is an essen- evaluation of a country’s preparedness capa- tial component of the ultimate goal of providing bilities and infrastructure across 19 domains, universal health coverage. It both depends on enabling clear identification of gaps and areas and complements broader efforts to strengthen for improvement. The World Organisation for health systems and make them more resilient, Animal Health (OIE) also has a well-established so needs to be pursued as part of an integrated equivalent evaluation mechanism, the plan, not as a separate silo. When an infec- Performance of Veterinary Services Pathway tious disease outbreak occurs, health systems (PVS), which assesses the quality of national come under enormous pressure, and other veterinary services and animal health systems. health objectives are often compromised, as Together, the JEE and the PVS provide national resources are diverted to contain the outbreak governments with the essential starting point and patients avoid seeking care. Better pre- for any initiative to improve preparedness: a paredness is key to making health systems more detailed and objective assessment of the current resilient. status against agreed benchmarks. RECOMMENDATION 2: (i) By the end of 2017, all Achieving Universal Health Security national governments should commit to par- ticipate in, and by the end of 2019, conduct a In this report, we set out 12 specific recom- Joint External Evaluation (JEE) to assess their mendations to ensure adequate and sustained capacity to comply with the requirements of the financing of preparedness. The recommen- International Health Regulations 2005 (IHR) to dations are integrated and interdependent. prevent, detect, and rapidly respond to public Together they constitute a unified framework. To health threats; (ii) By the end of 2017, all national be effective in achieving universal health secu- governments should commit to participate in, rity, we need to pursue them all. and by the end of 2019, conduct an evaluation of Performance of Veterinary Services (PVS) to RECOMMENDATION 1: National governments and assess their capacity to comply with the World development partners should commit to a path Organization for Animal Health (OIE) standards. towards universal health security by adopting and implementing the framework set out in this Following the JEE and PVS assessments, the report and embodied in Recommendations 2–12. next step is for countries to develop a prioritized plan to rectify gaps and remedy weaknesses. To support countries in this effort, WHO has devel- Identifying Gaps and Developing a oped Guidelines for Development of a National Action Plan for Health Security (NAPHS). The Plan Guidelines outline steps for situation analysis, strategic planning and prioritization, costing, The first step for countries seeking to strengthen budget allocation and implementation of the their preparedness is to make an accurate NAPHS. As of the end of April 2017, three assessment of their current state of prepared- countries—Tanzania, Pakistan and Eritrea—had ness and thus to identify gaps and resource completed the crucial costing phase of their needs. The Joint External Evaluation mechanism preparedness plans. (JEE), launched in 2016 by the World Health Organization (WHO), provides an effective For many countries, particularly smaller or island mechanism for conducting such an assessment. nations, the plan may involve extensive regional Through a combination of peer review and cooperation. Infectious diseases do not respect self-assessment, the JEE delivers a systematic national boundaries. Cooperation and the 2  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level sharing of specialist facilities can deliver better governments should prepare a detailed financ- preparedness and be more cost effective. ing proposal to support implementation of the plan to improve preparedness. RECOMMENDATION 3: Within nine months of completion of JEE and PVS, national govern- A prioritized and costed plan, plus a detailed ments should develop and publish a prioritized financing proposal are essential prerequisites and costed plan to implement recommendations for effective action to improve preparedness. emerging from the JEE and PVS assessments, Yet experience suggests these alone are including regional elements where relevant. not enough. To catalyze the commitment of resources to deliver the plan, its proponents in each country need broad political and social Devising a Financing Proposal, support. To win such support requires a com- pelling investment case that articulates the Building a Compelling Investment political and economic arguments for reinforcing Case and Creating a Change preparedness in the context of each individual country. Furthermore, ensuring effective delivery Management Strategy of the plan requires an integrated change man- agement strategy that engages and coordinates Once a country has developed a costed and pri- relevant stakeholders. oritized plan, the next steps are to work out how to finance this plan and then how to implement RECOMMENDATION 5: Each national government it effectively. This requires: first, a robust and should develop an investment case, articulat- realistic financing proposal to ensure inclusion in ing the political and economic arguments for domestic budgets and where relevant, to attract integrating the costed plan into national budget donor support; second, a compelling investment cycles and committing resources to reinforce case, that ensures sustained economic and and sustain preparedness, plus a change man- political support for improving preparedness; agement strategy to engage and coordinate and finally, a change management strategy that relevant stakeholders. ensures the committed engagement of relevant stakeholders. Reinforcing preparedness is not a quick fix: it is a complex multi-stakeholder Identifying and Mobilizing process that stretches well beyond the minis- try of health and can often entail far-reaching Sustainable Financing for changes in established attitudes, practices, and Preparedness institutions. Rigorous planning, a compelling investment To support national governments in translating case and convincing implementation strategy costed and prioritized plans into detailed financ- are indispensable, but will achieve little unless ing proposals the World Bank is developing adequate funds can actually be identified the Health Security Financing Assessment Tool and deployed. In many countries, this will be (HSFAT), which is designed to complement the achieved through giving greater priority to fund- JEE and PVS assessment mechanism. ing preparedness within existing budgets. But in other countries, it may be necessary to explore RECOMMENDATION 4: Depending on the national ways to increase fiscal space. budget cycle, but ideally within three months of developing a prioritized and costed plan For most countries, the optimal source of finance following JEE and PVS assessments, national for preparedness is the domestic budget, which Executive Summary 3 is the best way to ensure sustainable financ- assistance for reinforcing preparedness, such ing of a public good like preparedness and to as the G7 commitment to support 76 countries facilitate seamless integration with broader or the World Bank’s to support at least 25, and it efforts to strengthen the health system and is important that such commitments are fulfilled. extend coverage. However, in many low-income Given the scale of the risks to mankind as a countries, the challenge will be inadequate whole and the global economy, there is a strong domestic resource mobilization. Weaknesses self-interest argument for richer countries to in tax design and collection mean inadequate deploy development funds for investing in uni- resources against a huge number of competing versal health security. To maximize the catalytic priorities. As preparedness rarely ranks high impact of such development assistance, devel- on the list of priorities, weak domestic resource opment partners should prioritize three catego- mobilization leads to sustained underinvestment ries of financial support: in preparedness. Financing capital investments or one-off expen- Yet there is considerable potential to increase ditures to achieve a step change in prepared- tax revenues in most developing countries. ness capacities in poorer countries. These might Through sustained focus on improving tax include laboratories or specialized training. capabilities, many low-income countries could Wherever possible, beneficiary countries should raise their tax ratios by 2–4 percent of GDP, with then take on the financing of ongoing recurrent significant potential benefits for multiple aspects expenditure. of social and economic development, including preparedness (IMF 2011). Most of this can be Financing regional initiatives. Regional labora- achieved through improving the effectiveness tory facilities and cross-border disease surveil- of the overall taxation system. However, ear- lance systems should be important components marked taxes may also have a role to play, given of many smaller countries’ plans to reinforce the fact that people are often more prepared to preparedness. Yet gaining agreement between pay taxes for health than for other government countries on how to finance such shared capac- activities. While there is considerable debate ities may impede their implementation. Here about the longer-term effectiveness of ear- development assistance can play a critical role. marked taxes, countries should consider their introduction where they might prove an effec- tive way to generate additional fiscal space for Financing the creation of baseline prepared- preparedness. ness and prevention capacities in fragile and conflict-affected states, where domestic resourc- RECOMMENDATION 6: To increase fiscal space, ing is an unrealistic aspiration and there are national governments should examine ways of significant gaps in the underlying health system. generating incremental domestic resources to finance preparedness, whether by (i) improving In all cases, development should seek to overall tax design and collection; or (ii) introduc- support the financing of preparedness through ing earmarked taxes where they might be an the national health security plans and budgets effective way to generate additional resources. emanating from the JEE process, and use the JEE criteria as benchmarks of achievement. For some lower income countries, development Wherever possible development partners should assistance will play an important role in financing seek to secure commitments from recipient gov- better preparedness. Many advanced econo- ernments around matching and ongoing funding mies have made significant collective and indi- so as to maximize the impact of the develop- vidual commitments to providing development ment assistance. 4  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level RECOMMENDATION 7: Development partners should introduce regulations to require appropri- should fulfill and build on existing collective and ate investment in risk mitigation and prepared- bilateral commitments to help finance prepared- ness. Governments may also want to consider ness in countries needing support, focusing on: encouraging or even mandating corporate social (i) in-country capital investments and one-off responsibility (CSR) spending on preparedness. spends; (ii) multi-country regional initiatives; and (iii) failed and fragile states where domestic RECOMMENDATION 8: National governments resourcing is not a realistic option. To maximize should incorporate the private sector into their the catalytic impact of their assistance, develop- strategy for reinforcing preparedness, through ment partners should structure their support to a combination of awareness-building, direct the health security plans emanating from the JEE involvement in preparedness and response process and encourage national governments planning, and regulation. Where private sector to match investments and commit to ongoing companies contribute directly or indirectly to financing from domestic resources. the risks of disease outbreak and spread by the nature of their business, national govern- ments should introduce regulations requiring Engaging the Private Sector such companies to invest in risk mitigation and in Reinforcing and Financing preparedness. Preparedness Leveraging Insurance to Finance Private-sector companies have much to lose from disease outbreaks, but are often only mar- Response and Incentivize ginally involved in the implementation of initia- Preparedness tives to reinforce preparedness and response and typically make little direct financial contribu- As has been demonstrated in the earthquake tion to preparedness. This must change. and drought contexts, insurance can play an important role in ensuring rapid disbursement There are a variety of possible ways to engage of funds to finance disaster response, and in the private sector more effectively, though none creating incentives for investing in risk mitigation is a “silver bullet.” First, it is important to build and preparedness. much greater awareness of the risks of infec- tious disease outbreaks amongst private sector To pioneer the deployment of insurance mech- leaders. In addition to stimulating companies anisms in the infectious disease arena, the to improve their own internal preparedness, World Bank, and other partners developed such awareness-building should make business the Pandemic Emergency Financing Facility leaders less resistant to taxes or regulations (PEF), a parametric insurance vehicle designed related to reinforcing pandemic prevention to provide rapid disbursement of emergency and response and more inclined to work with finance. The PEF covers a range of diseases governments to mitigate the risks. Second, and is focused on countries that are part of the governments should seek to involve the private International Development Association (IDA), sector in plans to reinforce preparedness and with the premiums funded by donor nations. response, leveraging relevant private sector Through this initiative, the World Bank and assets and capabilities. Third, where private its partners have worked through numerous sector companies contribute to the risks of infec- challenges and technical issues associated with tious diseases as a result of their business activ- utilizing innovative insurance mechanisms for ities, such as livestock production, governments pandemic response. There is an opportunity to Executive Summary 5 build on this experience to develop a “PEF 2.0”, Yet this alone is not enough. The most powerful and to encourage the development of insurance way to reinforce the investment case and create products for the private sector. While rapid dis- more direct incentives for investment in pre- bursement of funds in response is a real benefit, paredness is to ensure that the risks attaching the greater prize from introducing insurance to infectious disease outbreaks are reflected in mechanisms for both governments and the pri- financial markets and businesses’ investment vate sector are the incentives insurance creates decisions. Another complementary approach for investment in preparedness. This will require would be to use measures of preparedness to the development of much broader markets, influence the flows of development assistance, which will inevitably take time. such as concessional financing from the World Bank. RECOMMENDATION 9: The Insurance Development Forum, the World Bank, and other If a country’s economic vulnerability to infectious partners should work together to: (i) develop disease outbreaks was incorporated in main- the next iteration of the Pandemic Emergency stream macroeconomic analyses, bond ratings Financing Facility (PEF 2.0) that specifically ties and investment criteria, investment in pandemic recipient countries’ investments in prepared- preparedness would no longer be solely the ness to relief of their contributions to PEF 2.0 concern of the Health Minister. Encouraging the premiums; (ii) deliver maximum participation development of metrics around intrinsic risk, from the insurance markets to provide capacity state of preparedness and sectoral vulnerabil- for PEF 2.0; and (iii) investigate how insurance ity would change the way such decisions are for business interruption resulting from disease made. This could be achieved through official outbreaks can be provided to private sector initiatives, academic efforts or private endeav- companies in target countries. ors, or through creative partnerships (perhaps along the lines of UNDP’s partnership with S&P to include the Human Development Index Incentivizing Countries to Invest in (HDI) in devising sovereign ratings). Inclusion of infectious disease risks in the IMF’s Article IV Preparedness consultations, in situations where such risks are considered macro-critical, would have a power- We will only achieve a substantial reduction in ful signaling effect. the risks to human lives and livelihoods across the globe from infectious disease outbreaks RECOMMENDATION 10: To reinforce incentives for if individual countries commit to investing in national governments to invest in preparedness, national preparedness. For this to happen, gov- the IMF and World Bank should work to facilitate ernments need to be convinced that investing the incorporation of the economic risks of infec- in public health systems is absolutely necessary tious disease outbreaks into macroeconomic despite the multitude of competing demands and market assessments, including: (i) inclusion for scarce budget resources. The current into Article IV assessments where such risks are under-preparedness of many countries indicates macro-critical; (ii) encouraging the development that this case has not been convincingly made. of academic and private sector indices and maps of intrinsic risk, preparedness and eco- One approach is to ensure that plans and nomic vulnerability. financing proposals for improving prepared- ness are underpinned by a more compellingly Countries are also likely to pay more attention to articulated investment case. That is the logic of investing in preparedness if doing so increases Recommendation 5. access to concessional international finance. 6  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level Tackling Pandemic Preparedness—Roles and Responsibilities All countries should: International development partners should: Commit to strengthen universal health Commit to strengthen universal health security security Assess their IHR core capacities and Commit support to finance preparedness performance of veterinary services by activities and catalyze domestic resource conducting JEE and PVS by end 2019 mobilization Develop a prioritized and costed plan Leverage insurance models to support within 9 months of completion of gap response and recovery, including the PEF2.0 assessment Facilitate incorporation of economic risk Prepare a financing proposal within 3 for infectious disease outbreaks into months of completing a prioritized and macroeconomic and market assessments costed plan Engage and coordinate relevant stakeholders and develop a country- specific investment case World Bank should: Examine ways of generating resources Include preparedness indicators in the CPIA for preparedness from taxes tool & IDA loan allocations Regulate private sector investment in Include preparedness indicators in the preparedness country-specific systemic country diagnostics One way of achieving this is by introducing an In 2013, the World Bank adopted a new strat- assessment of preparedness as a criterion in egy focused on aligning the institutions work the Country Policy and Institutional Assessment with the twin goals of ending extreme poverty (CPIA) tool that the World Bank uses to deter- and boosting shared prosperity in a sustained mine the country allocation of IDA resources. manner. The World Bank introduced a diag- nostic exercise, called the Systematic Country Introducing an assessment of pandemic pre- Diagnostics (SCD), to identify key challenges paredness would have two benefits. First, the and opportunities for a country to accelerate fact that countries are being assessed on pan- progress towards development objectives demic preparedness will raise its visibility, profile consistent with the twin goals. This diagnostic and importance. Second, countries that do well is a reference point for World Bank Group client on this assessment will be able to increase their consultations with countries. Incorporating an allocations of concessional finance through IDA. assessment of a country’s pandemic prepared- ness in the Bank’s SCD will emphasize the RECOMMENDATION 11: The World Bank should importance of preparedness and give the issue include assessment of pandemic preparedness greater visibility in the eyes of policy makers. capacity in the Country Policy and Institutional Further, it will help countries make a strong case Assessment (CPIA) tool and include the rating in for concessional Bank finance in support of the overall country score used as part of the IDA investments in pandemic preparedness. allocation formula. Other multilateral develop- ment banks should consider introducing equiv- RECOMMENDATION 12: The World Bank should alent mechanisms to incentivize investment in incorporate analysis of pandemic prepared- preparedness. ness in country-specific Systematic Country Executive Summary 7 Diagnostics that identify a set of priorities Strengthening preparedness at a national level through which a country may most effectively reinforces our first line of defense against the and sustainably achieve the poverty reduction threat of pandemics. It is not the whole answer: and shared prosperity goals. we also need to strengthen capabilities and coordination at a global level; and we must For far too long, our approach to pandemics accelerate research and development to give has been one of panic and neglect: throwing us more scientific weapons to fight infectious money and resources at the problem when a pathogens. Yet unless we can prevent, detect, serious outbreak occurs; then neglecting to fund contain and respond at a local level we will preparedness when the news headlines move always be on the back foot. on. The result has been too many lives lost, too much damage to human livelihoods. As recent Building and maintaining preparedness requires news of a new Ebola outbreak demonstrates sustained financing. The absolute sums are not (May 2017), the threat of deadly pathogens is large relative to the scale of the risk, but thus far ever present. New outbreaks will occur, but by many governments and development partners investing in prevention, detection, containment have failed to give preparedness the priority it and response we can reduce their frequency merits. We must demonstrate the power of the and impact. Investing in global health security investment case. We must secure commitments is an imperative. Otherwise we will all too often to sustained financing and monitor that these see poorer, more vulnerable countries suffering are delivered. Only then can we be confident terrible loss of life and being knocked off their that we have made the world a safer place, that trajectory of social and economic development. we are on the path towards achieving universal And we put the world as a whole at risk of some health security. highly contagious deadly influenza or other virus that could kill millions and wipe trillions from the global economy. 8  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level 1 INTRODUCTION The Preparedness Problem In the wake of the Ebola crisis that began in global health crisis, whether it is a resurgence West Africa in 2013, a series of reports have of Ebola, SARS, or bird flu, a swiftly moving recommended strengthening and scaling up threat like Zika, or some entirely new disease. investments in global health security as an Stressing the need for all countries to meet urgent priority. Expert assessments by the the full obligations of the International Health Harvard-London School of Hygiene and Tropical Regulations 2005 (IHR), the UN High Level Panel Medicine (LSHTM) Independent Panel on the noted that building a global health architecture Global Response to Ebola (November 2015), that is better prepared to respond to health the U.S. National Academy of Medicine’s (NAM) crises will require additional financial resources, Commission on Creating a Global Health Risk and stresses the need to mobilize domestic and Framework for the Future (January 2016), international funding, especially for low-income and the UN High Level Panel on the Global countries, to support the implementation of the Response to Health Crises (February 2016) IHR’s Core Capacity requirements. urge far-reaching improvements in nations’ public health capabilities and infrastructure, in international leadership for preparedness and The International Working Group response, and in research and development related to infectious diseases. In response to these calls for increased invest- ment in preparedness, the International Working Emphasizing the urgent need to invest in pre- Group on Financing Preparedness (IWG) was paredness, the Harvard-LSHTM Panel called established at the World Bank in November upon the global community and countries to 2016. Comprising 17 experts and leaders from agree on a clear strategy to ensure that gov- multilateral organizations, academia, philan- ernments invest domestically in building core thropic institutions, government, and businesses, public health and system capacities, and to the IWG proposes ways in which national gov- mobilize adequate external support to supple- ernments and development partners can effec- ment these efforts, especially in poorer coun- tively and sustainably finance investments to tries. Highlighting infectious diseases as one of strengthen country and regional preparedness the biggest risks facing humankind, the NAM and response capacities for health emergencies. Commission on Creating a Global Health Risk These capacities include disease surveillance, Framework for the Future argued that reinforc- diagnostic laboratories, field epidemiology, ing public health capabilities should be a top infection control, and emergency planning. They priority and estimates that $4.5 billion must be are set out in the IHR, the 11 action packages spent annually to prepare the world for the next of the Global Health Security Agenda (GHSA), Introduction 9 the 19 action areas of WHO’s Joint External compilation of recommendations phase, which Evaluation (JEE), and the performance of veteri- marked the culmination of the first two phases nary services as measured by the 4 areas of OIE and during which members considered the vari- PVS. ous emerging options and settled upon the rec- ommendations contained in this report. The IWG The IWG has focused on developing the busi- held two face-to-face full membership meetings ness case for increasing investment in prepared- and a series of theme-specific discussions ness and response; identifying approaches to over its six-month tenure. Members used these prioritize investments in country-level prepared- meetings to share ideas, examine evidence, test ness within existing national budgets; suggest- hypotheses and form recommendations. ing options for incremental domestic resource mobilization for funding preparedness and The recommendations of the IWG are response from both the public and private sec- expected to inform the implementation of the tors; and identifying how development financing financing-related recommendations of the for health can be used to catalyze and support various panels, provide input to the Global domestic investments in preparedness in coun- Health Crises Task Force (established by the UN tries requiring assistance. Our report sets out Secretary-General to monitor implementation of an overall timetable for financing this agenda recommendations of the UN High Level Panel), against which countries and the international and contribute to the development of a financ- community can hold themselves accountable. ing framework to assist in the implementation following an external evaluation. Because the IWG is primarily concerned with the challenges of financing preparedness at the country level, many topics lie outside our scope. Review Process Our analysis does not address funding for global capabilities and coordination, such as the WHO This report has been reviewed in draft form by itself. Nor do we discuss the financing of accel- individuals identified for their expertise, expe- erated research and development for either rience and perspectives. Comments and sug- infectious diseases or antimicrobial resistance. gestions from the peer reviewers were received These latter issues are being addressed through in writing and in discussions, and have been initiatives such as the Coalition for Emergency addressed in the final report. The report has not Preparedness Innovations (CEPI). been modified or amended in any substantive manner (other than minor editorial corrections) after the completion of the review process. How We Worked The IWG’s work was spread over three phases: Overview of the Report a preparatory phase, during which we estab- lished what data existed, took stock of work The remainder of this report is organized as done already, and identified selected indi- follows. Chapter 2 summarizes the case for viduals and organizations for further cooper- investing in pandemic preparedness. Chapter ation; an analytical phase, during which we 3 looks at how countries can identify the gaps conducted data analysis, established patterns in their pandemic defenses, assess resource and relationships in the data and addressed needs, and develop an action plan. Chapter 4 the group’s mandate through the synthe- discusses the importance of preparing a robust sis of numerical and narrative data; and a financing proposal, compelling investment 10  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level case and an overarching change management incentivize countries to give greater importance strategy. Chapter 5 focuses on ways in which to financing preparedness. The report concludes countries can mobilize additional resources in Chapter 7, which also contains a list of actions for preparedness, both domestically as well that countries and development partners must as through external assistance. Chapter 6 take to sustainably finance preparedness. examines measures which can potentially Introduction 11 2 SETTING THE CONTEXT The Case for Investing in Pandemic Preparedness The health, economic and social impacts of The recent Zika outbreak in the Americas disease outbreaks are substantial (Exhibit 2.1). infected over a million people. It is associated Measured in terms of human suffering or eco- with 2,971 confirmed cases of microcephaly, nomic disruption, pandemics exact huge costs. a congenital syndrome in which children of The human tragedy of rapidly spreading infec- infected mothers are born with small heads and tions has scarred the new century repeatedly. brain damage (PAHO 2017). Between December EXHIBIT 2.1  The Burden of Large Epidemics Health impact • Sickness • Deaths • People left with long-term sequelae Economic impact • Productivity loss from death or disability • In most severe of a ected population outbreaks (cont’d) • Productivity loss of caregivers ― Absenteeism and • In most severe outbreaks closure of schools ― Loss from travel/transport bans (e.g. • Cost of response & tourism, business travel, exports) recovery ― Loss of consumer confidence and spend Social impact • Disruption of social fabric • Equity/access ― Children/dependents left without ― Women & children caregivers, disruption of households disproportionately a ected ― Need for more caregivers due to ― Poorest population disability disproportionately ― Social stigma a ected Setting the Context 13 2013 and April 2016, the largest epidemic of A Threat to Economies Ebola virus disease to date generated more than 28,616 cases and 11,310 deaths in Guinea, The high death count and social disruption are Liberia, and Sierra Leone (CDC 2016). The 2009 not the only costs associated with pandem- H1N1 influenza resulted in over 18,000 deaths ics; the financial and economic damages are (WHO 2010). MERS has taken 690 lives so far also devastating. Ebola wiped out many of the (WHO 2017). Early in the new millennium, SARS recent development gains in Guinea, Liberia, killed 774 among the 8,098 people infected and Sierra Leone, which had been among the (WHO 2003). fastest growing economies in the world prior to the crisis. The disease slashed investment In infectious disease outbreaks, it’s the health and caused a substantial loss in private-sector sector that often gets hit the hardest as the growth; unleashed threats to food security sick people who come to the healthcare sector through declining agricultural production; and infect healthcare workers. The recent Ebola burdened cross-border trade with restrictions outbreak claimed the lives of 518 medical staff on movement, goods, and services. The World out of a total of 898 infected (The Economist Bank estimates that as a result the three coun- 2016). Sierra Leone lost 221 healthcare workers, tries lost $2.2 billion in GDP in 2015 alone (World followed by Liberia (192) and Guinea (100). The Bank 2015). effect is doubly pronounced when the health sector itself is weak. Sierra Leone, for example, Several other estimates of the projected eco- spends under $300 per person per year on nomic impact of infectious disease crises health at purchasing power parity, one-tenth of bolster the case for global action on prepared- most countries in Europe. Guinea has 10 doc- ness. A National Academy of Medicine report tors per 100,000 people, one-twentieth of most from 2016 uses estimated probabilities of a countries in Europe. One of the key failures mild, moderate, and severe pandemic, and during the Ebola outbreak was that people did their expected economic costs, to produce an not want to seek formal care because the sys- annualized loss estimate of $60 billion. Fan, tem itself was bad—so they stayed at home and Jamison and Summers (2015) offer a somewhat got others in their family sick. By the time they higher estimate of expected annual income loss went to a doctor they were already very ill, and ($80 billion). Incorporating the expected costs did not survive long. Restoring confidence in associated with mortality, which are not included the health system, therefore, needs investments in the National Academy of Medicine estimates, to strengthen capacity to care for sick people the expected annual loses rise six-fold to $490 during outbreaks. billion. Investments in pandemic preparedness have While experts have differed in their precise huge co-benefits for the healthcare sector. estimates of the cost of pandemics, all the Investments in surveillance and diagnostic figures are alarmingly high. Even the most capacities, for instance, can be used for routine conservative estimates (0.1 to 1.0 percent of care of patients. This synergistic relationship global GDP) suggest pandemic risks are on par between investing in pandemic preparedness with other high-profile economic threats that and investing in health systems reinforces the concern business leaders and policy makers, argument for committing resources to strength- such as climate change (0.2 to 2.0 percent of ening public health capabilities, which otherwise global GDP, according to IPCC 2014) and natural tend to get overlooked in favor of investments disasters (0.3 to 0.5 percent of global GDP and that yield a more immediate and visible return. 65,000 deaths per year, according to UNISDR 14  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level 2015). Precisely because they are so high, the of global income (Fan et al 2015). The cost of a estimated economic losses from infectious severe pandemic like the 1918 influenza pan- threats underline the significant potential return demic could total as much as 5 percent of global on investment that will come from improving GDP (World Bank 2015). preparedness. Increasing Frequency of Disease Outbreaks A Spiral of Fear For many reasons, the frequency and diversity The economic impact of disease outbreaks of disease outbreaks have increased steadily is exacerbated by fear, which makes people since 1980. First, recent advances in travel, trade modify their behavior to reduce their chance and connectivity have led to rapid increases in of exposure. The 2015 South Korean MERS speed and volume not only of humans, animals outbreak that saw more than 16,000 people and commodities, but also of deadly patho- quarantined and claimed 38 lives is a case in gens. Second, there has been unprecedented point. It caused widespread panic and resulted increase in unplanned urbanization, because of in a substantial change in consumer behavior, which millions of people live in crowded spaces with people avoiding restaurants and shopping and unhygienic conditions, which can be perfect centers and instead meeting their purchasing breeding grounds for diseases to spread. Third, needs through online shopping. The entertain- civil unrest and war displace large volumes of ment and leisure sectors were the worst hit. people, who move to new places, carrying with According to data from the Korean Film Council, them a variety of infectious disease organisms. cinema visits dropped by 52 percent year on And fourth, global warming is creating new year in the first two weeks of June. Tourist arriv- belts of warm and moist environments, which als fell by 41 percent as many visitors cancelled are ideal conditions for the spread of disease their plans to visit South Korea. In June 2015, vectors. the consumer sentiment index compiled by the Bank of Korea fell below the neutral 100 mark, Between 1980 and 2013, 12,012 outbreaks of 215 signifying a deteriorating outlook, for the first human infectious diseases have been recorded, time since 2012. Fears that the MERS outbreak comprising more than 44 million cases occur- would have a dramatically negative impact on ring in 219 nations. In an analysis of this dataset, private consumption led the Bank of Korea to Smith et al (2014) finds that after controlling for cut its benchmark policy rate by 25 basis points disease surveillance, communications, geogra- in June (Economic Intelligence Unit 2015). phy and host availability, it is found that the total number and richness (i.e., number of unique Likewise, China, though it was slow to respond causal diseases) of outbreaks increased signifi- at the early stages of the outbreak, did every- cantly since 1980 (p < 0.0001). thing it could in 2003 to minimize human-to- human contact as it tried to check the spread Exhibit 2.2 plots these outbreaks. Panel of SARS. Despite these efforts, the World Bank (a) depicts the rising trend in total outbreaks estimates that China’s GDP contracted by 0.5 and richness of causal diseases over time. Panel percent in 2003 (World Bank 2008), while global (b) presents the same information, but according GDP fell by $40 billion (Lee and McKibbin 2004). to host type. Panel (c) shows the pathogen tax- Recent economic work suggests that the annual onomy, while panel (d) graphs the transmission global cost of moderately severe to severe modes. pandemics is roughly $570 billion, or 0.7 percent Setting the Context 15 EXHIBIT 2.2  Infectious Disease Outbreaks, 1980–2010 (a) (b) 3000 3000 disease richness no. outbreaks 2000 2000 175 human specific 150 zoonoses 1000 1000 125 0 100 0 1980 1990 2000 2010 1980 1990 2000 2010 (c) (d) 3000 3000 fungi no. outbreaks 2000 parasites 2000 protozoans vectorborne viruses non-vectorborne 1000 1000 bacteria 0 0 1980 1990 2000 2010 1980 1990 2000 2010 year year Source: Smith et al 2014 Deadly and Unpredictable: The Example range.1 These pandemics represented 3 differ- of Influenza ent antigenic subtypes of influenza A virus (H1N1, H2N2, and H3N2 respectively), and differed The unpredictability of the occurrence of from each other with respect to etiologic agents, pandemics makes the case for investing in epidemiology, and disease severity.2 preparedness even more compelling. Influenza pandemics, which kill many people, show no The 2009 H1N1 influenza pandemic, the first predictable periodicity or pattern—beyond of the 21st century, showed how a new virus that they seem to occur roughly every 3 or 4 could spread very quickly to every corner of decades (Exhibit 2.3). There is a high probability the globe in an era where the concentrations that the world will experience a severe outbreak of human populations and their constant global in the next 10 to 30 years that could destabilize societies and economies; but it’s anyone’s guess 1 Not classified as “true” pandemics are 3 notable epidemics: the when and where it might emerge. 1947 H1N1 pseudo-pandemic in Japan and Korea, which recorded low death rates; the 1976 H1N1 epidemic of swine influenza in New Jersey, USA, which caused serially transmitted disease, pneumonia, and death Fifty million people are believed to have died at a military installation, but disappeared within a few weeks; and the in the 1918 influenza pandemic, which infected 1977 H1N1 Russian flu, which was almost entirely restricted to persons under 25 years of age. a third of the world’s population. This was in an 2 Not much is known about the antecedents of the virus of 1918 flu, age before intercontinental air travel and global- but in the case of 1957 and 1968 pandemics, both of which occurred in the era of modern virology, the hemagglutinin antigen of the causative ization, and at a time when the world’s popula- viruses showed major changes from the corresponding antigens of tion was under 2 billion. Two other worldwide immediately antecedent strains. This renders prediction difficult, espe- cially since “with 16 known forms of influenza hemagglutinin (the “H” in influenza outbreaks occurred in the last century, the strain name), 9 known varieties of neuraminidase enzyme (the “N” in the name), and different subtypes within each type, the potential for in 1957 (H2N2 Asian flu) and 1968 (H3N2 Hong new enzymatic combinations—and recombinations—is great.” Harmon Kong flu), with death tolls in the 1–3 million K. 2011 16  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level EXHIBIT 2.3  Influenza—Moderate and Severe Influenza Pandemics Regularly Hit the Population Major flu outbreaks in the last century 1918–19 1957–58 1968–69 2009 Spanish flu H2N2 Asian flu H3N2 Hong Kong flu H1N1 “Swine Flu” • Global • Global • Global • Global • ~50 million deaths, • >1 million deaths • 1–2 million deaths • >18,000 deaths one third of the global population infected movements prevent the local extinction of the Yet, pandemics have not caught the imagina- virus population.3 The first cases of the novel tion of world leaders in quite the same way as swine-derived H1N1 influenza A virus were climate change and nuclear wars. Pandemics detected in Mexico and the United States in late attract a lot of attention when they are at their April 2009, and by the end of the year the virus height; but once the worst is over, the sense had spread to 208 countries, resulting in hun- of urgency disappears, both at the global and dreds of thousands of cases and at least 18,000 country level, and we start all over again.4 At deaths. the opening session of the Skoll World Forum in Oxford, U.K., World Bank Group President Jim If a pandemic virus equivalent in pathogenicity Kim said that “what happens every time” in the to the virus of 1918 were to return in the highly face of pandemics is a cycle of “panic, neglect, inter-connected, globalized, and urbanized panic, neglect” (Devex 2015). 21st century world, it would likely kill more than 100 million people, even with today’s vastly advanced antiviral and antibacterial drugs, vac- The Challenge of Financing cines, and prevention knowledge (Taubenberger and Morens 2006). Preparedness The huge social, health, and economic devasta- Speaking at a conference on international secu- tion wrought by Zika and Ebola has put the chal- rity policy in Munich in 2017, Bill Gates ranked lenge of strengthening outbreak preparedness pandemics (including the growing potential for and responsiveness of countries on the agenda intentional or accidental release of a synthetic or at the highest political level. But this is not the modified agent) alongside climate change and first time that the world’s attention has been nuclear war as the three biggest threats facing the world (Munich Security Conference 2017). 4 The story of Zika carries a potentially threatening message. As the world scrambled to find ways to counter transmission and under- stand the virus’ impact of fetal brain development, it is difficult to avoid 3 This is also why today’s pandemic risk prediction models have the thought that earlier recognition of the surge in microcephaly cases begun to introduce the concept of “effective distance” rather than and the link to Zika infection would have been immensely valuable. actual distance to understand how infections are likely to spread. See When countering infectious disease outbreaks, days and weeks mat- Brockmann D1, Helbing D. 2013. ter, and preparation is everything. Setting the Context 17 drawn to the need to be better prepared; earlier WHO has also updated its global influenza viral outbreaks such as SARs and H1N1 had also preparedness plan, which outlines components led to similar calls. And yet, countries chronically that countries should include in their national underinvest in preparedness planning, disease preparedness plans with a focus on core public and risk monitoring, and primary care. Health health components, including surveillance, sector development strategies commonly lack reporting, communication, and case man- focus, and public finance management lacks agement. Subsequent guidance expanded means to target resources. Complex political preparedness to include other sectors, such economies undermine strategic priority setting, as education and interior, in a “one country” and development assistance largely remains tar- approach (WHO 2007). geted to specific diseases. External assistance prompts governments to shift budgets away More recently, about 55 countries promoted from health, and the financing of health often GHSA. This agenda covers 11 technical targets, falls short of any internationally agreed target, including activities related to the prevention such as the Abuja pledge of allocating at least 15 of outbreaks, promotion of key practices, and percent of annual budgets to improve the health actions to improve countries’ response capacity. sector (WHO 2011). Recent years have also seen a resurgence in the concept of health systems strengthening, with a particular emphasis on increasing systems’ What Does It Take to Be Prepared? “resilience” (Kruk et al 2015). The prescription for health systems resilience emphasizes the Long before the recent Zika and Ebola out- spectrum of essential inputs, including: health breaks, global initiatives had established a workers, infrastructure, supply chains, health comprehensive set of guidelines, tools, and information, surveillance, infection prevention technical assistance to help countries improve and control, and community mobilization. their preparedness and response capacity. The IHR, promulgated in 1969 under the auspices of the World Health Organization (WHO), were Why Is This So Hard? broadened in 2005 to guide countries in detect- ing, assessing, reporting, and responding to all With growing international attention focused events that could potentially constitute public on the problem, why have many countries still health emergencies of international concern struggled to achieve preparedness against (PHEIC). infectious threats? Part of the answer is obvious. The requirements for preparedness are com- All WHO member states are required to have or plicated (Exhibit 2.4). At a minimum, countries to develop minimum core public health capac- need a solid legal and regulatory foundation, ities to implement the IHR effectively (WHO adequately trained and equipped public health 2016). Progress in building the needed capac- workforce, strong surveillance and response ities has been slow, however, and in 2014 only framework, functional national public health lab- one-third of the countries in the world reported oratories, and robust multi-sectoral coordination. having the ability to assess, detect and respond Many of these components lie in different parts to public health emergencies (CDC 2016). of government and are often financed through Countries in Africa scored the lowest across a variety of different mechanisms, ranging from most preparedness indicators, and only about emergency allocations, routine sectoral provi- two-thirds reported developing multi-hazard sions and ad-hoc apportionments. Faced with national public health emergency preparedness this complexity, it is not surprising that many and response plans. countries have struggled even to draft a national 18  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level EXHIBIT 2.4  Key Challenges for Financing of and respond to the spread of disease and other Preparedness Activities at the National Level hazards, mitigating social disruptions and limit- ing risks to international travel and trade. Competing needs for resources within the health sector, which result in higher priority Three aspects of investing in pandemic pre- for curative care at the expense of paredness deserve special mention. First, investments in strengthening public health preparedness is part of a broader approach capabilities to disaster risk management. Resources put High uncertainty of direct reward from into preparedness are investments in critical investments in preparedness—not easy to risk management for countries, regions, and ‘sell’ an investment which, if successful, results in something avoided the global community as a whole. Second, preparedness is a core component of health Competing investment projects in other systems strengthening, both depending on and sectors with higher/more immediate perceived return, in the context of contributing to other parts of the health system. constrained resources This means the costs of achieving preparedness depend on what other systems components exist Multi-sectoral, cross-department and multi-level (global, regional, national and and how well they work. This is also why pre- sub-national) coordination and e orts paredness measures cannot be undertaken for a needed for e ective implementation single pathogen: “preparedness” reflects the per- formance of the full system. Third, pandemic pre- paredness is inherently multi-sectoral, requiring plan of action with specific activities, timelines, cooperation across different arms of government and budgets. Rational and increased financing and with the private sector. While experts have will require establishing a common vocabulary, acknowledged these points, the persistence of together with a common framework for defining narrow and fragmented approaches to financing priorities and core investments for prepared- preparedness has constrained efforts to build ness. This is also important to avoid a “flavor more resilient health systems.5 of the month” approach whereby financing partners use the word preparedness to justify Clarifying these concepts matters, because whatever investment they would like to make. smart, timely, well-directed investments in preparedness can make a life-or-death differ- Preparedness and Systems Performance ence for people. The ability of the health system to mount an effective response to Ebola virus The challenge of financing preparedness is outbreaks in Nigeria, Democratic Republic of not limited to ensuring a sufficient level of Congo, and Uganda highlight the importance resources. In many instances, there has been of critical components of preparedness and insufficient consideration of the way different response even in the context of overall weak- system sub-components need to be combined ness. The experience of Vietnam illustrates what to achieve satisfactory performance in the con- can be achieved when ambition goes beyond text of uncertainty and emergencies. strengthening just a few components. Vietnam has implemented a comprehensive One Health To grasp this more clearly, it is helpful to recall program drawing together the financing of agri- what we mean by “preparedness.” Preparedness cultural, public health, health care, and public for pandemics refers to a range of health and education programs. non-health interventions, capabilities, and capacities at community, country, regional, and 5 GHSA was largely created as a way for funders to see where the global levels. Their purpose is to prevent, detect, dollar was going and how it was making an impact. Setting the Context 19 Universal Health Coverage and to save and improve people’s lives” (World Bank Security 2007). Distinct from specific disease-control technologies, this approach to developing the health sector gained popularity in the last couple Much of modern health development policy has of decades. It offered a constructive approach been marked by recurrent tensions between to multiple problems: the shifting burden of disease-specific programs (for example, disease, growing duplication in disease-specific addressing smallpox, malaria, or HIV/AIDS) and investments, and increasing system-wide efforts to secure comprehensive improvements bottlenecks that threatened the success and in health systems. Disease-specific programs sustainability of disease-specific programs. It is can achieve remarkable gains, sometimes with important to note, however, that health system dramatic speed, but may fail to build broader strengthening is not a result in itself; rather, it capacities. Systems-building efforts may initially comprises the instruments by which the health yield scant measurable results. The tensions sector policy objectives are realized (Kutzin and among different approaches, and the concern Sparkes 2016). to swiftly remedy perceived inadequacies, have sometimes led to abrupt shifts in the These health sector policy objectives are global health vocabulary, with consequences captured in the goals of UHC, health security, for investment flows. Thus, in a matter of two and health resilience. The quest for UHC is decades, resource-constrained governments, a demand for both better health and greater policy experts, and political commentators alike equity in health. UHC is only attained when have welcomed and adopted the refrains of everybody has access to affordable, quality health system strengthening (HSS), universal health services, and no one is forced into pov- health coverage (UHC), resilient health systems, erty to pay for the health care they need (Kutzin and global health security (GHS)—perhaps not and Sparkes 2016). Health security can be always fully understanding what these terms seen as a component of UHC, since protection mean or believing them to be different ways of against health risks is a key part of health cov- saying the same thing. This can matter because erage (Anand 2011). Health system resilience is although these agendas all point in broadly the the ability of a health system to absorb shocks, same direction, the different nuances lead to dif- respond with the provision of needed services, ferent priorities and the sheer profusion of terms and sustain gains (Kruk et al 2015). can cause confusion. WHO defines UHC as access to a broad range Consider, for instance, the notion of health sys- of services, which would include the services tem strengthening, which refers to the holistic that contribute to preparedness. From this per- approach of supply-side interventions directed spective, preparedness is the output indicator, at the core functions of a health system, includ- and is a subset of UHC (Exhibit 2.5). The WHO ing financing, production, delivery, governance framework clearly delineates that health systems and management. It involves “putting together (inputs) contribute to preparedness (specific the right chain of events—financing, regulatory output) which is a subset of UHC (broad output). framework for private-public collaboration, UHC including preparedness then contributes to governance, insurance, logistics, provider pay- health security (impact). ment and incentive mechanisms, information, well-trained personnel, basic infrastructure, and Some worry that a narrow focus on UHC leads supplies—to ensure equitable access to effec- to the prioritization of investments in cura- tive health interventions and a continuum of care tive healthcare services at the expense of 20  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level EXHIBIT 2.5  Investing in Health Systems to Reach the SDGs Impact on SDG1: SDGs End poverty SDG3: SDG8: SDG4: Equitable health Inclusive Economic Quality Education outcomes and Growth and SDG5: well-being; decent jobs Gender Equality Global Health Security Determination of health Universal Health Coverage SDG All people and communities receive the quality health services target 3.8 they need, without financial hardship Actions Health Systems Strengthening Source: Adapted from Kieny et al.—WHO, 2016. strengthening public health competencies. In Universal Health Security theory, attainment of UHC requires strengthen- ing all aspects of the health system—including At its simplest, health security refers to the pro- those that produce, finance and deliver health tection from threats to health (Heymann 2015), promotion, disease prevention, treatment, and entails the intrinsic value of protection rehabilitation, and palliation—so that all people against risk (Anand 2011). Ensuring health secu- who need health services receive them, without rity for all by strengthening health and related undue financial hardship (Boerma et al 2014). systems to protect all citizens from threats to In practice, however, public health interven- health is an objective that seems entirely consis- tions can take a back seat. Schmidt et al (2015) tent with UHC, although universal health secu- identify several pressures that can lead to the rity perhaps goes further than the more narrow prioritization of the curative clinical services at interpretations of the UHC goal. Universal health the expense of population-level health inter- security includes reducing the vulnerability of ventions in pursuit of UHC goals. While the populations to health threats that spread within concept of UHC certainly incorporates public and across national borders and from inad- health services there is real possibility that vertent or malicious actions as well as natural public health interventions are under-prioritized causes. Moreover, universal health security both in resource-constrained countries pursuing the depends on and contributes to health systems UHC goal (Kutzin and Sparkes 2016). strengthening and health systems resilience. Setting the Context 21 No terminology is perfect. For example, in some and implementing the framework set out in this countries, “security” is a loaded and equivocal report and embodied in Recommendations 2–12. term. Yet even acknowledging these limitations, universal health security remains a useful fram- This chapter has summarized the case for ing concept, not least because it clearly con- investment in pandemic preparedness. If nects the health agenda to both human security countries and partners are convinced by the and economic security, enabling health security arguments, what should they do next? Chapter 3 to be thought of in the same light as other major looks at how countries can identify the gaps risks that governments should manage. in their pandemic defenses, assess resource needs, and develop an action plan. Similarly, the concept of health security con- nects health action to the broader development agenda. 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URL: http://www.who.int/csr/sars/country/ URL: http://www.who.int/emergencies/mers-cov/en/ table2004_04_21/en/ 24  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level 3 IDENTIFYING GAPS AND ESTIMATING FUNDING NEEDS International Cooperation on Infectious Threats: Historical Background The first International Sanitary Conference took 2004). The disease spread rapidly around the place in Paris in 1851 in response to a cholera globe. Concerns raised by SARS intensified the epidemic that ravaged Europe for nearly 15 IHR revision process, and by 2005, the scope years. A hundred years later, in 1951, member of the regulations was broadened to cover all states of the newly-constituted WHO adopted public health threats, including existing, new, the International Sanitary Regulations, which and emerging threats and those caused by were replaced by and renamed the International non-infectious disease agents. The revised IHR Health Regulations in 1969. Narrowly focused on (2005) required countries to report all possible six serious infectious diseases (cholera, plague, hazards with the potential to be public health yellow fever, smallpox, relapsing fever, and emergencies of international concern, regard- typhus), IHR (1969) depended on official country less of cause, and provide this information in a notification of disease outbreaks and did not timely manner. establish a formal internationally coordinated mechanism to contain disease spread or ensure Another important change introduced in IHR country commitment to standards. Further, some (2005) required all countries to develop, countries were reluctant to report diseases for strengthen, and maintain core capacities for sur- fear of trade and travel restrictions (WHO 2009). veillance and response (Katz and Fischer 2010). The resurgence of cholera, plague, and Ebola in These revisions came into force in 2007 and are the 1990s exposed the limitations of IHR (1969), binding for all WHO member states. However, which led to calls for their revision in 1995, they did not include an enforcement mecha- and a call to WHO in 2001 to support coun- nism for states that fail to comply. Peer pressure tries in strengthening their capacity to detect and fear of tarnished international image were and respond rapidly to communicable disease deemed to be sufficient motivators for coun- threats (WHO 2009). tries to invest in strengthening their core public health competencies. All this while, the IHR remained largely unchanged. Negligence persisted among IHR (2005) enjoyed only a couple of years of countries, and the capacities of most countries respite before the world was shaken by another to detect and respond to disease outbreaks public health threat. In 2009, H1N1 triggered remained low. This inertia was shaken by SARS, the IHR mechanisms. While the response was which made its first appearance in November largely successful, shortcomings of the IHR 2002 in China’s Guangdong province (Huang (2005) also became apparent (Katz and Fischer Identifying Gaps and Estimating Funding Needs 25 2010). The gaps and limited capacities in their Even if all countries had reported accurately and public health systems meant that countries in a timely manner, national self-assessments could not keep up with the public health, trade, have been shown to provide unreliable esti- and travel recommendations of the IHR. This mates of countries’ true capability. In addition, not only exposed vulnerabilities in states whose governments have not used a consistent set of domestic capacities were limited, but increased evidence-based metrics to measure compliance. risks for their regional and global peers. What These deficiencies undermine the integrity and became clear is that, even though all WHO utility of self-assessments. member states had agreed to IHR (2005), only a few had developed the mechanisms needed to Every WHO IHR Review Committee and all meet their obligations. major post-Ebola commissions have demanded that States Parties build and strengthen core capacities. Despite this, governments have not Strengthening IHR Implementation: Slow properly funded and implemented the required Going capacities, and international assistance has been limited (WHO 2016). Achieving IHR core After the entry into force of the IHR (2005) in capacities remains an indisputable baseline 2007, the 61st World Health Assembly (WHA) for global health security; the longer it takes to adopted a resolution whereby countries and detect an event, the slower the response and WHO are required to report to the WHA on IHR the more lives lost. implementation progress. The WHO secretariat subsequently published the IHR Core Capacity Monitoring Framework in 2010, accompanied Beyond Self-Assessment by an IHR Monitoring Tool (WHO 2011). The Monitoring Tool identifies 13 core capacities for Due to the recognized limitations of preparedness, detection, and response. These self-assessment-based reporting, calls for capacities are essential national public health external assessment of capabilities have been functions which provide health protection for raised several times, both by the WHO and other domestic populations and collectively also pro- actors. In 2014, the United States, in conjunction vide the basis for global health security. with partners from around the world, launched the GHSA, which developed eleven specific tar- Through the IHR Monitoring Tool, WHO asked gets to accelerate IHR and PVS implementation countries to conduct annual self-assessments and piloted a health security external assess- on IHR implementation, focusing on the 13 ment tool and process. In early 2014, just as core capacities. Countries were requested to the GHSA partnership was launched, an Ebola issue formal reports in 2012 (with additional epidemic began to spread in West Africa, even- reports in 2014 and 2016 for governments that tually triggering the declaration of a PHEIC by requested extensions) to declare if they had fully the WHO and the rapid rallying of international implemented the regulations. However, most response measures. The explosive proliferation countries have yet to fully establish these core of Ebola made very clear how insufficiently many capacities. In 2014, only 64 countries reported countries were prepared for such events; none meeting core capacities, while 48 failed even to of the West African nations were in compliance respond to the WHO request (Gostin and Katz with IHR. 2016). Despite extensions reaching into 2016, the situation had not changed much. After recommendations and approval from the Executive Board at its 136th session and the 68th World Health Assembly, the 26  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level TABLE 3.1  JEE and PVS Status Both PVS Only JEE Only PVS Neither PVS and JEE (no PVS) (no JEE) nor JEE Low-income countries (IDA), excluding 14 0 25 8 fragile and conflict affected states Fragile and conflict affected states 7 1 18 8 Middle and high income countries 12 3 55 48 TOTAL 33 4 98 64 WHO Secretariat proceeded to develop a countries meet performance and compliance blended evaluation approach that combined standards in a timely manner. Countries have a self-evaluation, peer review, and voluntary exter- strong economic incentive to participate in the nal evaluations, involving a mix of domestic and PVS process, since it expands their opportuni- independent experts (WHO 2015). A task force ties to engage in international trade in agricul- was also established to ensure that this tool was tural products. harmonized with existing assessment tools for IHR implementation. Using JEE and PVS to Map This process resulted in the Joint External Preparedness Gaps Evaluation, which built on and included the original GHSA targets. In naming the process, JEE and PVS tools thus comprise the starting “Joint” was intended to refer to an assessment points for identifying gaps in preparedness and combining self-assessment by a multi-sectoral estimating funding needs. As of April 21, 2017, 37 team of national experts, followed by an and 131 countries have completed JEE and PVS in-country review by a second team of similarly assessments, respectively (Table 3.1). Fourteen multi-sectoral international peer experts, i.e., the low-income countries have completed both “External Evaluation” (WHO 2016). The WHO JEE and PVS, while 25 have undergone a PVS Global Policy Group subsequently endorsed the assessment only. Among Fragile and Conflict- JEE tool as the single standard WHO instrument Affected States (World Bank 2017), 7 have to be used for externally assessing member completed both JEE and PVS, 18 have com- states’ IHR capacities. Countries are expected to pleted only PVS and 1 country has completed go through a JEE once every 5 years. only JEE.6 A further 32 countries have sched- uled JEE missions in the next eighteen months, National animal health sectors also undergo and an additional 28 countries have expressed internal and external assessments, facilitated interest but not yet scheduled a mission. Out of by the World Organization for Animal Health 199 countries, 64 countries currently remain with (OIE). OIE has developed a well-established neither a completed JEE nor a completed PVS external standard evaluation called the OIE PVS (IHR-MEF 2017).7 Tables A3.1–3.3 (placed in the Pathway, which assesses the quality of national annex to this chapter) list all the countries. veterinary services and animal health systems 6 The PVS assessment is more than 5 years old in 78 (out of 131) by identifying gaps and weaknesses in compli- countries, which would need to refresh the assessments soon. ance with OIE international standards (OIE 2017). 7 In addition, 6 countries (Georgia, Peru, Portugal, Uganda, Ukraine, The PVS tool then supports and promotes the United Kingdom) were assessed through the GHSA external evalua- tion during the pilot phase. This tool was later revised and replaced by establishment of priorities and strategies to help the JEE. Identifying Gaps and Estimating Funding Needs 27 EXHIBIT 3.1  Process for Development and Implementation of the NAPHS Strategy and Budgeting and implementation Diagnostic action planning Costing (including expenditure) Situation Strategic Developing Resource and Implementation Country core analysis planning & country plan operational of country capacity prioritization (Transforming planning action plan priorities into activities) Country monitoring and evaluation Activities for Assess current • Define the vision, objectives and Make the plan • Formally launch the National development capacities and priorities for the plan, based on actionable, Action Plan and major gaps the situation analysis identifying a • Put in place a governance implementation through • Develop the National Action timeline, mechanism for implementation of national • JEE Plan (NAPHS) that defines in accountabilities • Regularly track the status of action plans • PVS detail activities to achieve the and resource activities • Other IHR targets needs M&E work and other sources Budgeting and Baseline current Cost each • Include preparedness funding funding financing activity in the needs into national budgeting capacities and plan and assess and allocation process constraints (e.g., financing gaps • Advocate and secure through the international development HSFAT1 ) assistance (fund raising) Support of the planning template Create buy-in-and commitment for sustainable financing and e ective implementation— e.g., through the creation of an investment case 1 Health Security Financing and Assessment Tool RECOMMENDATION 2: (i) By the end of 2017, all assessments, the next step is for countries national governments should commit to par- to develop a plan prioritizing implementation ticipate in, and by the end of 2019, conduct a activities. To support countries in this endeavor, Joint External Evaluation (JEE) to assess their the Guidelines for Development of a National capacity to comply with the requirements of the Action Plan for Health Security (NAPHS, WHO International Health Regulations 2005 (IHR) to 2017) explain the principles of planning, cost- prevent, detect, and rapidly respond to public ing, financing, and implementing preparedness health threats; (ii) By the end of 2017, all national plans, as well as key considerations to maintain governments should commit to participate in, throughout the process. and by the end of 2019, conduct an evaluation of Performance of Veterinary Services (PVS) to Each national action plan will be specific to assess their capacity to comply with the World the country; however, a few guiding principles Organisation for Animal Health (OIE) standards. for effective planning can be provided (see Appendix A). Designing a National Action Plan The NAPHS process includes several dimen- sions, beginning with situation analysis and stra- Following the identification of a baseline and tegic planning and prioritization exercises that gaps through JEE/PVS and other relevant establish short-, medium-, and long-term goals 28  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level BOX 3.1  The Post-JEE Planning Process in Tanzania “This year, Tanzania made history by being the first country in the WHO African region and globally to develop a costed National Action Plan for Health Security (NAPHS). The journey has not been easy, because it has taken over a year after the country completed the JEE in February 2016. The processes of developing the NAPHS began in June 2016, three months after the JEE was completed. The NAPHS development process was started by the country’s IHR technical working group. While the focus was mainly on the JEE key findings and prior- ity actions, other previous assessments included the World Organization for Animal Health (OIE) Performance of Veterinary Services (PVS) assessment, the Integrated Risk Profiling Assessment, the Antimicrobial Resistance (AMR) situation analysis, the integrated disease surveillance and response (IDSR) review, and the vulnerability, risk assessment and mapping (VRAM) to mention a few. “During the costing workshop, there was an important discussion about the need for a coordi- nation platform, preferably at the Prime Minister’s Office and the creation of an inter-ministerial committee was proposed to ensure a seamless interplay between multiple sectors and other existing plans at all administrative levels of the country. “The Tanzania JEE has really galvanized multiple stakeholders to work together on health security in the country. Importantly, even at the regional and global level, the JEE and sub- sequently the planning and costing workshops brought together several agencies includ- ing: WHO (all three levels), the US CDC, Finland, the US Department of Defense, FAO, OIE, JICA, GIZ, PHE, the US Department of Agriculture, the World Bank, National Governments for cross fertilization. In terms of forging partnerships, it is not an overstatement to say that the Tanzania JEE and NAPHS development process have created and continue to create partner- ships in ways not seen before. Now that the plan is costed, the focus turns to its implemen- tation. Prior to implementation, the country is planning a high-level launch of the plan at the Parliamentary session in June 2017. The aim is to create public awareness including ensuring that Parliamentarians are aware and will lobby for sustained and adequate domestic funding.” Source: http://www.afro.who.int/en/tanzania/press-materials/item/9504-who-and-partners-develop-a-costed-national-action-plan-for- health-security.html Accessed on June 3rd, 2017 at 16:00 hrs. based on the gap analysis (Exhibit 3.1). Strategic determine how much activities cost, but also planning follows the structure of the main gaps to identify domestic and international financing identified through the JEE assessment, and a opportunities. template for planning is provided to countries and partners supporting the planning process Costing, referring specifically to the process of to help them identify and prioritize actions to fill identifying resources required to undertake pre- major capacity gaps. The guidelines promote paredness activities and assigning them a mone- the development of a monitoring and evalua- tary value, provides insights on where a country tion framework, which reinforces accountability has insufficient funds or a duplication of funds and multi-sectoral engagement, and resource for activities that strengthen health security. planning. Resource planning aims not just to Since the action plan is multi-year, the costing Identifying Gaps and Estimating Funding Needs 29 EXHIBIT 3.2  Country Planning in Pipeline: 16 More Countries in 2017 Ethiopia Bahrain Jordan Lebanon Qatar Sudan Exact timing TBD May Jun Jul Aug Sep Oct Nov Dec y Sierra Morocco Mozambique Namibia Kenya Leone Côte Senegal Bangladesh Ghana d’Ivoire Liberia Source: IHR-MEF Joint External Evaluation Missions Update. April, 2017. exercise reflects the same thinking, projecting Malaysia, Mali, Mozambique, Pakistan, Peru, costs across the following five years of expected Rwanda, Senegal, Sierra Leone, Tanzania, implementation. The exercise attempts to distin- Thailand, Uganda, Ukraine, Vietnam, and guish between capital and recurrent costs, and CARICOM8—have also developed national plans, assists stakeholders in deciding what types of but they are not costed.9 Originally drafted with funding vehicles are relevant, depending on the GHSA targets before the JEE was completed, task at hand. these plans are currently being converted to be in line with the JEE framework. As of April 21, 2017, three countries—Tanzania, Pakistan and Eritrea—have completed the This will still leave many countries with a com- costing exercise as part of the post-JEE pre- pleted evaluation but no announced effort to go paredness planning. An example of the costing through the critical next steps of planning, prior- exercise for the four core capacities of health itization, costing, and implementation. Several security in Tanzania is provided in Table A3.4 elements contribute to the current limited priori- (placed in the annex to this chapter). Sixteen tization of preparedness in many countries. The other countries have scheduled the post-JEE process outlined above should ideally apply to planning exercise in the last eight months of all countries. However, fragile states (e.g., those 2017 (Exhibit 3.2). 8 CARICOM—or the Caribbean Community—is an organization of A further 31 countries—Bangladesh, Burkina 15 Caribbean nations and dependencies whose main objective is to promote economic integration and cooperation among its members, Faso, Cambodia, Cameroon, Cote d’Ivoire, to ensure that the benefits of integration are equitably shared, and to Democratic Republic of Congo, Ethiopia, coordinate foreign policy. 9 Seventeen of these countries were assisted by the United States Georgia, Ghana, Guinea, Haiti, India, Indonesia, Government, which provided $1 billion in support for the design and Jordan, Kazakhstan, Kenya, Laos, Liberia, implementation of these plans. 30  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level experiencing conflict) need a tailored approach, However, to ensure that countries will be able since they are likely to be at high risk of infec- to successfully implement their planned actions tious disease outbreaks. However, primary and fill existing gaps in their capacities for and secondary health care services in these preparedness, two additional catalytic elements countries are generally disrupted, and building need to be in place: long-term national preparedness capacity is ■■ A financing proposal, needed to mobilize not a realistic aim. The focus must be on urgent sustainable funding over time needs. These include basic preparedness func- tions for prevention, detection, and response, ■■ A high level of buy-in and commitment— such as ad hoc immunization campaigns, surveil- driven by the formulation of a compelling lance, and the creation of emergency operations political-economic case for preparedness centers. These resources may be supplied by health partners within the scope of their humani- These additional ingredients clearly sound desir- tarian support. able in theory. But how can countries secure them in practice? This is the topic of our next The JEE framework includes Anti-Microbial chapter. Resistance (AMR) as one of the 19 dimensions for evaluation of a country’s core capacities. For AMR, the JEE assessment includes all activi- REFERENCES ties that present integration opportunities with infectious disease preparedness and most of the Aiken, C and Keller S. 2009. The Irrational Side of Change specific aspects that are particularly relevant for Management. McKinsey Quarterly. April 2009. the countries (health acquired infections, stew- Gostin, L, Katz, R. 2016. The International Health Regulations: ardship activities, etc.). However, the creation The Governing Framework for Global Health Security. 94 of national action plans for health security and Milbank Quarterly 264–313 (2016). Accessed on June 3rd, for AMR is currently happening in most cases 2017 at 10:00 hrs. URL: http://scholarship.law.georgetown. through different processes. Given the substan- edu/cgi/viewcontent.cgi?article=2783&context=facpub tial overlap of activities across infectious disease Huang, Y. 2004. The SARS Epidemic and its Aftermath in China: outbreaks and AMR (see Appendix B), and with A Political Perspective. Institute of Medicine (US) Forum on the aim to simplify processes and have an inte- Microbial Threats. Learning from SARS: Preparing for the grated approach to country resilience, countries Next Disease Outbreak: Workshop Summary. Washington could benefit from a more integrated approach (DC): National Academies Press (US); 2004. Accessed on to preparedness and AMR at the national level. June 3rd, 2017 at 10:00 hrs. URL: https://www.ncbi.nlm.nih. While the two topics are already mostly inte- gov/books/NBK92479/ grated in one of the diagnostic tools—the JEE IHR-MEF Joint External Evaluation Missions Update April 2017. framework—this would mean having also a joint (IHR Monitoring Internal Communication) costing, budgeting and funding process. Katz, R, Fischer, J. 2010. The Revised International Health Regulations: A Framework for Global Pandemic Response. RECOMMENDATION 3: Within nine months of Global Health Governance, Volume III, No. 2 (Spring 2010). completion of JEE and PVS, national govern- Accessed on June 3rd, 2017 at 10:00 hrs. URL: http:// ments should develop and publish a prioritized ghgj.org/Katz%20and%20Fischer_The%20Revised%20 and costed plan to implement recommendations International%20Health%20Regulations.pdf emerging from the JEE and PVS assessments, Gostin, L. 2004. The International Health Regulations and including regional elements where relevant. Beyond. The Lancet Infectious Diseases, Volume 4, Issue 10, 606–607. Accessed on June 3rd, 2017 at 10:00 hrs. The JEE and NAPHS offer robust frameworks DOI: http://dx.doi.org/10.1016/S1473-3099(04)01142-9 for country diagnostic and planning processes. Identifying Gaps and Estimating Funding Needs 31 World Bank. 2017. Harmonized List of Fragile and Conflict- World Health Organization. 2016. Joint External Evaluation Affected Countries. Accessed on June 3rd, 2017 Tool. International Health Regulations (2005) Monitoring at 10:00 hrs. URL: http://pubdocs.worldbank.org/ and Evaluation Framework. Accessed on June 3rd, en/154851467143896227/FY17HLFS-Final-6272016.pdf 2017 at 10:00 hrs. URL: http://apps.who.int/iris/bitstr World Health Organization. 2009. Frequently Asked eam/10665/204368/1/9789241510172_eng.pdf Questions about the International Health Regulations World Health Organization. 2016. Implementation of the (2005). Accessed on June 3rd, 2017 at 10:00 hrs. URL: International Health Regulations (2005) Report of the http://www.who.int/ihr/about/FAQ2009.pdf Review Committee on the Role of the International Health World Health Organization. 2011. IHR Core Capacity Monitoring Regulations (2005) in the Ebola Outbreak and Response. Framework: Checklist and Indicators for Monitoring Sixty-Ninth World Health Assembly. Provisional agenda Progress in the Development of IHR Core Capacities item 14.1 in States Parties. International Health Regulations World Health Organization. 2017. Guide for Development of (2005). Accessed on June 3rd, 2017 at 10:00 hrs. URL: National Action Plan for Health Security (NAPHS). Draft. http://www.who.int/ihr/IHR_Monitoring_Framework_ World Health Organization. 2017. WHO and Partners Develop a Checklist_and_Indicators.pdf Costed National Action Plan for Health Security. [Website World Health Organization. 2015. Implementation of the Post]. February 2017. Accessed on June 3rd, 2017 at International Health Regulations (2005) Report of 10:00 hrs. URL: http://www.afro.who.int/en/tanzania/press- the Review Committee on Second Extensions for materials/item/9504-who-and-partners-develop-a-costed- Establishing National Public Health Capacities and on IHR national-action-plan-for-health-security.html Implementation. (Para 43). Executive. 136th session 16 World Organisation for Animal Health (OIE). 2017. The OIE Tool January 2015 Provisional agenda item 8.3. Accessed on for the Evaluation of Performance of Veterinary Services June 3rd, 2017 at 10:00 hrs. URL: http://apps.who.int/gb/ (OIE PVS Tool). Accessed on June 3rd, 2017 at 10:00 ebwha/pdf_files/EB136/B136_22Add1-en.pdf hrs. URL: http://www.oie.int/support-to-oie-members/ pvs-evaluations/oie-pvs-tool/ 32  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level Annex to Chapter 3 TABLE A3.1  JEE/PVS Completion Status (low-income countries, excluding fragile states) Both PVS and JEE Only JEE (no PVS) Only PVS (no JEE) Neither PVS nor JEE Bangladesh Benin Congo, Republic of Cambodia Bhutan Dominica Ethiopia Bolivia Grenada Ghana Burkina Faso Moldova Kenya Cameroon Saint Lucia Kyrgyz Republic Cape Verde Saint Vincent and Maldives Guinea   the Grenadines Mauritania Guyana Samoa Mozambique Honduras Tonga Pakistan Lesotho Laos Malawi Senegal Mongolia Tanzania Nepal Vietnam Nicaragua Niger Nigeria Rwanda Sao Tome and Principe Sri Lanka Tajikistan Timor Leste Uganda* Uzbekistan Vanuatu Zambia *Countries that did GHSA assessments during the pilot phase TABLE A3.2  JEE/PVS Completion Status (fragile states) Both PVS and JEE Only JEE (no PVS) Only PVS (no JEE) Neither PVS nor JEE Afghanistan Somalia Burundi Iraq Cote d’Ivoire Central African Republic Kiribati Eritrea Chad Kosovo Lebanon Comoros Marshall Islands Liberia Congo, Democratic Micronesia, Federated Sierra Leone   Republic of   States of Sudan Djibouti Solomon Islands Gambia South Sudan Guinea Bissau Tuvalu Haiti Libya Madagascar Mali Myanmar Papua New Guinea Syrian Arab Republic Togo Yemen Zimbabwe Identifying Gaps and Estimating Funding Needs 33 TABLE A3.3  JEE/PVS Completion Status (middle and high income countries) Both PVS and JEE Only JEE (no PVS) Only PVS (no JEE) Neither PVS nor JEE Albania Finland Algeria Israel Andorra Montenegro Armenia Saudi Arabia Angola Jamaica Antigua and Nauru Bahrain United States of Argentina Japan  Barbuda Netherlands Belize  America Australia Kazakhstan Austria New Zealand Jordan Azerbaijan Korea, DPR Bahamas Niue Morocco Barbados Kuwait Belgium Norway Namibia Belarus Macedonia FYR China Palau Oman Bosnia Malaysia Cook Islands Poland Qatar Herzegovina Mauritius Croatia Portugal* Tunisia Botswana Mexico Cuba Russian Federation Turkmenistan Brazil Palestine Cyprus Saint Kitts and United Arab Brunei Darussalam Panama Czech Republic  Nevis  Emirates Bulgaria Paraguay Denmark San Marino Canada Peru* Estonia Singapore Chile Philippines France Slovakia Colombia Romania Germany Slovenia Costa Rica Serbia Greece Spain Dominican Seychelles Guatemala Sweden  Republic South Africa Hungary Switzerland Ecuador Suriname India Tanzania (Zanzibar) Egypt Swaziland Ireland United Kingdom* El Salvador Thailand Italy Equatorial Guinea Trinidad and Korea, Republic Fiji  Tobago Latvia France Turkey Liechtenstein Gabon Ukraine* Lithuania Georgia* Uruguay Luxembourg Iceland Venezuela Malta Indonesia Monaco Iran, Islamic  Republic *Countries that did GHSA assessments during the pilot phase TABLE A3.4  Preparedness Costing Exercise, Tanzania, FY 2017 (US$ ‘000) 2017 2018 2019 2020 2021 TOTAL Prevent 5,834 11,946 12,335 9,338 8,901 48,355 Detect 8,628 13,134 15,481 12,870 8,162 58,274 Preparedness 1,467 2,970 606 735 788 6,566 Other IHR-Related 2,454 5,556 5,752 3,378 3,278 20,419 Hazards, Points of Entry Cross-Cutting 154 154 308 GRAND TOTAL 18,383 33,760 34,329 26,321 21,129 133,922 34  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level 4 PREPARING A FINANCING PROPOSAL, A COMPELLING INVESTMENT CASE AND A CHANGE MANAGEMENT STRATEGY Once a country has developed a costed and ministries are usually not very successful in prioritized plan, the next steps are to work securing the funding needed. When the compe- out how to finance this plan and then how to tition for domestic and donor resources is fierce, implement it effectively. This requires three key advocates of preparedness must excel in mak- components: first, a realistic financing proposal ing their case. In a keynote address delivered to ensure inclusion in domestic budgets and, at the first Annual Universal Health Coverage where relevant, win the support of development Financing Forum in Washington, DC, April 14–15, partners; second, a compelling investment case 2016, Ngozi Okonjo-Iweala, former Minister of that ensures sustained economic and political Finance, Government of Nigeria and presently support for improving preparedness; and finally, the Chair of the Board of Gavi, the Vaccine a change management strategy that facili- Alliance, noted that “Ministers of Health and the tates the committed engagement of relevant health community in general really need to learn stakeholders. to speak the language of Finance Ministers.”10 All three components are essential. A financing proposal without an investment case will get Preparing a Financing Proposal no traction. Even a well-financed plan without a change management strategy will likely fail to A robust and realistic financing proposal pro- deliver. Reinforcing preparedness is not a quick vides the essential bridge between having fix: it is a complex, multi-stakeholder process a costed and prioritized plan for reinforcing that needs to stretch well beyond health minis- preparedness, and having an adequately-funded tries and can often entail far reaching changes in plan fully reflected in line items in the national established attitudes, practices and institutions. budget. Developing a detailed financing pro- posal for preparedness is often a complex Public health priorities typically receive limited exercise because it cuts across so many dif- support in resource-constrained low-income ferent types of activity and different parts of countries, where health budgets are driven government. primarily by immediate health needs and vertical programs, and where finance ministries are First, spending on the capabilities and infra- often less inclined to support resource commit- structure required for preparedness typically ments for longer-term payoffs. Despite evidence 10 Accessed on June 3rd, 2017 at 16:00 hrs. URL: http://blogs. of high economic rate of return on invest- worldbank.org/health/mobilizing-domestic-resources-universal-health- ments in preparedness, the health and related coverage Preparing a Financing Proposal, a Compelling Investment Case and a Change Management Strategy 35 cuts across multiple departments and budget response alongside other risks including earth- priorities within the health ministry. For exam- quakes and hurricanes. This inevitably involves ple, some aspects of preparedness, such as multiple entities. According to the Sendai front line disease surveillance, diagnostics and Framework for Disaster Risk Reduction,11 the curative care, are intrinsically embedded within international accord on disaster risk reduction, the primary care delivery and hospital systems. “effective disaster risk reduction and manage- Other aspects, such as the most sophisticated ment depends on coordination mechanisms biosafety and biosecurity procedures appropri- within and across sectors and with relevant ate for the most lethal agents, national emer- stakeholders at all levels, and it requires the full gency plans and vaccine stockpiles, are typically engagement of all state institutions of an exec- established via specialist entities at a national utive and legislative nature at national and local level. Furthermore, other priority health initia- levels and a clear articulation of responsibilities tives, such as combatting anti-microbial resis- across public and private stakeholders, including tance or tackling endemic infections like malaria business and academia, to ensure mutual out- or tuberculosis, may overlap with or inadver- reach, partnership, complementarity in roles and tently compete with the preparedness agenda. It accountability and follow-up” (UNISDR 2015). is important that preparedness does not become yet another vertical silo, but complements and Fifth, where development assistance is involved, contributes to these other objectives, forming issues often arise around the trade-offs between part of the broader agenda of health system domestic resourcing and development assis- strengthening. tance, plus challenges in measuring and coordinating donor flows given different devel- Second, significant components of the pre- opment partners’ distinct priorities and reporting paredness agenda involve other government requirements. Finance ministries may hold back ministries, such as the ministries of agricul- committing domestic resources if they believe ture, interior and trade. This inevitably triggers development assistance can be obtained for this debates about which part of government should purpose. Unless there is flexibility and coordi- pay for which elements of the preparedness nation, development partner priorities can be agenda. Coordination between the ministries of difficult to reconcile with the country’s own plan. health and agriculture is particularly important given that so many infectious disease threats Sixth, where private sector health providers or are zoonotic in origin. Reinforcing veterinary non-governmental organizations play a criti- systems of surveillance and control of animal cal role, decisions need to be made around health can be an important part of strengthening the resourcing of these activities and their preparedness. integration within the overall plan. Where private for-profit providers play a critical role Third, in many countries there is a division of in a country’s health care delivery, the answer responsibilities for different elements of pre- may be to impose regulations requiring such paredness between the national government providers deliver the relevant elements of the and entities at a state, provincial or community level. This can create considerable scope for 11 The Sendai Framework, adopted by UN Member States on arguments about budget responsibilities. 18 March 2015 at the Third UN World Conference on Disaster Risk Reduction in Sendai City, Miyagi Prefecture, Japan, is a 15-year, volun- tary, non-binding agreement which recognizes that the State has the Fourth, the “preparing to respond” component primary role to reduce disaster risk but that responsibility should be shared with other stakeholders including local government, the private of the preparedness agenda must be aligned sector and other stakeholders. It aims for the substantial reduction of disaster risk and losses in lives, livelihoods and health and in the eco- with each government’s overall emergency nomic, physical, social, cultural and environmental assets of persons, response strategy, encompassing pandemic businesses, communities and countries. 36  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level pandemic plan (such as disease surveillance for disease outbreaks, including biosafety/ the patients they cover) at their own cost. Where biosecurity arrangements, sophisticated non-governmental agencies play a critical role, laboratory services, and mechanisms for consideration must be given that these are stockpiling vaccines, therapeutics and funded sustainably. emergency equipment, plus relevant research and development capacities. Finally, where regional networks and partner- 4. Capacities being introduced or developed as ships play an important role in strengthening part of other health initiatives, such as those preparedness, these often require distinct directed against anti-microbial resistance, financing arrangements. Examples of regional endemic diseases, or those designed to initiatives for preparedness include the Mekong reinforce key delivery systems, such as for Basin Disease Surveillance, Southern Africa maternal care. Center for Infectious Disease Surveillance, 5. Capacities within the veterinary health and the Middle East Consortium on Infectious services relating to the identification and Disease Surveillance. control of potentially zoonotic infections. Given these dimensions of complexity, it should 6. Capabilities and infrastructure in sectors not surprise that many countries have struggled, other than health and veterinary, such as or at least, taken considerable time, to trans- agriculture, food, chemical, transport, etc., late the plans resulting from their JEE and PVS that relate to pandemic preparedness. assessments into robust financing proposals. On top of costing the required improvements, There is no single, universally applicable it is necessary to allocate these costs across approach to surmounting these challenges, the different entities in a manner that fits with since every country’s budgeting system and a country’s established budgeting principles administrative arrangements are different. Yet, and processes. Doing this rigorously involves various tools are available. For example, the mapping both the proposed additional invest- World Bank, with financial support from an ment and ideally, existing spend across multiple Australia-led multi-donor trust fund, is develop- entities and at least 6 dimensions: ing a tool called the Health Security Financing Assessment Tool (HSFAT), which defines health 1. Administrative, legal, and regulatory security as the protection of human and animal measures at a national level that relate health from infectious diseases and other public pandemic preparedness and response- health risks and emergencies, and addresses readiness to all hazards, such as emergency health risks at the human-animal interface as operations center and communication it considers the prevent, detect, respond, and systems. other IHR-related hazards. Structured in line with the JEE protocol, HSFAT examines important 2. Capacities integrated within the established elements of the post-emergency or recovery preventive and curative health services phase of the response, and reviews coordination that play a critical role in protection against and implementation arrangements at national infectious disease outbreaks, such as and subnational levels for pandemic prepared- the overall system for capturing disease ness and response efforts. HSFAT is currently incidence and standard diagnostic services. being piloted in Vietnam with the intent to roll it 3. Stand-alone or specialized public health out more broadly in the second half of 2017. capabilities and infrastructure specifically dedicated to the identification, prevention, Since it is important that investments in pre- containment and response to infectious paredness are integrated with a country’s overall Preparing a Financing Proposal, a Compelling Investment Case and a Change Management Strategy 37 BOX 4.1  The Health Security Financing Assessment Tool The HSFAT is organized into seven sections: 1. Health Security Organization gathers essential information about current health security efforts, for example as identified by the JEE, to define the scope of necessary financing arrangements 2. Stakeholder Mapping identifies the key players in health security in the country 3. Institutional Assessment examines the functionality and appropriateness of coordinating mechanisms and implementation arrangements 4. Macro-fiscal Context provides information on the country’s overall fiscal space to address health security financing 5. Financing for Health Security Budgeting and Resource Allocation reviews the budgeting, resource allocation and resource mobilization for health security 6. Financing for Health Security Components assesses the funding for specific health security action packages as defined in the JEE 7. Efficiency and Sustainability of health security financing examines issues related to allocative, technical and economic efficiency and sustainability healthcare expenditure planning, there would securing sustainable funding for preparedness, be merit in the World Bank and WHO working experience suggests that they are not sufficient together to support countries, linking the HSFAT to obtain the money and deliver the plan. What with the broader medium term expenditure is also required is a compelling investment case framework, in the context of the National Health and a comprehensive change management Accounts and preparedness sub-accounts being strategy. developed for 2018. The optimal mix of arguments to be used to RECOMMENDATION 4: Depending on the national make the investment case will vary from coun- budget cycle, but ideally within three months of try to country, depending on the scale of addi- developing a prioritized and costed plan follow- tional investment required and the broader ing JEE and PVS assessments, national gov- political and economic context. However, as ernments should prepare a detailed financing shown in Exhibit 4.1 the arguments are likely proposal to support implementation of the plan to be based on four motivations: (i) ensuring to improve preparedness. economic stability and growth; (ii) contributing to universal health coverage; (iii) improving security and protecting social stability; and Developing a compelling investment (iv) managing externalities to the regional and case and change management global community. Some stakeholders, such as the finance ministry, may worry most about the strategy risks to economic stability and growth of the country, given the severe disruption infectious While a costed, prioritized plan and robust disease outbreaks can cause to everyday financing proposal are essential prerequisites for economic life, trade and investment. Others 38  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level EXHIBIT 4.1  Potential Argument Library Based on the 4 Key Motivations of Stakeholders Managing Improving security externalities to Ensuring economic stability Contributing to universal and protecting regional and global and growth of the country health coverage social stability community • Preparedness activities require a • Strengthening preparedness • Bioterrorism threat: • After the Ebola relatively small annual spending against disease outbreaks the same activities that crisis in 2014–15, to prevent or limit extremely high protects the population and improve pandemic the world has future losses, resulting from: contributes to universal preparedness can realized that • Reduced productivity from health coverage protect against the risk preparedness is infected groups and • Pandemic preparedness of bio-security key to global slow-down of economic enables improved • Preparedness health security activity prevention, detection and activities can reduce • International • Direct costs of response response to regularly the potential loss of funders are willing activities occurring epidemics, key security personnel to support • The economic cost of outbreaks specifically in certain and/or disruption of investments in can be disproportionate to the geographical areas (e.g. capacity to perform public health and number of people infected (if the meningitis, yellow fever, security activities may give threat triggers panic reactions, cholera…) • Preparedness preferential e.g., limits the circulation of • Preparedness activities activities can reduce lending terms and goods and people, absenteeism) enable earlier detection and social disruption that increased funding • In addition, even in “non-crises faster response to outbreaks: results from infectious to countries that times”, foreign direct this has proven to be disease outbreaks, prioritize investments in certain sectors e ective in reducing the thereby protecting preparedness (e.g., tourism) may be spread of infectious diseases social stability discouraged by a perceived (changing the “shape of the higher risk of epidemic curve” of infected people) may be motivated more by the potential to Given the cross-cutting, multi-stakeholder save lives and contribute to the strength of nature of preparedness, an effective change the health system. Some constituencies may management strategy is also required to ensure be concerned about the potential impact of successful delivery of even a well-funded pandemics, whether natural or as a result of plan. Multiple parts of government, the private bioterrorism, on a nation’s security, and more sector and civil society must be engaged and broadly on the need to protect governance coordinated to achieve the desired objectives. and social stability. And finally, others, includ- Formal mechanisms—clear processes, tools and ing neighboring countries and development systems, including financial incentives—are key partners, may be motivated by the positive to supporting implementation. At the same time, effect investing in preparedness can have on other important elements need to be in place, reducing externalities for the regional and such as: global community. ■■ Buy-in and engagement of country lead- In making the economic arguments, it will be ership and other key influencers from the much more powerful if economic estimates of beginning of the diagnostic phase for spon- the potential losses from pandemics at a global sorship; normally, this starts with one spon- level can be translated into more regional or sor in the country (e.g., the Prime Minister, national estimates. While many countries will Minister of Health, or other key actor); the have their own approaches for doing this, country-level investment case mentioned Appendix C could provide a helpful starting above is key to support buy-in and under- point. standing of the risks Preparing a Financing Proposal, a Compelling Investment Case and a Change Management Strategy 39 ■■ Mobilization of the right capabilities and allocate some funds to preparedness already expertise; this includes the creation of in the 2018 annual budget even before the an attractive career path and learning IWG report is accepted and implemented and opportunities for experts working on steps are put in place to generate incremental preparedness-related topics resources for preparedness. ■■ Inclusion of preparedness in the leadership’s Identifying new sources of financing, both agenda for communication with their citizens domestically and through external assistance, and with partners and stakeholders (includ- is a big challenge for resource-constrained ing the private sector and civil society) within economies. This is the focus of the next chapter, the country and in international forum which examines how countries can mobilize and allocate resources to strengthen pandemic There is no single, universally applicable preparedness. approach to devising the investment case and change management strategy for a particular country. One practical approach is placed in REFERENCES Appendix D, which provides a framework and suggestions for development of the investment Aiken C and Keller S. 2009. The Irrational Side of Change case. Management. McKinsey Quarterly, April 2009 Basford T and Schaninger B. 2016. The Four Building Blocks of RECOMMENDATION 5: Each national government Change. McKinsey Quarterly, April 2016 should develop an investment case, articulat- Heymann et al. 2015. Global Health Security: The Wider Lessons ing the political and economic arguments for from the West African Ebola Virus Disease Epidemic. The integrating the costed plan into national budget Lancet, Volume 385, Issue 9980, 1884–1901 cycles and committing resources to reinforce Watkins SM. Perrotta DM. Stanbury M. Heumann M. Anderson and sustain preparedness, plus a change man- H. Simms E. Huang M. 2011. State-level Emergency agement strategy to engage and coordinate Preparedness and Response Capabilities. Disaster Med relevant stakeholders. Public Health Prep. 2011;5 (Suppl 1): S134–S142 World Health Organization. 2017. Weekly Bulletin on Outbreaks Notwithstanding that countries move forward and Other Emergencies. Week 18: 29 April–05 May 2017. with recommendation 2–5, its implementation Accessed on June 3rd, 2017 at 10:00 hrs. URL: http://apps. may well take us to end of 2018. The current who.int/iris/bitstream/10665/255272/1/OEW18-294552017. Ebola outbreak in DR Congo and the weekly pdf?ua=1 reports of public health events in Africa (WHO UNISDR. 2015. Sendai Framework for Disaster Risk Reduction, 2017) suggest the urgency for countries to 2015–2030. Geneva 40  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level 5 IDENTIFYING SOURCES OF FINANCE AND MEANS OF MOBILIZING/ALLOCATING FUNDS TO PREPAREDNESS Government Spending on Health: Variations Across Countries There are vast differences across countries Afghanistan, Tanzania, Kenya, Lesotho, Burundi, in how much of their public resources they Vietnam, Gambia, Malawi and Nicaragua. spend on health, a metric that is a good proxy Likewise, there are many high-income countries for the extent to which health is prioritized by (>$10,000 per capita) that allocate less than the governments.12 World Bank data suggests that IDA average of 9.8 percent of aggregate gov- in 2014 the share of health in aggregate gov- ernment expenditure to health. These include ernment expenditure in 190 countries ranged Kuwait, Qatar, Malaysia, Oman, Brazil, Argentina, from 2.4 percent in Timor-Leste to 27.9 per- Gabon, Saudi Arabia, Russia, Seychelles and cent in Andorra, with a mean of 11.8 percent. Latvia.13 Unsurprisingly, higher income countries devote a larger share of government expenditure to Empirical analyses do not provide good explana- health (17.8 percent in the high-income OECD tions for the observed variations in government countries) than do lower-income countries prioritization of health. In a review of the sparse (9.8 percent in the low-income IDA countries). literature on cross-country comparisons, Tandon et al (2014) find that factors such as democrati- However, significant variations exist in the share zation, lower levels of corruption, ethnolinguistic of health in total government spending even homogeneity, and more women in public office after controlling for national income. Among appear to be correlated with higher shares of countries under $5,000 per capita income, government spending on health. However, the health’s share of aggregate government spend- authors note that these findings are sensitive ing ranges from a low of 2.4 percent in Timor- to model specification. The study reports that Leste to a high of 23.9 percent in Nicaragua. countries that explicitly focus on expanding Low-income countries that allocate more to the breadth and depth of health coverage, health from public resources than the IDA aver- as opposed to those that focus on budgetary age of 9.8 percent include Rwanda, Madagascar, Uzbekistan, Sierra Leone, Uganda, DRC, Burkina 13 The shares of government expenditure throw light only on the Faso, Sri Lanka, Nepal, Zambia, Sudan, Liberia, issue of prioritization, not on government health expenditure across countries, which depends not only on health’s share in the budget but also on the budget amount. Other factors that are important in any consideration of government spending on health are efficiency of 12 Government spending on health is probably a good proxy for allocations within the overall envelope and the extent to which public spending on preparedness, on which good data is not available. financing for health is pro-poor in its outlays. Identifying Sources of Finance and Means of Mobilizing/Allocating Funds to Preparedness 41 targets only, are more likely to be able to priori- In general, the investments required for pre- tize and sustain allocations to health. paredness will vary significantly across countries depending on whether: (1) they already have Against this background of wide variations reasonably well-functioning health systems, in national government health spending, this that just need a stronger overlay of specific chapter focuses on mobilizing and allocating preparedness capacities; (2) they need to fix resources for preparedness. It explores options underlying deficiencies in the health systems related to domestic resource mobilization, exter- and then integrate preparedness capacities; nal development assistance, and the private sec- and (3) they are fragile or failed states, and lack tor, and it looks at innovative financing models even the very basic systems components, which countries may want to consider. must be created before preparedness can be meaningfully addressed. For these reasons, and because it is difficult to get a precise assess- Scale of Financing Required for ment of the amounts already being spent, it is Preparedness difficult to come up with a single figure for the additional investments required. However, the Estimates of financing required for prepared- range of $1.9–$3.4 billion per year suggested ness vary dramatically, depending on whether by the NAM Commission is probably not far off underlying health system capacities need to the mark. Incremental investments of this scale be strengthened first or whether only a limited would certainly enable significant improvements set of specific preparedness capacities must in universal health security. be created. The post-JEE costing exercises in Tanzania and Pakistan suggest that just $0.5 to $1 per capita per year may suffice. An analysis of self-assessed requirements under IHR in sev- Domestic vs. International Funding: eral other countries, such as Bangladesh, Nepal Basic Principles and Indonesia, also result in similar modest estimates. As a fundamental principle, countries should aim to increase their domestic spend on develop- Yet the investments required will be much higher ment and specifically health, including pre- if underlying clinical capacities must be built paredness, to maximize country ownership and first, especially where it is necessary to: build self-reliance over time. This idea has been artic- and equip new facilities or reconstruct damaged ulated in many settings: for example, the com- or destroyed facilities; provide training and mitment of African Union countries to allocate hire health workers; secure commodities and 15 percent of their national budgets to improve supplies required to deliver a basic package the health sector (Abuja declaration 2001), and of services; create a logistics system including the partnership for improved domestic research emergency relief for protracted emergencies; mobilization (Addis Tax Initiative 2015). strengthen local governance structures; intro- duce financial management systems and health Whenever international development assistance information systems. In a detailed analysis of a is deployed, it should focus on “catalytic” activ- sample of 43 lower and middle income countries ities or activities that have high global exter- without the foundations for emergency pre- nalities and low domestic demand. Catalytic paredness capacity, Soucat et al (2017) calculate activities allow a step change in a country’s level resource needs in the range of $15–$30 per of preparedness. These are expected to be capita per year for low-income and fragile states. mostly one-off costs—but can also be recurring 42  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level costs, if these are critical to establish capacities Improved Tax Collection in the countries, or if executing certain functions at a centralized level enables scale efficiencies. The search for additional resources therefore Activities with high global externalities and low requires an assessment of other sources of domestic return are those that promise high fiscal space, such as a conducive macro-fiscal impacts for global risk mitigation but may be environment following high rates of economic deprioritized in countries without international growth, higher tax collections, increased bor- support. rowing, higher levels of development assistance, and savings generated by increased efficiency Regional entities and neighboring countries can in current areas of public spending. All these play an important role in providing technical potential sources of fiscal space are equally and financial support for preparedness activities applicable to health and other sectors, and it is in cases where they can add value through: therefore important that countries express their coordination (e.g., the establishment of the specific commitment to preparedness through Mekong Basin Disease Surveillance network the portion of new public finance they are willing and Africa CDC); economies of scale (e.g., joint to allocate to it. drug procurement in Central America by SICA); or sharing expertise. We believe that domestic resource mobili- zation (DRM) is the key to development. We The private sector should also be included welcome the historic agreement reached at the across the entire preparedness planning pro- United Nations Third International Conference cess, and its expertise should be leveraged in on Financing for Development held in Addis carrying out planning activities. Ababa in July 2015, in which countries agreed to an array of measures aimed at widening the revenue base, improving tax collection, and Domestic Resource Mobilization for combatting tax evasion and illicit financial flows. The modality of domestic resource expenditures Preparedness is also important; governments must establish national control mechanisms and transparent Governments that want to invest in prepared- public procurement frameworks, while ensuring ness need to generate additional fiscal space for equal participation and transparency in budget- health in ways that increase public spending in ing processes. the desired areas of attention without jeopardiz- ing the government’s long-term financial sustain- Some countries with positive macroeconomic ability. The simplest way of generating additional prospects show sizeable space for increasing financing for preparedness is by increasing public spending on health by as much as 1 per- its allocation at the expense of spending on cent of GDP, even without increasing the share other activities. But this is not always practi- of health in the budget (Barroy et al 2016). In the cal, both because of the difficulties associated case of the Democratic Republic of Congo, pub- with agreeing which activities to stop financing lic spending on health could almost double if the and because of the high unmet demand for favorable economic growth forecasts are real- increased investments in other public-good ized (Barroy et al 2014). Likewise, countries like interventions. Myanmar, which is growing at 6.4 percent, will also increase public spending on health with- out altering the budget share. In countries like Guinea, however, economic stagnation following Identifying Sources of Finance and Means of Mobilizing/Allocating Funds to Preparedness 43 the Ebola epidemic will result in contraction in Development Goals. Tax revenue as a percent- overall revenue growth and thus also reduce age of GDP for IDA countries (70 out of 77 for public spending on health (Barroy et al 2016). which data is available) shows that, in 2014, 30 countries collected less than 15 percent and 55 Strengthening domestic resource mobilization, countries less than 20 percent of their GDP (IMF however, is not just a question of raising rev- 2014). enue; it is also about designing a tax system that promotes inclusiveness, encourages good Experts agree that there is considerable governance, matches society’s views on appro- potential to increase tax revenue in develop- priate income and wealth inequalities, and pro- ing countries (European Parliament 2014). An motes social justice. Taxation, which is integral econometric analysis (comparing performance to strengthening the effective functioning of the in differing countries) suggests that many state and to the social contract between gov- low-income countries could increase their tax ernments and citizens, provides governments ratios by 2–4 percent of GDP (IMF 2011). A with the funds needed to invest in development, common element of success stories is sustained relieve poverty and deliver public services. It political commitment at the highest levels: even offers an antidote to aid dependence in devel- administrative reforms can prompt strong oppo- oping countries and provides fiscal reliance and sition. Reforms must be entrenched, however, to sustainability that is needed to promote growth. avoid subsequent slippage (McIntyre 2007). As We believe that governments should apply countries move to strengthen their tax systems progressive tax systems, make collection pro- and improve revenue collections, development cesses more efficient, and increase tax compli- partners may lend support. OECD, for example, ance (IMF 2015). Through tax reform, countries has supported governments by fielding “tax can broaden their tax base and work towards inspectors without borders”, and the IMF is pro- integrating the informal sector with the formal viding technical assistance in the revenue area economy. in some 130 member countries. How Much Is Enough? Earmarked Taxes to Finance Preparedness There is no single target tax ratio that would Another way in which countries can create addi- be appropriate to all countries. However, there tional fiscal space for preparedness is through is increasing evidence that it is hard to secure earmarking. The basic idea is to use specific lasting economic growth with a tax ratio below taxes for specific purposes. This can take the 15 percent of GDP (Gaspar, Jaramillo and form of specific taxes for specific end uses (such Wingender 2016). Despite marked increases as mandatory health insurance premiums), spe- in tax ratios in the last two decades, in which cific taxes for general, unspecified uses (such as median tax revenues in low-income countries alcohol taxes) or general taxes for specific uses increased by 4.3 percent of GDP (IMF, OECD, (such as devoting a fixed percentage of general WBG, 2016), the median tax ratio level in taxes to a specific program). A distinction can low-income countries remains at only 13 per- also be made between “actual” and “notional” cent, which is just two-fifths of the level in OECD earmarking. Actual earmarking is a rigid version, countries (33.8 percent). Half of sub-Saharan in which funds are channeled mechanically to African countries still mobilized less than 17 per- their assigned use (health or public transpor- cent of their GDP in tax revenues in 2014, below tation or whatever else), with no possibility of the minimum level of 20 percent that the UN adjustment based on changing circumstances. considered necessary to achieve the Millennium Notional earmarking builds in more flexibility in 44  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level the allocation of funds, but for that reason is less mid-cycle adjustments and where potential protective against subsequent diversions. revenues from earmarked taxes can be placed in an extra-budgetary fund, earmarked taxes for health may actually enhance governments’ Advantages of Earmarking ability to respond and augment budgeting allocations for health. In some circumstances, Earmarking is a contentious issue. We will earmarked taxes can be a means of counter- start by considering several advantages policy acting negative externalities associated with makers have found in earmarked taxes. First, certain high risk behaviors, such as smoking and visibility associated with earmarked taxes serves alcohol consumption, by increasing funding for to highlight the priority that the government the associated health ailments and costs (Cashin accords to the relevant policy issues. Where et al 2017; Tandon et al 2014). The long-term domestic revenues are being collected for new impacts of these taxes on health-risk behav- health services or programs that are not well iors remain to be confirmed. However, recent known or understood, earmarked taxes may country examples show that such earmarked provide an opportunity to enhance the public’s taxes (“sin taxes”) may initially decrease people’s understanding of the costs associated with a incentives to purchase health-compromising service delivered. Second, earmarked taxes products, especially cigarettes. These taxes for health can protect revenues destined for potentially reduce people’s risk of suffering dis- social services that might otherwise be allocated eases associated with consumption of the dan- elsewhere during the policy and budget pro- gerous products (Tandon et al 2014). However, cess. This is particularly relevant for countries the fact that sin taxes help reduce the consump- with weak oversight of budget expenditures tion of, for example, tobacco and associated and where special interests and corrupt prac- disease risks has nothing to do with whether the tices can influence budget allocations. Third, taxes are earmarked or not. Indeed, most coun- where earmarked taxes facilitate a tighter linking tries have sin taxes which are not earmarked to between financing for health and services health. delivered and received, public spending will achieve greater allocative efficiency. This will also facilitate a more transparent budgeting pro- The Downsides of Earmarking cess and enhance the public’s perception that taxes received by the government are tied to Reduced flexibility, economic distortions, and a perceivable social benefit. In addition, where the pro-cyclical nature of earmarked taxes are these ties are overtly evident, political pressure some of the problems noted in the literature. may enhance accountability of governments to Earmarking by definition reduces flexibility in the render services promised (Cashin et al 2017). budget process, and could also reduce the influ- ence of policy making on budget allocations. Thus, depending on the political and economic For example, budget processes that are shaped context, countries may find that earmarked taxes by mid-term policymaking may become less can increase revenue protection, allocative effi- flexible, and countries with weak mechanisms ciency, public compliance, government account- for ensuring coordination across different social ability, and people’s understanding of the costs sectors may encounter increases in fragmenta- associated with services, without excessively tion of financing, adverse distributional effects, constraining funding flexibility. and potential inability to increase revenue. Earmarking can discourage the use of the com- In situations where public finance manage- modity or activity being taxed, and thus create a ment processes offer little opportunity for distortion in the economy. Identifying Sources of Finance and Means of Mobilizing/Allocating Funds to Preparedness 45 In addition, since budgets are fungible, ear- commitments facilitated by earmarked taxes for marking one revenue source (channeling it to UHC, and the generation of revenues for UHC. a health initiative, for example) could be offset The analysis turned up little evidence that ear- by cuts in other sources, as a result of which marked financing is associated with enhanced earmarking would not bring about a significant domestic revenues for UHC, overall (Maeda et and sustained increase in resources for the al 2014). However, some countries showed quite program or initiative being supported by the tax positive results with earmarking. Thailand, for (Cashin et al 2017). Indeed, Barro et al (2016), in example, which has a substantial informal sector, a qualitative review of 35 studies on fiscal space has struggled to raise sufficient domestic rev- for health, finds little evidence to support the enues for UHC via payroll taxes alone, and has prospective role of earmarked funds in expand- found success with earmarked taxes on general ing fiscal space for the health sector. Instead, it revenues (Maeda et al 2014). identifies economic growth, budget reprioritiza- tion, and efficiency measures as the main drivers WHO case studies on earmarking tobacco of fiscal space for health expansion. taxes in Botswana, Egypt, Iceland, Romania, Poland, Philippines, Vietnam, Thailand, and Panama indicate some potential for increased Earmarking in Country Practice domestic revenues. However, this potential must be contextualized by the share of gov- Real-world practice does not necessarily follow ernment expenditure on health generated policy experts’ prescriptions. Notwithstanding by this financing mechanism—from a low of the advantages and drawbacks of earmarked 0.001 percent in Poland to a high of 1.3 percent taxes as analyzed in the literature, at least in Panama. The introduction of tobacco sin taxes 80 countries worldwide utilize earmarked taxes in the Philippines has been associated with an for health in some capacity. Some countries increase in revenues for health. However, some utilize earmarked taxes for health to finance a difficulties during the application of new reve- national health initiative, such as Ghana, Estonia, nues towards health services have arisen both in and the Philippines, which earmark part of their the Philippines and in Botswana. The problems revenues for national health insurance. South result primarily from weaknesses in the public Africa utilizes earmarked taxes for health to finance management processes (Cashin et al mobilize domestic resources for the national 2017). HIV/AIDS epidemic. More than 20 countries earmark tobacco tax revenue specifically for Two studies provide precise quantification of health. Several countries earmark all their rev- the potential effect of earmarked taxes. A fiscal enues for health, while others, like Mongolia, space study undertaken in Peru notes that Thailand, Qatar, Tuvalu and Bulgaria, earmark a the tax rate on tobacco products, which is just small percentage. Some countries, like Thailand 37.8 percent of the retail price, could gener- and the Philippines, earmark a small portion of ate fiscal space equivalent to approximately tax revenues from alcohol to health (Cashin et al 0.02 percent of GDP if the tax rate on tobacco 2017, Tandon et al 2014, WHO 2009). products were increased to the average price in Latin America (Matus et al 2015). Another study Country experiences of revenue generation finds that increasing excise taxes on tobacco in with earmarked taxes vary. A study of eleven Gabon could expand revenues by 0.05 percent countries by the Japan-World Bank Partnership of GDP (Saleh et al 2014). Program on UHC examined the relationship between political commitments to UHC, financial 46  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level The Bottom Line: Earmarking for well harmonized across donors and well aligned Preparedness Could be a Reasonable Option with national priorities. Whenever possible, donor support must be used deliberately to cat- We believe that countries should explore the alyze sustainable domestic financing. use of earmarked taxes to generate additional fiscal space for preparedness. This would be The G7 nations and many individual donor especially important in countries with low tax- countries have made explicit commitments to to-GDP ratio or where certain sectors are not support preparedness. By delivering on these taxed. Industries and activities that contribute promises, donor countries will reinforce a critical to increasing pandemic risk, such as antibiotic global public good. Many donor countries and use for growth promotion in meat production, organizations are already engaged in financ- and those that stand to gain the most from ing preparedness efforts at country and global investments in pandemic preparedness, such levels (Box 5.1). as tourism, are potentially good candidates for earmarked taxes. Even though budgets are fungible, and over the long-term increases in Priorities for Donor Investments in earmarked taxes may be offset by cuts from Preparedness other sources, earmarking could play an import- ant role in raising the profile and visibility of We propose that donors adopt the follow- the issue. It would be important, however, that ing three priorities for funding preparedness countries examine the advantages and down- activities: sides of introducing new earmarked taxes, and take a considered decision based on their 1. Capital investments or one-off expenditures specific-country contexts. in poorer countries, where such expenditures can work catalytically. Wherever possible, RECOMMENDATION 6: To increase fiscal space, beneficiary countries should then be national governments should examine ways of prepared to shoulder recurrent expenditures. generating incremental domestic resources to 2. Regional spending on shared resources. finance preparedness, whether by (i) improving Funding at this level can be critical for overall tax design and collection; or (ii) introduc- functions and tools such as cross-border ing earmarked taxes where they might be an disease surveillance and laboratory effective way to generate additional resources. facilities. While critically important, these are sometimes difficult to fund from domestic budgets. Mobilizing Development Assistance 3. Creating baseline preparedness and for Preparedness prevention capacities in fragile and conflict- affected states, war zones, or other settings For most countries, domestic resources are where these basic capacities are simply the best solution for financing preparedness. absent and must be built from the ground up, However, development assistance will also play before meaningful preparedness activities a powerful role in creating and strengthening can even begin. preparedness capacities in some contexts. It is important that development assistance for pre- In all cases, development should seek to paredness be focused on the right countries and support the financing of preparedness through activities, and that the delivery of donor funds be the national health security plans and budgets Identifying Sources of Finance and Means of Mobilizing/Allocating Funds to Preparedness 47 BOX 5.1  Current Donor Support for Preparedness Donors contribute significant sums to strengthening prevention, preparedness and response capacities in developing countries. Data for 2015 from OECD’s Creditor Reporting Survey (CRS)1 and the G-Finder survey,2 show that the top 9 donors—United States, United Kingdom, Germany, Canada, Japan, Australia, Korea, Norway3 and the Bill and Melinda Gates Foundation—contributed over $4 billion to preparedness activities in 2015 alone.4 This funded seven major preparedness functions: capacity strengthening, response, treatment and case management, governance and stewardship, education and behavior change, activities in the veterinary sector, and Research and Development (R&D). The United States accounts for over 60 percent of total disbursements, followed by the United Kingdom (13 percent), and the Bill and Melinda Gates Foundation (10 percent). The remaining donors—Canada, Japan, Australia, Korea and Norway—account for the balance 17 percent. Countries in sub-Saharan Africa are by far the largest beneficiaries. Most of the disbursements from the United States, the United Kingdom, and Japan go to Nigeria, which is also the second largest recipient of donor funds from Canada and Norway. Nigeria, which received $220 million in 2015, is the largest recipient of all donor flows for preparedness, followed by Uganda ($89 million), Kenya ($75 million), Malawi ($66 million), India ($64 million), Tanzania ($64 million), South Africa ($62 million), Mali ($61 million), Afghanistan ($58 million) and Ethiopia ($57 million). Forty-two percent of donor financing went to R&D, followed by capacity strengthening (31 percent), and response (10 percent). The balance 17 percent supported treatment and case management, governance and stewardship, education and behavior change and agriculture and unspecified activities. Of the $2.5 billion non-R&D flows, $1.8 billion went to support activities that focused on malaria ($754 million), Ebola ($441 million), polio ($313 million), tuberculosis ($214 million), and Avian Influenza ($36 million). 1 The CRS database records individual development assistance flows from OECD donor countries to developing countries. The database is organized by recipient country, recipient region and sector of disbursement, such as health or agriculture, and categorized by different taxonomies relating to that sector. For the health sector, the first sub-category is basic health or health general, followed by purpose, such as infectious disease control or health personnel training. 2 The G-Finder database is compiled from a survey on country R&D spending on Neglected Diseases. The survey includes infor- mation on the disease and differs from the CRS in that it details investments to domestic research institutes and think-tanks as well as investments in R&D in developing counties. 3 The analysis considers eight donor countries that account for 85% of total health development assistance disbursements for 2015 in the CRS database, and one philanthropic donor, the Bill and Melinda Gates Foundation, due to high levels of funding for R&D reported in the GFinder database. 4 Estimated duplicated reported spending between the two databases is deducted from the CRS database. emanating from the JEE process, and use the The ongoing JEE and planning exercises offer JEE criteria as benchmarks of achievement. enhanced opportunities to donors and recipi- Wherever possible development partners should ents alike in channeling development assistance seek to secure commitments from recipient gov- resources to critical areas of preparedness. ernments around matching and ongoing funding The costing and financing exercises conducted so as to maximize the impact of the develop- by countries after JEEs provide an objectively ment assistance. assessed and validated enunciation of resource 48  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level EXHIBIT 5.1  Output Indicators Can Demonstrate Progress Against Specific Security Activities Identified as Priorities in the NAPHS Example: D1.1. Laboratory testing for detection of priority diseases Target • Real-time bio-surveillance with a national laboratory system and e ective modern point-of-care and laboratory-based diagnostics As measured by • A nationwide laboratory system able to reliably Indicators could be conduct at least five of the 10 core tests related to the overall measure or to the actual Action items to • Ensure access to networks of national and international implementation of move from JEE laboratories established to meet diagnostic and confirmatory specific action items level of capacity laboratory requirements and support outbreak investigations identified in the plan 3 to 4 for events specified in Annex 2 of IHR (2005) • Procure diagnostic equipment, supplies and reagents to ensure relevant diagnostic capacities to perform core tests of priority diseases (5 or more of the 10 core tests) Source: JEE Assessment Tool, CDC Library of Milestones, APSED Guidelines, Existing Country Plans. requirements for strengthening preparedness. prioritized activities identified by the NAPHS The rigorous process of diagnostic, planning, that could move a country from one JEE level to and costing initiated with the JEE assessment the next. Exhibit 5.1 provides an illustration. And should serve to strengthen the investment case finally, outcome indicators, which are tied to the that recipient countries need to make for addi- impact that outputs have on infectious disease tional funding support. Likewise, it should also outbreaks, could include the frequency and give confidence to donor countries that their impact of infectious disease outbreaks in the support will fund gaps identified by objective period following activity implementation, com- external experts. pared to a control period before implementation. Closely related is the issue of measuring pre- paredness. We suggest using a mix of indica- Strengthening Regional Preparedness tors that would be useful, both for a country’s internal purposes in monitoring and improving A disease outbreak in a country has costly system performance, and as a way for partners consequences not only for itself, but also for its to understand how a country is progressing in its neighbors and the global community. Knowing capacity to prevent, detect, and control disease this, an individual country acting in its own inter- outbreaks. This could include some combina- est and by itself may be motivated to underin- tion of process, output and outcome indicators. vest in the prevention of infectious diseases, Process indicators are those that assess coun- because: (i) it would expect its neighbors and tries’ progress in planning, costing, and financing the global community to share in the costs of preparedness activities. For example, a process preparedness since all neighboring countries indicator could be a completed NAPHS, with would stand to benefit from investments by each clear timelines, ownership, and implementation country in that neighborhood cluster; and (ii) it plans. Output indicators, which measure a coun- would expect richer countries to invest, since try’s progress in implementing specific activities they stand to lose relatively more in the event of identified in the NAPHS, could be linked to the an outbreak. Regional preparedness provides Identifying Sources of Finance and Means of Mobilizing/Allocating Funds to Preparedness 49 BOX 5.2  The West Africa Regional Disease Surveillance Systems Enhancement (REDISSE) Program The REDISSE Program is an interdependent series of projects to strengthen national, regional and cross-sectoral capacity for integrated disease surveillance and response in West Africa. It is financed by a combination of IDA credits and grants, with co-financing through multi and single donor trust funds. The Program allows countries to access both country and regional IDA financing, such that for every dollar of IDA allocated to the Program from the country IDA envelope, one to two dollars is allocated from the regional IDA envelope. Total proposed financing for the REDISSE Program is estimated to be $450 million of which $261 million has been committed under the first two projects in the Program in support of preparedness activities in Guinea, Sierra Leone, Senegal, Guinea Bissau, Liberia, Nigeria and Togo (Benin and Cote d’Ivoire are confirmed to join in the third project). In order to ensure that the human-animal-environment interface is addressed and the One Health approach is central to project design and implementation, the Program has been developed jointly by the World Bank’s Health and Agriculture practices with two main objectives: (i) to address systemic weaknesses within the animal and human health systems that hinder effective cross sectoral and cross border collaboration for disease surveillance and response; and (ii) in the event of an eligible emergency, to provide immediate and effective response to said eligible emergency. Areas supported by REDISSE include surveillance and information systems; strengthened lab- oratory capacity; epidemic preparedness and rapid response; workforce training, deployment and retention; and institutional capacity building for project management, coordination and advocacy. The REDISSE Program builds upon partnerships at the global and regional level and promotes partnership and collaborative approaches at the national and subnational levels. Consultations with other partners have been extensive, and includes WHO, OIE, US CDC, USAID, BMGF, Canada and China. a classic public good—it mobilizes investments in 2014–15 not only exposed weaknesses in that the market will not and in which countries the public health surveillance, preparedness, under-invest. And it is cheaper to develop high- and response systems of the three affected level expertise at the regional multi-country level countries; it also emphasized the importance rather than at the level of an individual country. of regional collaboration and underscored Thus, one priority area that we have identified the need for a more harmonized approach to for investment by development partners is disease surveillance and response for potential regional preparedness. cross-border disease outbreaks. The Ebola epidemic began in Guinea, but rapidly spread Recent events have revealed gaps in prepared- to neighboring countries. Containment was ness at the regional level in some settings, hampered by the absence of systematic collec- highlighting the containment opportunities that tion, reporting, and exchange of surveillance can be lost when protective systems at this and laboratory data across national borders in level fail. The Ebola outbreak in West Africa real time. 50  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level Recognizing this, the World Bank is investing efficiencies by acting collectively in pursuit $450 million in West Africa in the Regional of common objectives through trans-border Disease Surveillance Systems Enhancement collaboration and cooperation. The World Bank (REDISSE) Program (Box 5.2). The program already dedicates IDA resources for regional finances regional-level policy dialogue and projects and provides them to countries on activities that will promote information exchange, a concessional basis, in order to encourage timely collective action, and efficient use of countries to adopt regional solutions to shared country and shared resources, such as refer- national problems. We encourage other devel- ence labs, training institutions, and commod- opment partners to follow suit. ity stockpiles, for disease surveillance and response. It also provides countries with financ- Other development banks can make espe- ing that is under their direct control to rapidly cially important contributions. Regional multi- address identified priorities. This mechanism lateral development banks are well placed to should help countries respond to potential pan- support regional initiatives on preparedness. demics at the first signs of the outbreak. Development banks can see that features such as regional laboratory networks and disease WHO is also providing Guinea, Liberia, Sierra surveillance systems are critical components of Leone, and other West African countries with countries’ risk management infrastructure, and support to develop and strengthen regional these banks can plan their lending and invest- disease surveillance and response. WHO assists ments accordingly. these countries in assessing, restructuring, and strengthening integrated country-level pre- The IWG further proposes that a discussion paredness systems. be initiated on including preparedness as an individual item in the Development Assistance The World Bank is also supporting a regional Committee (DAC). Such a move would enable laboratory-strengthening initiative in East Africa. better monitoring of development partners’ The $129 million East Africa Public Health support for preparedness. It would facilitate Laboratory Networking Project is helping Kenya, holding development partners accountable for Rwanda, Tanzania, Uganda and Burundi estab- the commitments they make and create a forum lish a network of efficient, high quality, accessi- for regular discussion of preparedness financing ble public health laboratories for the diagnosis issues among stakeholders. and surveillance of TB and other communica- ble diseases in the East African Community RECOMMENDATION 7: Development partners member states. The project supports 32 facil- should fulfill and build on existing collective ities across the five countries, of which 26 are and bilateral commitments to help finance hospital-based satellite laboratories located in preparedness in countries needing support, cross border districts, with the aim of enhancing focusing on: (i) in-country capital investments access to diagnostic services, expanding dis- and one-off spends; (ii) multi-country regional ease surveillance and emergency preparedness initiatives; and (iii) failed and fragile states efforts, and serving as a platform for learning, where domestic resourcing is not a realistic knowledge sharing, and training. option. To maximize the catalytic impact of their assistance, development partners should We believe that development assistance should structure their support to the health security further emphasize regional approaches to plans emanating from the JEE process and strengthening preparedness. Increased financial encourage national governments to match flows in support of regional initiatives will help investments and commit to ongoing financing countries reap economies of scale and other from domestic resources. Identifying Sources of Finance and Means of Mobilizing/Allocating Funds to Preparedness 51 Engaging the Private Sector in investments in its own preparedness—e.g., pro- Financing Preparedness tecting its workforce or enhancing the resilience of its supply chain—where the private benefits justify the spend, but it is unlikely to invest Investment in preparedness against outbreaks significantly in broader public goods, unless of infectious diseases and AMR is generally industry associations or the government can financed through the public purse. Such funding overcome the collective action problem. While is constrained by fiscal capacity and the inevita- the lack of awareness can be tackled, the fact ble budget trade-offs among competing prior- that much of pandemic preparedness involves ities. Private sector companies (including the the creation of public goods is intrinsic—and whole range of business enterprises spanning why most public health spend is financed manufacturing, services, transportation, agricul- through government. A deeper understanding ture, and natural resources) have much to lose of shared value and collective impact of invest- from disease outbreaks, but typically make little ments in preparedness should be leveraged to direct financial contribution to preparedness. We shift this dynamic. believe that this must change. Finding Solutions Business and Preparedness: Untapped Opportunities There are a variety of possible solutions to this problem, though none is a “silver bullet.” First, To date, companies have generally made very it is important to build greater awareness of limited contributions to financing prepared- disease outbreak risks among private sector ness. There are two broad reasons for this. companies. This is a prerequisite for any other First, private sector companies lack adequate action, since making companies more aware awareness of the risks of infectious outbreaks of the risks will likely make them less resistant (including drug-resistant strains), and tend to to potential taxes or regulations. It will encour- underestimate those risks. Only those that have age them to reinforce their own resilience, and directly experienced disruption to customers, will facilitate their engagement in preparatory supply chain, and workforce from such causes planning with government agencies, particularly attach much weight to such risks. Second, where they have relevant assets or capabilities. private sector companies find it difficult to justify Greater awareness may be achieved through investments in public goods, such as national such means as observing “pandemic aware- disease surveillance systems, national vacci- ness” days and running simulation exercises. nation programs, national laboratory networks, and national emergency operations centers, Second, private sector companies can be because these do not generate profits for their required to invest in certain aspects of pre- shareholders. It is therefore important that a paredness through regulation. In other arenas, case is made to show that preparedness is a the financing of risk mitigating actions is largely good investment for business—which is likely to achieved through imposing the costs on the attract attention of private companies. Private private sector through regulation. For example, sector companies do fund philanthropic/corpo- banks are required to commit vast amounts of rate social responsibility activities, but these are capital and spend significant sums to reduce the typically limited in scale. risk of financial crises, and often pay levies to fund the regulatory agencies that oversee them Where a company is aware of the risks from (Box 5.3). In theory, similar approaches could infectious diseases, it might well make specific be applied to mitigating the risks of disease 52  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level BOX 5.3  Deposit Insurance Explicit deposit insurance is a measure implemented in many countries to protect bank depositors, in full or in part, from losses caused by a bank’s inability to pay its debts when due. Deposit insurance institutions are for the most part government run or established, and may or may not be a part of a country’s central bank. In some instances, they may also be private entities with government backing, or completely private entities. Many national deposit insur- ers are members of the International Association of Deposit Insurers (IADI), an international organization established to contribute to the stability of financial systems by promoting inter- national cooperation and to encourage wide international contact among deposit insurers and other interested parties. According to the IADI, 125 countries have instituted some form of explicit deposit insurance. The United States is one of the first countries to have implemented a deposit insurance scheme. The Federal Deposit Insurance Corporation (FDIC), which is a government corpo- ration, provides deposit insurance for depositors at US banks. The FDIC was created by the 1933 Banking Act during the Great Depression to restore trust in the American banking system. More than one-third of banks failed in the years preceding establishment of the FDIC, and bank runs were common. Since the passage of the Dodd–Frank Wall Street Reform and Consumer Protection Act in 2011, the FDIC insures deposits in member banks up to US $250,000 per ownership category. The FDIC and its reserves do not receive public funds; member banks’ insurance dues are the FDIC’s primary source of funding. Several African countries employ deposit insurance institutions. In Uganda, deposit insurance is part of the National Bank. In Sudan and Kenya, deposit insurance institutions are part of their Central Banks. Zimbabwe utilizes a deposit insurance countries corporation. In all cases, these institutions are primarily funded with premium levies collected from member institutions. In Zimbabwe, for instance, the current annual premium rate is 0.2 percent of average eligible deposits, and the premium is paid on a quarterly basis. The notion of requiring the banking industry to invest in mitigating their own risks is quite well established, even in low-income countries. outbreaks. Companies could be required to also minute. Imposing regulations like those ensure a basic minimum level of protection for described would have little real impact in reduc- their employees. Companies whose activities ing risks (and to the extent that it disadvantaged contribute to the risk of outbreaks—such as the formal private sector, could increase the food producers—could be required to invest in risk). capabilities and infrastructure to reduce such risks. The challenge here is that in many of the Third, governments can encourage or mandate countries where the risk of infectious disease corporate social responsibility (CSR) spending outbreaks is high, the proportion of people dedicated to preparedness. India, for example employed by the formal private sector is very requires larger companies to commit at least small, and the market share of such compa- 2 percent of their profits to corporate social nies in key industries like food production is responsibility. Indonesia has also mandated Identifying Sources of Finance and Means of Mobilizing/Allocating Funds to Preparedness 53 CSR. Further, governments can encourage platform. In local settings, chambers of com- corporate philanthropy by giving public recogni- merce may serve as coordinating vehicles. tion or matching funds for private contributions toward preparedness. The challenge, however, The Private Sector Roundtable (PSRT) was is that companies typically prefer to devote their instituted in 2015 to mobilize industry to help philanthropic activities to projects with more countries prepare for, detect, and respond to visible outcomes. health-related crises, and strengthen systems for health security. The PSRT engages with Finally, governments can work with governments and companies in the health care, companies that can leverage existing assets communications, energy, finance, technology, and capabilities to contribute directly to transportation, logistics, and other sectors to preparedness. One example that is already support countries in reaching the goals of the being pursued is the use of cellular tower GHSA’s 11 Action Packages. PSRT members align networks to provide distributed refrigeration public health needs with business objectives, capacity for vaccines. Another example is and are committed to leveraging their invest- private sector healthcare providers, who must ments and infrastructure to protect employees be integrated into national preparedness and their families; to preserving the functioning arrangements to ensure comprehensive disease of high quality health services for the entire surveillance and coordinated response planning. population; and to maintaining assurance of This would probably require a combination of economic development in the countries where regulation and practical cooperation, but in this they operate. way, private sector healthcare providers could contribute “in kind” to financing preparedness. The PSRT aims to be the central touchpoint for Likewise, companies specializing in logistics companies seeking to contribute to the aims and supply chains must also be integrated into of the GHSA, and to coordinate its efforts to strengthening delivery systems, which are an promote global health security. It has identi- integral part of preparedness. fied several GHSA Action Packages, as well as cross-cutting priorities, which align with member Leveraging such corporate assets is a potentially companies’ capabilities and which have the powerful approach, since the private sector has potential to impact several Action Packages. significant infrastructure and capabilities, but These include supply chain and logistics; policy making it work requires companies to under- development and advocacy; workforce devel- stand the risks and preparedness requirements, opment; partnerships; technology and analytics; and governments to understand what compa- and AMR. nies can contribute—plus an atmosphere of trust and cooperation. We see a role for the PSRT in mobilizing the private sector all over the world. The PSRT is well-positioned to identify industry-specific roles Vehicles for Business Collaboration in and contributions during pandemic prepared- Preparedness ness and response phases, especially among companies involved in healthcare, financial Several alliances, forums, and other mechanisms services, transportation, logistics, and public exist that can be mobilized to help promote and relations, as well as other firms with wide- coordinate private-sector engagement in pre- spread marketing networks. We believe that the paredness efforts at global, national, and local PSRT should establish national chapters in all levels. On the global stage, the World Economic countries, which should include multinational, Forum (WEF) may be an important facilitating national, and local industry groups. 54  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level In coordination with the public system, the system of risk identification, risk assessment, risk national chapters of private companies should modelling, risk monitoring, risk preparedness, work toward building greater awareness of risk management, and contingency planning. pandemic risks among their members, conduct Membership in an insurance scheme can include periodic simulation exercises, and foster col- both requirements to meet certain standards of laboration at the national and local levels for preparedness and incentives to further improve implementation of their roles and contributions preparedness and reduce risk. of preparedness and response. The global catastrophe re/insurance market RECOMMENDATION 8: National governments has been transformed over the past thirty years should incorporate the private sector into their by an engagement with science and engineer- strategy for reinforcing preparedness, through ing. The process of catastrophe risk modelling a combination of awareness-building, direct has led not only to far greater knowledge of involvement in preparedness and response the hazards faced, but also of the property planning, and regulation. Where private sector and people at risk and their vulnerability to the companies contribute directly or indirectly to hazard events. The culture of active risk man- the risks of disease outbreak and spread by agement encoded into insurance of domestic, the nature of their business, national govern- commercial, industrial, and technical risks—for ments should introduce regulations requiring example, refusing coverage if sprinklers are not such companies to invest in risk mitigation and installed or rewarding a firm that installs them preparedness. with premium discounts—has spread through- out the industry. This greater knowledge has allowed the development of financial models Leveraging Insurance to Finance that enable firms to assess the comparative cost Preparedness and benefit of different risk management strate- gies. Metrics such as average net loss cost, the worst loss that may be expected every 10 years The role of insurance in disaster response has (a measure of impact on annual result), and the been increasingly recognized over the past ten worst loss that can be expected every 200 years years. Contrary to traditional development assis- (a measure of capital safety) have been broadly tance models, in which money invariably arrives adopted. Regulators and rating agencies have too late, insurance can be designed such that it embraced these metrics. Overall, the insurance disburses very rapidly. For instance, it has been industry has advanced in technical and scientific estimated that $1 received quickly as a drought sophistication far beyond the earlier periods of is recognized is worth $4 to $5 received after its history. This has strengthened the industry the lag associated with the traditional response financially—and made it an especially important process. The fast delivery of money, coupled partner for preparedness. with a pre-determined contingency plan, can be very effective in saving lives and livelihoods, and reducing the negative economic impact of the crisis (Clarke and Hill 2013). Disaster Response Insurance: Regional Initiatives A New Science of Risk Management The value of disaster response insurance in the natural catastrophe field is proven. The Insurance is not just about financial payment at first regional disaster response scheme, the times of loss but necessarily includes a whole Caribbean Catastrophe Risk Insurance Facility Identifying Sources of Finance and Means of Mobilizing/Allocating Funds to Preparedness 55 (CCRIF) was launched in 2007 offering insurance Insurance Innovation: The Pandemic to governments against tropical cyclones and earthquakes. CCRIF is effectively a mutual insur- Emergency Financing Facility ance entity, operated on behalf of its member governments and protected by the international During 2015 and 2016, the World Bank and reinsurance market. Over its 10 years of opera- other partners developed the PEF, a paramet- tion, CCRIF has paid out almost $70 million over ric insurance fund across a range of diseases 22 separate claims, in every case money being focused on IDA countries, with premiums being paid to member governments within 14 days of funded by donor nations. Through this initiative the event occurring. Governments receive con- the World Bank and its partners have worked firmation that payment will be made within days through many of the issues around the frame- of an event occurring, allowing them to pre-plan work within which insurance fits, the structures rather than wait for an uncertain claim payment of parametric triggers, the modelling of the paid at an unspecified time in the future. risks, and the finding of insurance capacity. But all agree that the PEF is a pilot, a first step. For Likewise, the African Risk Capacity (ARC), was example, the PEF does not directly incentivize created in 2014 to offer insurance policies to recipient countries to invest in preparedness African countries against drought and tropi- in order to reduce premiums; is focused just cal cyclone. As part of the design of ARC, an on IDA countries; and has a limited basis of (re) Agency of the African Union was created to help insurance carrier support. Finally, the PEF was countries understand their risk, design appro- never intended to focus on the private sector priate insurance solutions, make appropriate operating in the risk regions, and so is silent on contingency plans and, after a loss, review the the opportunities to provide business interrup- contingency plans and monitor their implemen- tion type insurance into the private sector, again tation. Countries are not allowed to buy insur- to incent preparedness. ance products unless they have been through this process, with contingency plans and prod- In that context, there is an opportunity to build uct design signed off by ARC Agency represen- on this pilot to develop a PEF 2.0 that directly tatives. In 2014–15, ARC paid three West African incentivizes recipient country investment in countries a total of $26 million in response to a preparedness by involving recipient countries drought event. in paying some portion of the premiums. This may mean broadening the focus beyond IDA Insurance companies could potentially play countries and focusing on those that have a significant role in stimulating investment in already achieved a certain minimum standard preparedness. Pandemic insurance schemes against the JEE criteria. The priority in countries do not directly contribute to financing prepared- with fundamental gaps in preparedness and the ness, but are designed to ensure the availability underlying health system infrastructure should of financial resources should an outbreak occur, be to fund the rectification of these weaknesses. which can facilitate rapid containment and overall resilience. The most powerful benefits of In addition, there is also an opportunity to insurance from a risk reduction perspective tend extend the delivery of parametric insurance to to be: a) the additional insights that are gener- the private sector. Broader take-up business ated by insurance providers into risk drivers and interruption insurance that covered infectious mitigants; and b) the incentives created for gov- disease risks would simultaneously increase ernments and private sector companies, which economic resilience and create greater aware- will be incentivized to take action to reduce the ness of infectious disease risks among private risks and thus the premiums. sector leaders. The product offering would rely 56  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level on the same data and analytical tools as the Directorate-General for External Policies of the Union— offering to governments. Here the challenge is Directorate B: Policy Department Study. to stimulate the demand since most companies Evaluative Science & Statistics 2014. Investing in Universal underestimate the risks to their businesses. Health Coverage: Opportunities and Challenges for Health Financing in the Democratic Republic of Congo. New partnerships between multilateral Washington, D.C.: World Bank. Accessed on June 3rd, organizations and insurance firms may 2017 at 10:00 hrs. URL: http://documents.worldbank.org/ accelerate innovation. A promising collaborative curated/en/782781468196751651/Investing-in-universal- platform is the Insurance Development Forum, health-coverage-opportunities-and-challenges-for-health- set up in 2015 during the Paris Climate Summit financing-in-the-Democratic-Republic-of-Congo as a public/private partnership between Gaspar V, Jaramillo L, and P. Wingender. 2016. “Political the insurance industry and international Institutions, State Building, and Tax Capacity: Crossing organizations. the Tipping Point.” An International Monetary Fund (IMF) Working Paper. RECOMMENDATION 9: The Insurance Inaugural 2016 Report of the Inter-Agency Task Force on Development Forum, the World Bank, and other Financing for Development—Addis Ababa Action Agenda: partners should work together to: (i) develop Monitoring commitments and actions. Chapter II.A on the next iteration of the Pandemic Emergency Domestic Public Resources. Financing Facility (PEF 2.0) that specifically ties International Monetary Fund (IMF). Organization for Economic recipient countries’ investments in prepared- Co-operation and Development (OECD), the United ness to relief of their contributions to PEF 2.0 Nations (UN), and the World Bank Group (WBG). 2016. July premiums; (ii) deliver maximum participation Enhancing the Effectiveness of External Support in Building from the insurance markets to provide capacity Tax Capacity in Developing Countries. A report prepared for PEF 2.0; and (iii) investigate how insurance for submission to G20 Finance Ministers. for business interruption resulting from disease International Monetary Fund (IMF). 2011. “Revenue Mobilization outbreaks can be provided to private sector in Developing Countries.” Prepared by the Fiscal Affairs companies in target countries. Department March 8, 2011. International Monetary Fund (IMF). 2015. “Current Challenges in Revenue Mobilization: Improving Tax Compliance.” A Staff REFERENCES Report presented in an informal session. International Monetary Fund (IMF). 2016. Government Finance Barroy H., Sparkes S., Dale E.; 2016. Assessing Fiscal Space for Statistics Yearbook, 2015. Health in Low and Middle Income Countries: A Review of International Monetary Fund. 2015. “Making Public Investment the Evidence. 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Washington, DC: The World Bank. 58  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level Annex to Chapter 5 TABLE A5.1  Donor Flows for Preparedness (Excluding HIV), US$ million (2015) Country Preparedness R&D Total United States 1,552 933 2,485 United Kingdom 404 118 522 Germany 116 48 164 Canada 132 3 135 Japan 142 10 152 Australia 69 19 88 Korea 18 0 19 Norway 42 6 48 BMGF 419 419 Total 2,475 1,556 4,031 TABLE A5.2  Donor Flows by Function (excluding HIV), US$ million (2015) Germany Kingdom Australia Norway Canada United United States Japan BMGF Korea Function R&D 973 187 89 7 10 19 1 6 419 Capacity Strengthening 657 261 68 90 89 43 14 11 0 Response 373 6 2 3 13 3 0 1 0 Treatment/Case 46 46 1 0 0 0 0 5 0 Management Governance/Stewardship 24 8 0 19 0 0 0 0 0 Education & Behavior 7 0 0 5 0 0 0 0 0 Change Agriculture 1 7 5 4 16 3 1 0 0 Unspecified 404 8 0 6 23 20 2 26 0 Total 2,485 523 165 134 151 88 18 49 419 Identifying Sources of Finance and Means of Mobilizing/Allocating Funds to Preparedness 59 6 INCENTIVIZING COUNTRIES TO PRIORITIZE ALLOCATION OF FUNDS TO PREPAREDNESS A substantial reduction in the threat of pandem- Assessing Economic Vulnerability to ics can only happen if countries choose to invest and strengthen their national preparedness sys- Infectious Disease Outbreaks tems. To make such investments, governments need to be convinced that the costs associ- Infectious disease crises can have substantial ated with strengthening public health systems effects on the economic stability and prosperity are a necessary expenditure in the context of of countries they affect. Recent experiences competing demands for social and economic demonstrate the macro-criticality of such investment. The current under-preparedness of outbreaks across a range of economic con- many countries suggests that this case has not texts. The countries hardest hit by the 2014–15 been well made, despite the well-documented Ebola outbreak in West Africa suffered losses socioeconomic risks associated with infectious of approximately 5 percent of GDP (The World disease outbreaks. Bank 2015), whilst the 2015 outbreak of MERS in South Korea resulted in over $1bn in lost eco- It can be challenging to convince politicians nomic activity (US Department of State 2016). to spend money to help avoid something and Similar experiences followed the outbreaks cause it not to happen; after all, it is hard to of H1N1, SARS and Zika, and recent estimates claim credit for an investment that is successful put the expected global losses resulting from only if nothing happens as a result. It is import- pandemic influenza at $570 billion each year ant, therefore, that Ministers of Finance see and this century, about 0.7 percent of global GDP. feel the results of investments in preparedness Of note, none of these assessments include in the present even as the same investments the substantial costs of failing to contain an contribute to the prevention of ill effects later. outbreak that subsequently goes on to become One way of doing this is by developing indices endemic in a population, as happened with HIV, or measures based on preparedness that influ- potentially resulting in losses an order of magni- ence the inflow of private capital. Another way is tude greater. by using measures of preparedness to influence the flows of development assistance, such as Despite the huge economic and financial impact from the concessional financing from the World of infectious disease outbreaks, the scale of Bank. these impacts is not well known to decision makers responsible for prioritizing investment for public goods. The World Bank and others Incentivizing Countries to Prioritize Allocation of Funds to Preparedness 61 have produced occasional thematic assess- Sovereign Credit Rating ments of pandemic risk; however, these efforts have been sparse and not systematically linked The assessment of economic vulnerability to to country policy and budgeting processes. infectious disease outbreaks could be com- The prevailing picture around macroeconomic bined with other financial risks to the economy assessments of risk and pandemic risk is one of and be incorporated into a broader macro- neglect. An analysis of macroeconomic assess- economic analysis. Credit rating agencies (see ments undertaken of fifteen countries affected Box 6.1) do consider political instability and by infectious disease crises showed a tendency other socio-economic factors, but pay very little for economists to overlook a country’s vulner- attention to a country’s susceptibility to heath ability to infectious disease outbreaks, despite emergencies. Increased government expendi- such assessments frequently recognizing in tures during infectious disease crises, coupled retrospect the damage caused by such events with decrease in revenue (from downturns in (Sands et al 2016). the economy), potentially affects the ability of governments to make interest payments on Several factors may contribute to this ‘blind outstanding debt. Factoring in the overall assess- spot’, including a lack of awareness amongst ment of country’s economic vulnerability and macroeconomists of the scale of infectious dis- policy effectiveness to risk of pandemics (such ease risk, a tendency to focus on near-term risks as indicators of country’s intrinsic vulnerability to of economic stability and a lack of familiarity pandemics, state of preparedness, and compo- with bio-epidemiological inputs that might inform sition of industry sector’s vulnerability to pan- macroeconomic risk models. Another reason demics), the country’s credit rating would more is that pandemics are rare events, making the accurately reflect the true hazard associated with prediction of their occurrence relatively difficult. purchases of a country’s debt. Such an approach Whatever the causes, the absence of infectious has been previously used by UNDP in partner- disease risks in macroeconomic assessments ship with S&P to include Human Development has the effect of depriving this area of the fiscal Index (HDI) in devising sovereign ratings. and policy attention that it warrants. Credit ratings are of critical importance to gov- For governments, and specifically ministries of ernments, as they affect the cost of borrowing in finance, to appropriately prioritize investment the marketplace. The World Bank estimates that in pandemic preparedness, the scale of risk a ratings downgrade to sub-investment grade by associated with infectious disease crises must one major ratings agency increases Treasury bill be made visible and salient. Historically, how- yields by approximately 138 basis points on aver- ever, the risk associated with such outbreaks age (The World Bank 2016). Losing one’s rating has been misperceived and mispriced in both or being downgraded thus has a huge effect national accounts and capital markets, where on the country’s ability to borrow money on the there have been notable market failures in risk markets. Incorporation of economic vulnerability pricing and transfer. Following the outbreak to the risk of pandemics into assessments of of SARS in 2004, for instance, disputes arose credit ratings would incentivize governments to between firms and their insurers as to whether invest in health systems and pandemic pre- the resulting losses were covered by business paredness to boost their credit ratings. Further, continuity policies. Following legal action, most making the economic threat posed by infectious insurers agreed to cover some contingent diseases more visible to policy-makers and the losses; however, many then moved to explicitly private sector will incentivize countries to mobi- exclude losses arising from infectious disease lize the resources to prevent and mitigate such outbreaks from future cover (Reuters 2016). risks. 62  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level BOX 6.1  Sovereign Credit Rating Credit ratings predate Bretton Woods institutions (Bhatia 2002). Perhaps the first instance of independent analysis of credit worthiness was the rating, following the 1907 financial crisis, of railroad bonds by John Moody in 1909. In 1913, the ratings began to use a letter-rating system and expanded to include industrial firms and utilities (Moody’s 2017). Two other indices—predecessors of Standards & Poor’s (S&P), and Fitch—were established in 1916 and 1924 respectively. Today, Moody’s, S&P, and Fitch are known as the “Big Three” and control 95 percent of credit rating business for rating debt instruments (Alessi 2012). Credit Rating Agencies (CRAs) assess the default risk associated with a country’s debt (Kronwald 2009). More specifically, the three main agencies—S&P, Moody’s, and Fitch— determine the extent to which a government will be able to meet its debt payment obligations, and assigns a rating ranging from investment-grade (low-credit risk) to junk-grade (high-credit risk). Since these ratings provide public information and analysis of the risk level associated with country investments, countries are motivated to achieve high investment-grade ratings. Apart from macroeconomic factors, a country’s risk of default is also affected by socio-economic and political events such as war, political chaos, and deliberate decisions to hurt creditors (Moody’s 2008). CRAs vary in the extent to which they measure and incorporate such country-level risk factors into their credit ratings. However, the three main CRAs con- sider political instability, natural catastrophes, security risks and the impact of socio-economic factors in their assessments of a country’s credit-worthiness. For instance, Fitch incorporates the United Nations Human Development Index as well as the World Bank’s Ease of Doing Business survey and Governance Indicators to determine the openness of the business envi- ronment and the condition of the human capital in the countries under consideration. Moody’s also incorporates governance indicators, sovereign country’s debt payment culture, secu- rity risks such as war, and effectiveness and stability of policy making as determinants of its sovereign rating (Tenant 2015). By providing an intuitive, quantitative metric for a of risk, for example, risk to supply chains and complex and multidimensional concept, indices potential for business interruption. Strong can focus public attention, provide policymakers scores may benefit countries via increased with additional tools to prioritize countries investments, lowered cost of borrowing, or that require attention, and identify potential reduced premiums for parametric or other forms weaknesses in underlying infrastructures and of catastrophe insurance, generating additional institutions that would benefit from investment. returns to investment in national and global They can also be used to identify outliers— public health. In summary, an index can assist countries which over-perform (or underperform) both the public and private sectors in identifying relative to national income or other metrics weak points in global preparedness, strengthen of interest—and to prioritize investments and incentives to improve capacity, and help to capacity-building efforts accordingly. Lastly, mitigate the health and economic impacts of indices can inform private sector assessments infectious disease outbreaks. Incentivizing Countries to Prioritize Allocation of Funds to Preparedness 63 The Downside of Indices capacity) relate to the vulnerability of countries to experiencing the emergence and propaga- There are several potential downsides to using tion of a pathogen through their populations. indices to measure preparedness. First, data The third category relates to the vulnerability used for constructing the index may not be reli- of a country’s economy to the shocks to labor able and may be difficult to confirm, especially supply, consumption and trade that occur fol- for developing countries. Second, the index may lowing an outbreak. An effective methodology seem to be very arbitrary to some, especially to for risk assessment should identify and evaluate those countries that are likely to score poorly drivers of risk in each of these components and on them. Third, indices may create short-term combine them into a summative assessment of adverse effects for poorly scoring countries, for overall risk. instance if cross-border investments decline, or companies shift operations and supply chains away from areas of potential risk. These would Intrinsic Risk need to be offset by donor commitment to help poorly scoring countries improve capacity and The first element, intrinsic risk, refers to the risk preparedness. Such a response may occur arising from environmental, demographic and along a longer timescale, be financially inade- sociological factors that predispose a country quate, or not occur at all. Fourth, poorly scoring to the emergence and spread of infectious countries may bring political pressure against diseases. Patterns of environmental risk factors groups preparing such indices, leading to poten- have been previously associated with the emer- tial distortions or inaccuracies in scoring. This gence of novel infectious disease agents in ‘hot risk may be heightened in international orga- spots’ of zoonotic transfer (Jones et al 2008). nizations that lack adequate buffers between Factors such as latitude, wildlife biodiversity, member state boards and operational/analytical co-densification of human and animal popu- functions. And fifth, countries could lose genu- lations because of ecological transition, agri- ine engagement and goodwill if their poor JEE cultural practices and land use changes are all results are used in these indices. Therefore, associated with increased risk of infectious dis- a careful design of the index is essential to eases emerging in human populations (Morse et avoid introducing additional distortions or risks al 2012). Substantial academic and commercial to some economies. In what follows, different efforts have already been put into developing aspects of what could be potentially measured spatial models of emerging infectious disease in an index are discussed. risk, for example, the work funded through USAID’s PREDICT program along with collab- orative efforts between WHO and academic Elements to be Addressed in partners. Such efforts could form the basis of an Assessing Economic Vulnerability to intrinsic risk assessment mechanism for priority diseases and could be extended to provide a Infectious Disease Outbreaks more general assessment of intrinsic risk.14 The factors determining a country’s overall eco- nomic vulnerability to infectious disease crises 14 Currently such models incorporate historical analysis of specific infectious disease outbreaks to identify the factors associated with can be thought of as occurring across three emergence of a specific disease. This understanding is then used distinct domains: intrinsic vulnerability, prepared- to develop models that associate geographic distribution of relevant risk factors (e.g., presence of a suitable vector) with a predicted risk of ness and response capacity, and industry sector emergence in a location. It may be possible to extend this approach to evaluate overall (rather than pathogen-specific risk), such that risk vulnerability. The first two categories (intrinsic assessments reflect better the “unknown unknowns” associated with vulnerability and preparedness and response yet-to-emerge threats. 64  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level In addition to these physical factors, societal Preparedness and Response Capacity and demographic factors also affect intrinsic risk through their effects on human susceptibility Global pandemic preparedness hinges on and disease transmission dynamics. Agricultural, national systems capable of detecting and nutritional and sociological practices can deter- responding in a timely way to novel and emerg- mine the nature and intensity of interactions at ing pathogens and potentially catastrophic the human-animal interface that may predispose outbreaks. The foundational importance of to zoonotic emergence. For example, hunting, national institutions to global public health was butchering and consumption of bush meat and recognized in the 2005 update to the IHR, some livestock farming practices can predispose which identified a set of basic requirements populations to zoonotic infections. Social factors and responsibilities for governments to meet. such as trends in urbanization, migration and Assessing how countries measure up is essen- cultural practices around burial can all alter the tial for planning and investment at both the propensity of infectious disease outbreaks to national and global levels. But such assessments spread through a population. Population health have proven challenging in practice. factors such as the rates of immunocompro- mised, which is secondary to endemic diseases In part, this reflects the complexity of the such as HIV, or adverse health factors such as task. Epidemic and pandemic preparedness malnutrition, can also affect susceptibility to is demanding and requires a wide range of infection, and thus may need to be reflected enabling systems and capabilities. Disease in assessments of intrinsic risk. Finally, popu- surveillance—a bedrock element of prepared- lation behavioral tendencies, relating to trust ness—illustrates the principle. Human and ani- in governmental and public health institutions, mal surveillance is essential to identify outbreak can substantially influence public responses to “sparks”, which are early cases that might cas- infection control measures and public health cade into a broader outbreak. Once an outbreak communications. is underway, surveillance systems are critical to monitor disease transmission, identify hotspots The final component of intrinsic risk is the and allocate public health resources. But sur- underlying strength of local health systems. veillance systems do not function in isolation. Strong health systems can improve the chances They require effective primary health systems of routine pathogen discovery and outbreak to screen and recognize potentially significant suppression as infections may be identified cases. They cannot work amidst violence and in the routine course of health care delivery. insecurity that impede movement and access to Additionally, the effectiveness of all surveillance populations. And without financial resources to strategies is bolstered by adequate laboratory hire staff and fund field operations, they cannot and human resources for health, capable of be sustained. supporting pathogen discovery, case finding, treatment and delivery of vaccination interven- Sectoral and institutional interdependencies are tions. Strong, equitable health systems can also not just a feature of disease surveillance. Other be associated with higher levels of community vital elements of pandemic preparedness sim- engagement and trust in advance of disease ilarly rely on capacities and factors beyond the crises, thus response activities can leverage scope of the health system. During the 2014–15 pre-existing constructive relationships with West African Ebola crisis, outbreak response communities. was constrained by weak infrastructure, which slowed and limited access to rural areas. Health communications aimed at changing behavioral Incentivizing Countries to Prioritize Allocation of Funds to Preparedness 65 practices were rejected by some communities, Europe and North America. However, analysis particularly in areas with weak trust in the state. of the index results also find that GDP and other proxies for national wealth are imperfect pre- These interdependencies receive limited con- dictors of preparedness, with many countries sideration in existing assessment tools, including over-performing relative to national income. the GHSA and JEE, which instead focus detailed attention on the public health system and its The Infectious Disease Vulnerability Index, legal and institutional framework. More holistic designed in 2016 by Rand Corporation, helps frameworks and metrics can help examine the identify countries that are most vulnerable to dis- underlying capacities that support—or con- ease outbreaks (Moore et al 2016). Developed strain—national capacity to detect and mitigate initially as a tool for the U.S. government and public health threats. international agencies, the index uses data from sources such as the World Bank, WHO and oth- Several efforts are underway to develop indexes ers to organize the factors that influence vulner- that capture the preparedness status of coun- ability into seven broad domains: demographic; tries. The Metabiota Preparedness Index, devel- health care; public health; disease dynamics; oped in 2015, measures national capacity to political-domestic; political-international, and; detect and respond to epidemic and pandemic economic. The various indicators developed in outbreaks. The design of the index and selection each domain are weighted and summed into of indicators was informed by a multidisciplinary one composite index. The country scores so team, with expertise in epidemiology, veterinary computed suggest that 22 out of the world’s and clinical medicine, political economy, virol- 25 most vulnerable countries are in the Africa ogy, behavioral health, and other disciplines. region, the other three being Afghanistan, The resulting framework is multidimensional, Yemen and Haiti. Somalia is ranked as the most consisting of five sub-indices measuring factors vulnerable country in the world, followed by the that influence a country’s overall prepared- Central African Republic, both of which play host ness: public health infrastructure, physical and to a dangerous combination of political instabil- communications infrastructure, bureaucratic ity and compromised health systems. and public management capacities, financial resources to underwrite disease response, More recently, the Nuclear Threat Initiative (NTI), and risk communication. The sub-indices are the Center for Health Security at the Johns weighted and combined into a composite score Hopkins Bloomberg School of Public Health, and and rank, measuring the relative capacity of 188 The Economist Intelligence Unit (EIU), are devel- countries. oping a Global Health Security (GHS) Index, which will assess a country’s technical, financial, The resulting distribution provides a picture of economic and political capabilities to prevent, the geography of preparedness for epidemic detect, and rapidly respond to epidemic threats and pandemic outbreaks. It identifies countries with international implications, whether naturally which are unprepared to mitigate and contain occurring, deliberate, or accidental. The GHS a public health threat, as well as regions with Index draws from internationally-accepted tech- weak preparedness where outbreaks are more nical assessments, but also incorporates other likely to sustain and spread across borders. important factors, such as countries’ overall The results of the index show that prepared- health system strength, commitment to global ness is relatively weaker in West and Central norms, socio-economic circumstances, and Africa and areas within Southeast Asia (Exhibit other risk environment factors. The GHS Index 6.1). Preparedness scores are highest among is intended to provide a public benchmarking of wealthy, industrialized countries in Western global health security conditions—building on 66  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level EXHIBIT 6.1  Global Distribution of Pandemic Preparedness (1 = most prepared, 5 = least prepared) Quartile 1 (most prepared) 2 3 4 5 (least prepared) no score IBRD 43418 | DECEMBER 2017 Source: Metabiota the JEE, modelling many of the lessons learned in the case of regional outbreaks, those that rely from NTI’s successful Nuclear Materials Security on globalized supply chains. Empirical study Index, and informed by an international expert of the effects of previous outbreaks on con- advisory group. The GHS Index is also designed sumption combined with structural modelling of to promote dialogue around commitments, national economies can provide insight into the public-private partnerships to assist countries, likely range of industrial and trade effects that and independent monitoring and oversight. The may result from an infectious disease accident. pilot phase of the GHS Index is expected to be Whilst piecemeal analysis of previous outbreaks completed in 2017. has been undertaken by academics, there is a lack of any systematic assessment to inform economic models of structural vulnerability. Economic Vulnerability Arising from Developing such analyses is likely to be within Industrial Structure of National Economies the competencies of the World Bank, regional development banks, the IMF, and (where capac- When infectious disease outbreaks occur, they ity exists), ministries of finance. Indeed, support- can affect economic activity through both labor ing ministries of finance to develop estimates shocks to industrial sectors and through reduc- of sectoral vulnerability, possibly augmented tions in consumption and trade. Outbreaks may with simulation exercises that bring together affect certain industrial sectors more than others, assessments of intrinsic risk and prevention for example those related to travel, tourism and capacity, could be of great value. In doing this, Incentivizing Countries to Prioritize Allocation of Funds to Preparedness 67 the World Bank, regional development banks RECOMMENDATION 10: To reinforce incentives for and the IMF can help build both capacity and national governments to invest in preparedness, awareness of pandemic risk in finance ministries the IMF and World Bank should work to facilitate that may encourage countries to commit to fiscal the incorporation of the economic risks of infec- measures that reduce their macroeconomic tious disease outbreaks into macroeconomic vulnerability to such risk. and market assessments, including: (i) inclusion into Article IV assessments where such risks are macro-critical; (ii) encouraging the development IMF Article IV Staff Reports of academic and private sector indices and maps of intrinsic risk, preparedness and eco- IMF country surveillance under Article IV of the nomic vulnerability. IMF’s Articles of Agreement—often referred to as Article IV consultations—is an ongoing process that culminates in regular (usually annual) com- prehensive consultations with individual member Incorporating Assessment of countries, with discussions in between as need- Pandemic Preparedness in ed. During an Article IV consultation, an IMF team of economists visits a country to assess Country Policy and Institutional economic and financial developments and dis- Assessments cuss the country’s economic and financial poli- cies with government and central bank officials. Countries are likely to pay more attention to IMF staff missions also often meet with parlia- investing in preparedness if it increases access mentarians and representatives of business, to concessional international finance. One way labor unions, and civil society. The team reports of doing so is by introducing an assessment of its findings to IMF management and then pres- preparedness as a criterion in Country Policy ents them for discussion to the Executive Board, and Institutional Assessment (CPIA), a tool that which represents all of the IMF’s member coun- the World Bank uses to determine the allocation tries. A summary of the Board’s views is subse- of IDA resources to countries (Box 6.2). quently transmitted to the country’s government. In this way, the views of the global community The CPIA is carried out over two phases to and the lessons of international experience are address fairness in country comparisons. First, brought to bear on national policies. a benchmarking phase is carried out to select a sample of countries representing each region We believe that Article IV consultations provide which allows for normative adjustment in the an excellent opportunity for the IMF to under- rating scale. The intention is to allow for coun- score the salience of the economic impact of tries to progress with the indicator to a degree pandemics, where such risks have a critical relative to their size or economy. The second bearing on the macro-fiscal health of the stage uses the established benchmarks in com- economy. bination with the 16 criteria to assess country profiles. Each year’s ratings are independent The IMF, however, lacks the expertise to assess of assessment in previous years, and focus on the risks of infectious disease outbreaks and policies and performance over intentions and thus assessments or indexes, as the one dis- promises. Each criterion is rated separately cussed previously in this chapter, will need to on a scale of 1 (lowest) to 6 (highest), and to be taken by an official UN agency (or similar) fully underscore the importance of the CPIA for the IMF to include them in its Article IV in the IDA Performance Based Allocations, consultations. the overall country score is referred to as the 68  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level BOX 6.2  The Performance-Based Allocation System for IDA18 The Country Performance Rating (CPR) of IDA countries is assessed annually using the Country Policy and Institutional Assessment (CPIA) ratings. The CPIA assesses each country’s policy and institutional framework and consists of 16 criteria grouped into four equally weighted clusters: (i) economic management; (ii) structural policies; (iii) policies for social inclusion and equity; and (iv) public sector management and institutions. To ensure that the ratings are consistent with performance within and across regions: (i) detailed questions and definitions are provided to country teams for each of the rating levels for each of the 16 criteria; and (ii) a World Bank-wide process of rating and vetting a dozen “benchmark” countries is carried out to anchor the ratings in all IDA regions. This is followed by a process of institutional review of all country ratings before they are finalized. CPIA Criteria A. Economic Management Monetary and Exchange Rate Policies; Fiscal Policy; Debt Policy and Management B. Structural Policies Trade; Financial Sector; Business Regulatory Environment C. Policies for Social Inclusion Gender Equality; Equity of Public Resource Use; Building Human Resources; Social Protection and Labor; Policies and Institutions for Environmental Sustainability D. Public Sector Management and Institutions Property Rights and Rule-based Governance; Quality of Budgetary and Financial Management; Efficiency of Revenue Mobilization; Quality of Public Administration; Transparency, Accountability and Corruption in the Public Sector In addition to the CPIA, the IDA Portfolio Performance Rating (PPR), which captures the quality of management of IDA’s projects and programs, enters the calculation of the CPR. The CPR in IDA18 will be calculated as: Country Performance Rating = (0.24 × CPIAA-C + 0.68 × CPIAD + 0.08 × PPR) where CPIAA-C is the average of the ratings of CPIA clusters A to C, and CPIAD is the rating of CPIA cluster D. Country performance (with an exponent of 3 in the allocation formula) is the main determinant of IDA country allocations. Country needs are also considered through population size and GNI per capita. Population affects allocations positively (with an exponent of 1) while the level of GNI per capita is negatively related to allocations (with an exponent of –0.125). Source: Draft of IDA18 Deputies’ Report, October 2016. Accessed on June 3rd, 2017 at 18:00 hrs. URL: https://ida.worldbank.org/sites/ default/files/pdfs/ida18-draft-deputies-report.pdf Incentivizing Countries to Prioritize Allocation of Funds to Preparedness 69 IDA Resource Allocation Index (IRAI). A con- Assessment (CPIA) tool and include the rating in sultative process is also carried out before the overall country score used as part of the IDA assessment with IDA-eligible countries. allocation formula. Other multilateral develop- ment banks should consider introducing equiv- Health does not have its own distinctive criteria, alent mechanisms to incentivize investment in but is captured to various degrees in the other preparedness. indicators. Gender equality assesses access to healthcare during delivery, family planning, and In 2013 the World Bank adopted a new World adolescent fertility rate as one-third of the com- Bank Group Strategy focused on aligning all ponent; equity of public resource use contains the institutions work with the twin goals of health as one of many listed public resources; ending extreme poverty and boosting shared building human resources allocates half the prosperity in a sustained manner. Shortly weight to health and includes the most detailed after, the Bank introduced Systematic Country and explicit assessment of health outcomes, Diagnostics (SCD), a diagnostic exercise to especially population and reproductive health, identify key challenges and opportunities for a nutrition and prevention and treatment of com- country to accelerate progress towards devel- municable diseases such as HIV/AIDS, tubercu- opment objectives that are consistent with the losis, and malaria. twin goals. This diagnostic is a reference point for client consultations on priorities for World For all IDA-eligible countries, the World Bank Bank Group country engagement. As of June discloses: (i) the scores for the 16 criteria; (ii) the 30, 2014, the SCD is required prior to sending cluster averages; and (iii) the overall score (IRAI). a Country Partnership Framework (CPF) to the The write-ups that provide the rationale for the World Bank Board for approval and acceptance. ratings, and the sub-ratings that help determine Given the CPF timeframe, the SCD focuses on the scores of some of the criteria are, however, identifying country development priorities for not disclosed. The scores of IBRD countries are the next 4–6 years. not disclosed and are used for Bank’s internal purposes only. The SCD stimulates an open and for- ward-looking dialogue between the World Bank, Introducing an assessment of pandemic pre- client governments, the private sector, and the paredness has two benefits. First, the fact that broader public. Not only does it identify priorities countries are being assessed—and the results through which a country may most effectively disclosed—on pandemic preparedness will raise and sustainably achieve the poverty reduction its visibility, profile and importance. Second, and shared prosperity goals, it also provides countries that do well on this assessment will be a valuable input into the policy debate and able to increase their allocations of concessional discourse within a country for the government’s finance through IDA. The Country Performance own development planning process. In this way, Rating system directs more resources to coun- the SCD both uses and influences the develop- tries that are performing better. During IDA15 ment vision spelled out by the country author- (ending 2011), for instance, IDA countries in ities and stakeholders to support the dialogue the top performance quintile received about on reducing extreme poverty and promoting 2.7 times in allocations per capita than those in shared prosperity in a sustainable manner at the the lowest quintile. country level. RECOMMENDATION 11: The World Bank should The content of the SCD is context specific include assessment of pandemic preparedness for the country; however, all discuss the chal- capacity in the Country Policy and Institutional lenges with respect to achieving the country’s 70  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level development goals, identify the critical factors Moody’s. 2008. Sovereign Bond Ratings, Rating Methodology. driving or constraining economic growth, identify Accessed on November 26th, 2017 at 17:00hrs. URL: the critical factors determining the inclusiveness http://data.cbonds.info/comments/2008/33966/Sovereign_ of growth, analyze the environmental, social Bond_Ratings_(English).pdf and fiscal sustainability of the current pattern of Moody’s. 2017. Moody’s History: A Century of Market growth, distribution and poverty reduction, and Leadership. Accessed on November 26th, 2017 at 17:00hrs. identify and select a set of priorities or focus URL: https://www.moodys.com/Pages/atc001.aspx areas for a country, in order to maximize its Moore M, Gelfeld B, Okunogbe A, Paul, C. 2016. Identifying progress toward achieving the twin goals. When Future Disease Hot Spots: Infectious Disease Vulnerability completed, the SCD feeds into the CPF process, Index. Santa Monica, CA: RAND Corporation. Accessed on which eventually influences the areas for which June 3rd, 2017 at 10:00 hrs. URL: https://www.rand.org/ the country can borrow or get grants from the pubs/research_reports/RR1605.html. World Bank. Morse SS. Mazet JAK. Woolhouse M. Parrish CR. Carroll D. Karesh WB. Zambrana-Torrelio C. Lipkin WI. Daszak, P. Pandemics directly influence economic growth, 2012. Prediction and prevention of the next pandemic poverty reduction, and longer-term sustainabil- zoonosis. Lancet. 2012;380(9857):1956–1965. ity of these trends. Not only does the impact of doi:10.1016/S0140-6736(12) 61684-5. a pandemic represent a significant obstacle to Reuters. 2016. Still Uninsured for your Latin American Event? the sustained reduction of poverty, a country’s Then Expect a Zika Exclusion. Mar 18, 2016. Accessed on pandemic preparedness can have important June 3rd, 2017 at 10:00 hrs. URL: http://www.reuters.com/ future impacts on poverty. Incorporating an article/us-health-zika-insurance-idUSKCN0WK1Q6 assessment of a country’s pandemic prepared- Sands P. El Turabi A. Saynisch PA. Dzau VP. 2016. Assessment ness in the World Bank’s Systematic Country of Economic Vulnerability to Infectious Disease Crises. Diagnostics will emphasize its importance and The Lancet, Volume 388, Issue 10058, 2443–2448, May give the issue greater visibility in the eyes of 2016. Accessed on June 3rd, 2017 at 10:00 hrs. URL: policy makers. Further, it will help countries http://thelancet.com/pdfs/journals/lancet/PIIS0140- make a strong case for concessional World Bank 6736(16)30594-3.pdf financing in support of investments in pandemic United States Department of State. 2016. International Security preparedness. Advisory Board: Report on International Security and Foreign Policy Implications of Overseas Disease Outbreaks. RECOMMENDATION 12: The World Bank should Archived Content. Last Updated May 23rd 2016. Accessed incorporate analysis of pandemic prepared- on June 3rd, 2017 at 10:00 hrs. URL: https://2009-2017. ness in country-specific Systematic Country state.gov/t/avc/isab/258596.htm Diagnostics that identify a set of priorities World Bank. 2015. The Economic Impact of Ebola on Sub- through which a country may most effectively Saharan Africa: Updated Estimates for 2015. January and sustainably achieve the poverty reduction 20, 2015. Accessed on June 3rd, 2017 at 10:00 hrs. URL: and shared prosperity goals. http://www.preventionweb.net/files/42039_wbebola.pdf World Bank. 2016. The Ghost of a Rating Downgrade: What Happens to Borrowing Costs REFERENCES When a Government Loses its Investment Grade Credit Rating. MFM DISCUSSION PAPER NO. 13. June 2016. Accessed Jones KE, Patel NG. Levy MA. Storeygard A. Balk D. Gittleman on June 3rd, 2017 at 10:00 hrs. URL: http://documents. JL. Daszak P. 2008. Global trends in emerging infectious worldbank.org/curated/en/241491467703596379/ diseases. Nature. 2008 Feb 21;451(7181):990–3. pdf/106667-NWP-MFM-Discussion-Paper-13-SARB- doi:10.1038/nature06536. CreditRating-28-Jun-2016-PUBLIC.pdf Incentivizing Countries to Prioritize Allocation of Funds to Preparedness 71 7 CONCLUSION: HEALTH SECURITY IN DOLLARS AND CENTS We know that it is only a matter of time before are better placed than ever to make universal the next pandemic hits us. We also know that health security a reality. there is a good chance that it will be severe. It may mean death on a slow fuse, spreading The time to act is now, not only for national gov- insidiously through populations, unrecognized ernments, but also for the international develop- for years, like HIV in the 1980s. Or it may strike ment partners. Exhibit 7.1 lists a series of actions people down with stark violence and lightning that need to be taken by different stakeholders, speed, plunging national economies abruptly which—collectively and severally—will make the into chaos, like Ebola in West Africa in 2014–15. world a safer place for everybody. Whatever its mode of attack, the next large- scale, lethal pandemic is at most only decades Of course, the money has to be there, too. away. Otherwise, unfortunately, none of the assess- ments and plans will matter. Between achieving Even if we escape the terrifying prospect of a real health security and aspirational rhetoric, lethal pandemic of global scope, the possibil- the difference is dollars. This is the challenge ity that any of the outbreaks or epidemics that the IWG has sought to address with this report. are occurring all the time might become such We are well aware that others have called for a pandemic can still cost many lives and cause better funding of preparedness before with huge disruption to economies and societies. The limited success. Yet we hope that three dif- economic impact of infectious disease out- ferences make this report more likely to have breaks is caused by the contagion of fear. And in success: first, the recommendations are specific our 24-hour media, highly interdependent world, and time bound: second, they are practical and fear spreads extraordinarily rapidly. supported by tools; and third, the recommen- dations include mechanisms to change policy This time, though, the world can be better pre- makers’ incentives. Our report confirms the crit- pared, and communities and economies can be ical importance of pandemic preparedness for better protected. In the wake of Ebola and with countries’ economic future. It sets out a step-by- the introduction of the JEE mechanism and other step plan for countries to secure the financing initiatives, countries and development partners they will need. Our 12 recommendations define are taking steps to improve their readiness to an integrated framework for action by countries counter infectious disease outbreaks. There and development partners, with clear timelines. is much still to do, but given the technical and If countries and the global community adopt analytic tools that are being developed, the the framework, we will see nations at all levels management frameworks, and the collaborative of income progress towards building universal structures to facilitate regional cooperation we health security. Conclusion: Health Security in Dollars and Cents 73 EXHIBIT 7.1  Tackling Pandemic Preparedness—Roles and Responsibilities All countries should: International development partners should: Commit to strengthen universal health Commit to strengthen universal health security security Assess their IHR core capacities and Commit support to finance preparedness performance of veterinary services by activities and catalyze domestic resource conducting JEE and PVS by end 2019 mobilization Develop a prioritized and costed plan Leverage insurance models to support within 9 months of completion of gap response and recovery, including the PEF2 assessment Facilitate incorporation of economic risk Prepare a financing proposal within 3 for infectious disease outbreaks into months of completing a prioritized and macroeconomic and market assessments costed plan Engage and coordinate relevant stakeholders and develop a country- specific investment case World Bank should: Examine ways of generating resources Include preparedness indicators in the CPIA for preparedness from taxes tool & IDA loan allocations Regulate private sector investment in Include preparedness indicators in the preparedness country-specific systemic country diagnostics In a highly mobile, densely interconnected, and monitor that these are delivered. Otherwise we warming world, there are reasons to believe that will continue to see the most vulnerable coun- pandemic threats today are greater than ever. tries being afflicted by outbreaks that cause But so are our knowledge and capabilities for terrible loss of life and knock them off their preparedness and response. Not “pie in the sky,” development trajectories. Otherwise we put the universal health security is now an achievable world at risk of some highly contagious deadly goal. However, goals come at a price. We must influenza or other virus that could kill millions break the cycle of panic and neglect. The sums and wipe trillions from the global economy. We are not large relative to the risks. The returns all have a stake in global security. Investing in on investment are extraordinarily high. We must national preparedness is the most cost-effective secure commitments to sustained financing and way to protect us all. 74  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level APPENDIX A—GUIDANCE FOR PLANNING Following the momentum gained on the JEE assessments in the countries, the WHO has started to work with countries on the creation of National Action Plans (NAPHS). A guid- ance for the completion of NAPHS has been issued (WHO 2017) and is being refined as the planning exercises continue in more countries. This section and the documents linked to it pursue the following objectives: 1. Outline some basic guiding principles for the creation of NAPHS that have been compiled through interviews with several global and regional entities and representatives of the countries 2. Give the countries an example of a planning template and actions suggested to fill gaps identified in the JEE Guiding Principles to Ensure Successful Financing and Execution of the NAPHS ■■ Integrate the plan in existing processes, instead of making it a standalone plan • The national action plan for health security (NAPHS) should include and coordinate relevant existing national plans related to emergencies, such as pandemic preparedness plans, PIP national plans, plans for national disasters, and IHR national plans • Planned activities should be integrated into countries’ existing planning and budgeting processes (e.g., national health plan, security plan, human resources development, etc.) • Action against antimicrobial resistance is part of the NAPHS and as such synergies between both plans should be highlighted ■■ Base the plan on best practices and guidelines, but tailor it to the specific country needs • Activities outlined in the NAPHS should aim at filling the main gaps identified in the diagnostic (including the JEE and PVS assessments), but prioritization should be given to the gaps that represent the biggest vulnerabilities for the country (e.g., there may be a gap in capacities related to radiation risk, but also no radiation sources in the country). Additionally, not all missing capacities necessarily need to be built in the country; in some cases, especially for smaller countries with limited resources, the action could be granting access to capacities present at the regional level or in a partnering country Appendix A—Guidance for Planning 75 • The NAPHS should draw from existing supporting tools (e.g., planning template, costing tools), but it needs to be tailored to the country’s specific needs, peculiarities and costs • Best practices should be shared across countries; this could mean including representatives from countries that already went through the planning process (e.g. Tanzania, Pakistan, Eritrea) in the planning process or partnering countries with similar characteristics ■■ Create the plan with the right stakeholder • Countries are the owners of the NAPHS and all relevant stakeholders/key decision makers from the country leadership should be involved in the planning process (e.g., Ministries of health, agriculture, defense, finance, prime minister office, etc.) • The Ministry of Finance should be involved from the beginning, in order to facilitate integration in the budgeting and planning processes and for cross-sectoral coordination • A few main donors could take part to the planning process in order to clarify high level commitments and coordinate efforts (e.g. avoid duplication of efforts on certain technical areas and gaps in others) ■■ Ensure sufficient detail in costing to enable subsequent domestic budgeting and donor engagement Example of Planning Template The template provided in this footnote15 gives an example of a country planning tool, with suggested actions to fill gaps in each technical area. It has been built based on existing planning guidelines and other examples of tools and strategies. These include the WHO Country Planning Guide and Matrix, WHO Country Planning checklist, CDC Milestones Library, and other relevant global publications. Regional strategies were also considered in the development of the country planning template. This template is designed to also facilitate countries prioritization of their planned activities and link these to costing, thus enhancing country ownership, leadership and accountability. The WHO will continue to review and enhance the template for further alignment with other key critical indicators and areas such as health systems. After piloting, WHO should share the final tool with Member States and partners to support the development of NAPHS. 15 Link to the planning template: http://pubdocs.worldbank.org/en/778091506013556087/example-planning-template-IWG- Report-xlsx.xlsx 76  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level APPENDIX B—INTEGRATION/OVERLAP OF ACTION ON ANTIMICROBIAL RESISTANCE AND HEALTH EMERGENCIES PREPAREDNESS Action on Antimicrobial Resistance (AMR) and Health Emergencies Preparedness Infectious disease emergencies and AMR have mutual influence: infectious diseases preparedness decreases the incidence of infections and therefore pressure for AMR, while decrease of antimicrobial resistance decreases the risk of infectious outbreaks and pro- vides better chances to contain upcoming outbreaks. Some of the activities described in the JEE and national health plans for health security and in the AMR national action plans are therefore partly overlapping and synergistic. These include most prevention and detection activities. Both health emergencies pre- paredness and AMR also require specific activities and capacities (Exhibit B.1). EXHIBIT B.1  Some Dimensions of Health Emergencies Preparedness and Action on AMR are Overlapping at Country Level Health emergencies preparedness Action on AMR • Specific aspects of governance: • Specific aspects of governance: • Legislation & policies • Legislation & policies (e.g., • IHR focal point • Governance: regulation for AB prescription, • Specific aspects of prevention & one health approach quality and use in growth detection, e.g., involving similar promotion, food labelling) • Biosafety & biosecurity stakeholders • AMR coordinator • Real time & syndromic • Most prevention & • Specific aspects of infection surveillance detection activities, e.g., prevention and optimized use of • Surveillance system for • Coordination antimicrobials, e.g., Specific zoonotic diseases • Immunization • Health education to AMR but • Preparedness for response to • Biosecurity • Animal immunization included outbreaks (e.g., EOC set up & • Biosafety • Hospital acquired infections in JEE assessment simulation coordination including • Lab. System • Stewardship activities security, risk comm. ) • Surveillance systems • Change in animal husbandries & • Other specific dimensions: • Trained workforce aquaculture practices • Points of entry • Safe water & • R&D for new therapies and • Chemical events sanitation diagnostics and basic research to • Radiations emergencies improve AMR knowledge1 Adequate budgets for respective activities Infectious disease emergencies and AMR have mutual influence 1 Applies mainly to developed countries. Appendix B—Integration/Overlap of Action on Antimicrobial Resistance and Health Emergencies Preparedness 77 APPENDIX C—REGIONAL LOSS ESTIMATES OF INFECTIOUS DISEASE OUTBREAKS AND AMR Estimates of the projected economic impact of infectious disease crises have helped make the case for global action. Although such estimates have been helpful in focusing the attention of the international community on pandemic risk, the tendency to present figures at a global scale limits the ability of national and regional stakeholders to appreciate the implications of these risks for their local contexts. To support the development of the case for investment at the regional and national level we have prepared preliminary estimates of the expected annual economic loss associated with pandemic disease over the next century.16 Estimation Method We use estimates previously calculated by Fan, Jamison and Summers (2015) of the expected economic losses arising from pandemic influenza as the basis for our estimates. The primary advantage of using these estimates (as compared to others in the literature) is that they include both the direct and mortality-inclusive costs of pandemic outbreaks and thus better capture the totality of economic damage arising from pandemics. Additionally, Fan, Jamison and Summers (2015) not only report estimates of annualized impact of pan- demic influenza at the global level (using 2015 economic and demographic data), but also disaggregate the expected impact by World Bank income group (i.e., low, lower middle, upper middle and high income countries). This disaggregation allows us to estimate country-level losses by assigning these losses to countries in proportion to their share of total GDP within a given income grouping;17 so for example, a low-income country that accounted for 5 percent of the total GDP for low income countries in 2015 would be allocated 5 percent of the expected economic losses. These country level estimates are then aggregated to regional estimates by summing the expected economic losses of all countries making up a defined geographic region. Although we report only point estimates for pandemic economic losses at each level of estimation, it is important to acknowledge the considerable uncertainty inherent in any 16 Expected loss is the average annual economic losses arising from pandemics over an extended period. For example, if estimates suggest that we would typically expect to see 3 pandemics in the next 100 years that between them would cause $60 trillion of economic damage, we would calculate the expected economic loss by dividing the total loss figure by 100 to give us an expected annual loss of $600 billion. 17 All GDP and population data are derived from the World Bank data bank, accessed on June 5th, 2017 at 10:00 hrs. URLs: http://data.worldbank.org/indicator/NY.GDP.MKTP.CD for GDP and http://data.worldbank.org/indicator/SP.POP.TOTL for population. Countries with less than 100,000 population or with 4+ missing years of GDP data are excluded from the following analyses. 78  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level estimation approach. Fan and colleagues attempt to reflect uncertainty around their esti- mates by applying an estimation range of ±40 percent around each point estimate. These estimate ranges do not correspond to estimation intervals as might be classically derived using statistical or econometric methods, but rather represent the authors’ attempts to communicate a reasonable level of uncertainty around their estimates. We do not repro- duce these ranges around the country-level estimates presented here, but we would similarly counsel keeping this fundamental uncertainty in mind. Advantages and Limitations of Estimation Method Although our “top down” approach of interpolating from global estimates is necessarily rough in its approach, it does have the benefit of producing rapid estimates for the vast number of countries where more detailed ‘bottom up’ estimates are not available. The drawback of such an approach however is that it will miss much of the local context that might affect country-level estimates of the economic damage caused by infectious disease outbreaks. As such our figures should not be taken as definitive but in the absence of more detailed local assessments might be considered a reasonable base case. Wherever possible we encourage the development of detailed national and regional esti- mates that take into account relevant local factors in their estimation models, as discussed in the section 6 of the main report. The estimates below are intended to provide a rough sense of the scale of the threat posed by pandemic outbreaks at the regional and national levels and should be thought of as starting points for framing the economic case for invest- ing in preparedness. They are neither intended to be definitive nor should they be used as the basis of comparative risk assessment between countries for the purposes of directing investment or lending. Another important limitation of our approach is that it is based solely on estimates of economic losses expected to arise as a result of pandemic influenza. As such is it does not capture the expected economic impact of other pathogens that have previously caused significant economic damage, such as SARS, MERS, Ebola and Zika. It also does not cap- ture the effect of outbreaks that occur at a smaller scale than full blown pandemics or of the effects of emerging diseases becoming endemic (as happened with HIV). For these reasons, the estimates might be viewed as conservative in their relationship to the true economic costs of infectious disease crises. Clarifying this will be of particular importance when presenting these figures as part of any efforts to develop an economic case for investing in pandemic preparedness. Results We calculate expected economic loss for six distinct geographic regions shown in Exhibit C1 and present these regional estimates in Table C1. We also report national level estimates of expected economic loss in Exhibit C2 and Table C2. Appendix C—Regional Loss Estimates of Infectious Disease Outbreaks and AMR 79 Conclusion Recent estimates of the potentially extreme economic impacts of infectious disease crises have undoubtedly bolstered the case for greater investments in preparedness. However, the consistent focus of these reports on global-level costs may leave policy-makers within national governments without a clear sense of regional or country-specific impacts. Given that these actors ultimately bear the responsibility for addressing these risks, it is import- ant to provide them with the most individually tailored information possible. The work described here should be treated as only a first step in this process, primarily highlighting a need for higher-resolution estimates on the impact of infectious disease crises, rather than settling the issue. REFERENCES Fan VY, Jamison DT, Summers LH. 2015. The Inclusive Cost of Pandemic Influenza Risk. NBER Work Pap Ser. 2015; 22137:24. EXHIBIT C1  Geographic Regions Used in Developing Regional Estimates of Pandemic Losses EUROPE & CENTRAL ASIA NORTH AMERICA MIDDLE EAST & NORTH AFRICA EAST ASIA & PACIFIC SOUTH ASIA LATIN AMERICA & CARIBBEAN SUB-SAHARAN AFRICA IBRD 43419 | DECEMBER 2017 80  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level TABLE C.1  Estimated Regional Vulnerability to Economic Losses from Pandemics Expected annual Expected annual Population 2015 GDP pandemic loss pandemic loss Region (billions) (US$ trillion) (U$ billion) (% GDP) East Asia & Pacific 2.23 21.2 196.9 0.9 Europe & Central Asia 0.89 20.1 110.3 0.5 Latin America & Caribbean 0.63 5.4 59.4 1.1 Middle East & North Africa 0.46 3.1 27.8 0.9 North America 0.36 19.6 86.5 0.4 South Asia 1.74 2.7 53.3 2.0 Sub-Saharan Africa 1.02 1.6 27.9 1.7 EXHIBIT C2  Expected Annual Losses Arising from Pandemics as a Share of National GDP IBRD 43420 | FEBRUARY 2018 Percent GDP Loss 2.0% 1.5% 1.0% 0.5% 0.0% Source: Author’s compilation. Appendix C—Regional Loss Estimates of Infectious Disease Outbreaks and AMR 81 TABLE C.2  Estimated Country Level Vulnerability to Economic Losses from Pandemics Expected annual Expected pandemic annual 2015 Expected annual loss per pandemic Country Region Income group Population 2015 GDP ($) pandemic loss ($) capita ($) loss (% GNI) Afghanistan South Asia Low income 32,526,562 $19,331,286,549 $399,244,953 $12.27 2.06 Albania Europe & Central Asia Upper middle 2,889,167 $11,398,392,444 $128,538,789 $44.49 1.13 income Algeria Middle East & North Upper middle 39,666,519 $165,000,000,000 $1,858,200,019 $46.85 1.13 Africa income Angola Sub-Saharan Africa Upper middle 25,021,974 $103,000,000,000 $1,157,316,729 $46.25 1.12 income Argentina Latin America & Upper middle 43,416,755 $585,000,000,000 $6,593,740,655 $151.87 1.13 Caribbean income Armenia Europe & Central Asia Lower middle 3,017,712 $10,529,182,498 $209,002,797 $69.26 1.99 income Aruba Latin America & High income 103,889 $2,584,463,687 $11,412,415 $109.85 0.44 Caribbean Australia East Asia & Pacific High income 23,781,169 $1,340,000,000,000 $5,913,343,604 $248.66 0.44 Austria Europe & Central Asia High income 8,611,088 $377,000,000,000 $1,664,527,138 $193.30 0.44 Azerbaijan Europe & Central Asia Upper middle 9,651,349 $53,047,140,347 $598,208,493 $61.98 1.13 income Bahamas, The Latin America & High income 388,019 $8,853,519,100 $39,095,166 $100.76 0.44 Caribbean Bahrain Middle East & North High income 1,377,237 $31,125,851,064 $137,444,817 $99.80 0.44 Africa Bangladesh South Asia Lower middle 160,995,642 $195,000,000,000 $3,872,290,808 $24.05 1.99 income Barbados Latin America & High income 284,215 $4,385,250,000 $19,364,286 $68.13 0.44 Caribbean Belarus Europe & Central Asia Upper middle 9,513,000 $54,608,962,635 $615,821,042 $64.73 1.13 income Belgium Europe & Central Asia High income 11,285,721 $455,000,000,000 $2,009,558,289 $178.06 0.44 Belize Latin America & Upper middle 359,287 $1,752,861,128 $19,766,879 $55.02 1.13 Caribbean income Benin Sub-Saharan Africa Low income 10,879,829 $8,290,986,804 $171,231,989 $15.74 2.07 Bhutan South Asia Lower middle 774,830 $2,057,947,621 $40,849,972 $52.72 1.98 income Bolivia Latin America & Lower middle 10,724,705 $32,997,684,515 $654,999,413 $61.07 1.98 Caribbean income Bosnia and Europe & Central Asia Upper middle 3,810,416 $16,191,716,215 $182,592,730 $47.92 1.13 Herzegovina income Botswana Sub-Saharan Africa Upper middle 2,262,485 $14,389,717,321 $162,271,728 $71.72 1.13 income Brazil Latin America & Upper middle 207,847,528 $1,800,000,000,000 $20,339,621,339 $97.86 1.13 Caribbean income Brunei East Asia & Pacific High income 423,188 $12,930,394,938 $57,097,740 $134.92 0.44 Darussalam Bulgaria Europe & Central Asia Upper middle 7,177,991 $50,199,117,547 $566,091,560 $78.86 1.13 income Burkina Faso Sub-Saharan Africa Low income 18,105,570 $10,678,201,939 $220,534,636 $12.18 2.07 Burundi Sub-Saharan Africa Low income 11,178,921 $3,097,324,740 $63,968,390 $5.72 2.06 Cabo Verde Sub-Saharan Africa Lower middle 520,502 $1,603,239,233 $31,824,074 $61.14 1.98 income Cambodia East Asia & Pacific Lower middle 15,577,899 $18,049,954,289 $358,289,063 $23.00 1.99 income 82  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level Expected annual Expected pandemic annual 2015 Expected annual loss per pandemic Country Region Income group Population 2015 GDP ($) pandemic loss ($) capita ($) loss (% GNI) Cameroon Sub-Saharan Africa Lower middle 23,344,179 $28,415,950,981 $564,052,644 $24.16 1.98 income Canada North America High income 35,851,774 $1,550,000,000,000 $6,856,862,675 $191.26 0.44 Central Sub-Saharan Africa Low income 4,900,274 $1,583,776,760 $32,709,405 $6.68 2.07 African Republic Chad Sub-Saharan Africa Low income 14,037,472 $10,888,798,114 $224,884,034 $16.02 2.07 Chile Latin America & High income 17,948,141 $241,000,000,000 $1,063,301,437 $59.24 0.44 Caribbean China East Asia & Pacific Upper middle 1,371,220,000 $11,100,000,000,000 $124,775,764,825 $91.00 1.12 income Colombia Latin America & Upper middle 48,228,704 $292,000,000,000 $3,293,763,535 $68.29 1.13 Caribbean income Comoros Sub-Saharan Africa Low income 788,474 $565,689,764 $11,683,070 $14.82 2.07 Congo, Dem. Sub-Saharan Africa Low income 77,266,814 $35,237,742,278 $727,757,604 $9.42 2.07 Rep. Congo, Rep. Sub-Saharan Africa Lower middle 4,620,330 $8,553,154,506 $169,778,918 $36.75 1.99 income Costa Rica Latin America & Upper middle 4,807,850 $54,136,834,091 $610,496,885 $126.98 1.13 Caribbean income Côte d’Ivoire Sub-Saharan Africa Lower middle 22,701,556 $31,759,248,868 $630,416,639 $27.77 1.99 income Croatia Europe & Central Asia High income 4,224,404 $48,732,003,674 $215,189,661 $50.94 0.44 Cuba Latin America & Upper middle 11,389,562 $87,132,800,000 $982,589,836 $86.27 1.13 Caribbean income Cyprus Europe & Central Asia High income 1,165,300 $19,559,942,331 $86,372,343 $74.12 0.44 Czech Europe & Central Asia High income 10,551,219 $185,000,000,000 $817,607,605 $77.49 0.44 Republic Denmark Europe & Central Asia High income 5,676,002 $301,000,000,000 $1,330,508,935 $234.41 0.44 Djibouti Middle East & North Lower middle 887,861 $1,727,000,000 $34,280,708 $38.61 1.98 Africa income Dominican Latin America & Upper middle 10,528,391 $68,102,618,092 $767,987,949 $72.94 1.13 Republic Caribbean income Ecuador Latin America & Upper middle 16,144,363 $100,000,000,000 $1,129,688,269 $69.97 1.13 Caribbean income Egypt, Arab Middle East & North Lower middle 91,508,084 $331,000,000,000 $6,565,916,788 $71.75 1.98 Rep. Africa income El Salvador Latin America & Lower middle 6,126,583 $25,850,200,000 $513,122,847 $83.75 1.98 Caribbean income Equatorial Sub-Saharan Africa Upper middle 845,060 $12,202,323,684 $137,604,659 $162.83 1.13 Guinea income Eritrea Sub-Saharan Africa Low income 4,789,568 $2,607,739,837 $53,857,097 $11.24 2.06 Estonia Europe & Central Asia High income 1,311,998 $22,459,443,274 $99,175,893 $75.59 0.44 Ethiopia Sub-Saharan Africa Low income 99,390,750 $61,539,711,687 $1,270,966,589 $12.79 2.07 Fiji East Asia & Pacific Upper middle 892,145 $4,425,503,075 $49,906,055 $55.94 1.13 income Finland Europe & Central Asia High income 5,482,013 $232,000,000,000 $1,026,010,200 $187.16 0.44 France Europe & Central Asia High income 66,808,385 $2,420,000,000,000 $10,681,058,025 $159.88 0.44 Gabon Sub-Saharan Africa Upper middle 1,725,292 $14,262,032,471 $160,831,835 $93.22 1.13 income Gambia, The Sub-Saharan Africa Low income 1,990,924 $938,794,719 $19,388,728 $9.74 2.07 Georgia Europe & Central Asia Upper middle 3,679,000 $13,965,385,802 $157,486,574 $42.81 1.13 income Germany Europe & Central Asia High income 81,413,145 $3,360,000,000,000 $14,852,245,132 $182.43 0.44 Appendix C—Regional Loss Estimates of Infectious Disease Outbreaks and AMR 83 Expected annual Expected pandemic annual 2015 Expected annual loss per pandemic Country Region Income group Population 2015 GDP ($) pandemic loss ($) capita ($) loss (% GNI) Ghana Sub-Saharan Africa Lower middle 27,409,893 $37,543,361,204 $745,230,458 $27.19 1.99 income Greece Europe & Central Asia High income 10,823,732 $195,000,000,000 $860,418,563 $79.49 0.44 Grenada Latin America & Upper middle 106,825 $984,074,074 $11,097,327 $103.88 1.13 Caribbean income Guam East Asia & Pacific High income 169,885 $5,734,000,000 $25,320,065 $149.04 0.44 Guatemala Latin America & Lower middle 16,342,897 $63,794,152,886 $1,266,304,993 $77.48 1.98 Caribbean income Guinea Sub-Saharan Africa Low income 12,608,590 $6,699,203,543 $138,357,227 $10.97 2.06 Guinea-Bissau Sub-Saharan Africa Low income 1,844,325 $1,056,776,883 $21,825,388 $11.83 2.06 Guyana Latin America & Upper middle 767,085 $3,166,029,056 $35,703,064 $46.54 1.13 Caribbean income Haiti Latin America & Low income 10,711,067 $8,765,329,890 $181,028,496 $16.90 2.07 Caribbean Honduras Latin America & Lower middle 8,075,060 $20,420,967,149 $405,353,336 $50.20 1.99 Caribbean income Hong Kong East Asia & Pacific High income 7,305,700 $309,000,000,000 $1,365,512,799 $186.91 0.44 SAR, China Hungary Europe & Central Asia High income 9,844,686 $122,000,000,000 $537,466,297 $54.59 0.44 Iceland Europe & Central Asia High income 330,823 $16,779,598,787 $74,094,966 $223.97 0.44 India South Asia Lower middle 1,311,050,527 $2,090,000,000,000 $41,463,181,226 $31.63 1.98 income Indonesia East Asia & Pacific Lower middle 257,563,815 $862,000,000,000 $17,109,269,091 $66.43 1.98 income Iran, Islamic Middle East & North Upper middle 79,109,272 $425,000,000,000 $4,796,368,356 $60.63 1.13 Rep. Africa income Iraq Middle East & North Upper middle 36,423,395 $180,000,000,000 $2,030,624,165 $55.75 1.13 Africa income Ireland Europe & Central Asia High income 4,640,703 $284,000,000,000 $1,252,769,181 $269.95 0.44 Israel Middle East & North High income 8,380,400 $299,000,000,000 $1,322,154,285 $157.77 0.44 Africa Italy Europe & Central Asia High income 60,802,085 $1,820,000,000,000 $8,043,337,795 $132.29 0.44 Jamaica Latin America & Upper middle 2,725,941 $14,262,190,323 $160,833,616 $59.00 1.13 Caribbean income Japan East Asia & Pacific High income 126,958,472 $4,380,000,000,000 $19,354,703,829 $152.45 0.44 Jordan Middle East & North Upper middle 7,594,547 $37,517,410,282 $423,080,930 $55.71 1.13 Africa income Kazakhstan Europe & Central Asia Upper middle 17,544,126 $184,000,000,000 $2,079,329,193 $118.52 1.13 income Kenya Sub-Saharan Africa Lower middle 46,050,302 $63,398,041,540 $1,258,442,239 $27.33 1.99 income Kiribati East Asia & Pacific Lower middle 112,423 $160,121,929 $3,178,398 $28.27 1.98 income Korea, Rep. East Asia & Pacific High income 50,617,045 $1,380,000,000,000 $6,084,366,647 $120.20 0.44 Kuwait Middle East & North High income 3,892,115 $114,000,000,000 $503,579,624 $129.38 0.44 Africa Kyrgyz Europe & Central Asia Lower middle 5,957,000 $6,571,853,849 $130,450,378 $21.90 1.99 Republic income Lao PDR East Asia & Pacific Lower middle 6,802,023 $12,369,080,043 $245,524,505 $36.10 1.99 income Latvia Europe & Central Asia High income 1,978,440 $27,002,832,428 $119,238,486 $60.27 0.44 Lebanon Middle East & North Upper middle 5,850,743 $47,084,703,151 $530,970,550 $90.75 1.13 Africa income Lesotho Sub-Saharan Africa Lower middle 2,135,022 $2,278,037,786 $45,218,731 $21.18 1.99 income Liberia Sub-Saharan Africa Low income 4,503,438 $2,053,000,000 $42,400,173 $9.42 2.07 84  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level Expected annual Expected pandemic annual 2015 Expected annual loss per pandemic Country Region Income group Population 2015 GDP ($) pandemic loss ($) capita ($) loss (% GNI) Libya Middle East & North Upper middle 6,278,438 $34,699,395,524 $391,302,396 $62.32 1.13 Africa income Lithuania Europe & Central Asia High income 2,910,199 $41,400,137,851 $182,813,776 $62.82 0.44 Luxembourg Europe & Central Asia High income 569,676 $56,799,626,262 $250,814,483 $440.28 0.44 Macao SAR, East Asia & Pacific High income 587,606 $46,177,532,874 $203,909,687 $347.02 0.44 China Macedonia, Europe & Central Asia Upper middle 2,078,453 $10,086,021,261 $113,739,280 $54.72 1.13 FYR income Madagascar Sub-Saharan Africa Low income 24,235,390 $9,738,652,322 $201,130,317 $8.30 2.07 Malawi Sub-Saharan Africa Low income 17,215,232 $6,403,820,949 $132,256,753 $7.68 2.06 Malaysia East Asia & Pacific Upper middle 30,331,007 $296,000,000,000 $3,341,160,441 $110.16 1.13 income Maldives South Asia Upper middle 409,163 $3,435,244,659 $38,738,988 $94.68 1.13 income Mali Sub-Saharan Africa Low income 17,599,694 $12,746,688,962 $263,254,659 $14.96 2.07 Malta Middle East & North High income 431,333 $9,746,478,873 $43,038,277 $99.78 0.44 Africa Mauritania Sub-Saharan Africa Lower middle 4,067,564 $5,442,297,174 $108,028,836 $26.56 1.99 income Mauritius Sub-Saharan Africa Upper middle 1,262,605 $11,681,761,261 $131,734,317 $104.34 1.13 income Mexico Latin America & Upper middle 127,017,224 $1,140,000,000,000 $12,898,431,232 $101.55 1.13 Caribbean income Micronesia, East Asia & Pacific Lower middle 104,460 $314,971,100 $6,252,132 $59.85 1.98 Fed. Sts. income Moldova Europe & Central Asia Lower middle 3,554,150 $6,568,288,862 $130,379,613 $36.68 1.98 income Mongolia East Asia & Pacific Lower middle 2,959,134 $11,741,338,841 $233,063,930 $78.76 1.98 income Montenegro Europe & Central Asia Upper middle 622,388 $3,987,061,628 $44,961,785 $72.24 1.13 income Morocco Middle East & North Lower middle 34,377,511 $101,000,000,000 $1,996,756,951 $58.08 1.98 Africa income Mozambique Sub-Saharan Africa Low income 27,977,863 $14,807,075,727 $305,807,389 $10.93 2.07 Myanmar East Asia & Pacific Lower middle 53,897,154 $62,600,906,116 $1,242,619,212 $23.06 1.99 income Namibia Sub-Saharan Africa Upper middle 2,458,830 $11,491,507,356 $129,588,838 $52.70 1.13 income Nepal South Asia Low income 28,513,700 $21,194,888,048 $437,733,519 $15.35 2.07 Netherlands Europe & Central Asia High income 16,936,520 $750,000,000,000 $3,313,086,827 $195.62 0.44 New Zealand East Asia & Pacific High income 4,595,700 $174,000,000,000 $767,258,916 $166.95 0.44 Nicaragua Latin America & Lower middle 6,082,032 $12,692,562,187 $251,945,580 $41.42 1.98 Caribbean income Niger Sub-Saharan Africa Low income 19,899,120 $7,142,951,342 $147,521,856 $7.41 2.06 Nigeria Sub-Saharan Africa Lower middle 182,201,962 $487,000,000,000 $9,662,772,821 $53.03 1.98 income Norway Europe & Central Asia High income 5,195,921 $387,000,000,000 $1,707,042,239 $328.54 0.44 Oman Middle East & North High income 4,490,541 $69,830,949,285 $308,357,899 $68.67 0.44 Africa Pakistan South Asia Lower middle 188,924,874 $271,000,000,000 $5,380,304,509 $28.48 1.99 income Panama Latin America & Upper middle 3,929,141 $52,132,289,747 $587,891,793 $149.62 1.13 Caribbean income Papua New East Asia & Pacific Lower middle 7,619,321 $16,928,680,397 $336,031,933 $44.10 1.98 Guinea income Appendix C—Regional Loss Estimates of Infectious Disease Outbreaks and AMR 85 Expected annual Expected pandemic annual 2015 Expected annual loss per pandemic Country Region Income group Population 2015 GDP ($) pandemic loss ($) capita ($) loss (% GNI) Paraguay Latin America & Upper middle 6,639,123 $27,093,938,619 $305,536,247 $46.02 1.13 Caribbean income Peru Latin America & Upper middle 31,376,670 $189,000,000,000 $2,132,590,098 $67.97 1.13 Caribbean income Philippines East Asia & Pacific Lower middle 100,699,395 $292,000,000,000 $5,805,111,360 $57.65 1.99 income Poland Europe & Central Asia High income 37,999,494 $477,000,000,000 $2,106,617,068 $55.44 0.44 Portugal Europe & Central Asia High income 10,348,648 $199,000,000,000 $879,238,605 $84.96 0.44 Puerto Rico Latin America & High income 3,474,182 $103,000,000,000 $455,421,160 $131.09 0.44 Caribbean Qatar Middle East & North High income 2,235,355 $165,000,000,000 $727,017,940 $325.24 0.44 Africa Romania Europe & Central Asia Upper middle 2,235,355 $178,000,000,000 $2,006,773,474 $897.74 1.13 income Russian Europe & Central Asia Upper middle 144,096,812 $1,370,000,000,000 $15,402,810,189 $106.89 1.12 Federation income Rwanda Sub-Saharan Africa Low income 11,609,666 $8,095,980,014 $167,204,555 $14.40 2.06 Samoa East Asia & Pacific Lower middle 193,228 $761,037,916 $15,106,496 $78.18 1.98 income São Tomé and Sub-Saharan Africa Lower middle 190,344 $317,696,179 $6,306,225 $33.13 1.98 Principe income Saudi Arabia Middle East & North High income 31,540,372 $646,000,000,000 $2,852,600,770 $90.44 0.44 Africa Senegal Sub-Saharan Africa Low income 15,129,273 $13,609,989,582 $281,084,223 $18.58 2.07 Serbia Europe & Central Asia Upper middle 7,098,247 $37,160,332,465 $419,054,191 $59.04 1.13 income Sierra Leone Sub-Saharan Africa Low income 6,453,184 $4,214,779,785 $87,046,951 $13.49 2.07 Singapore East Asia & Pacific High income 5,535,002 $293,000,000,000 $1,292,670,142 $233.54 0.44 Slovak Europe & Central Asia High income 5,424,050 $87,263,622,047 $385,336,695 $71.04 0.44 Republic Slovenia Europe & Central Asia High income 2,063,768 $42,774,769,768 $188,883,844 $91.52 0.44 Solomon East Asia & Pacific Lower middle 583,591 $1,129,164,719 $22,413,761 $38.41 1.99 Islands income Somalia Sub-Saharan Africa Low income 10,787,104 $5,925,000,000 $122,367,766 $11.34 2.06 South Africa Sub-Saharan Africa Upper middle 77,266,814 $315,000,000,000 $3,547,404,077 $45.91 1.13 income South Sudan Sub-Saharan Africa Low income 12,339,812 $9,015,221,096 $186,189,446 $15.09 2.07 Spain Europe & Central Asia High income 46,418,269 $1,190,000,000,000 $5,267,580,377 $113.48 0.44 Sri Lanka South Asia Lower middle 20,966,000 $82,316,172,384 $1,633,964,484 $77.93 1.98 income St. Lucia Latin America & Upper middle 184,999 $1,431,135,704 $16,138,806 $87.24 1.13 Caribbean income St. Vincent Latin America & Upper middle 109,462 $737,683,556 $8,318,800 $76.00 1.13 and the Caribbean income Grenadines Sudan Sub-Saharan Africa Lower middle 40,234,882 $97,156,119,150 $1,928,535,348 $47.93 1.98 income Suriname Latin America & Upper middle 542,975 $5,150,291,217 $58,079,435 $106.97 1.13 Caribbean income Swaziland Sub-Saharan Africa Lower middle 1,286,970 $4,118,488,059 $81,751,411 $63.52 1.98 income Sweden Europe & Central Asia High income 9,798,871 $496,000,000,000 $2,188,874,162 $223.38 0.44 Switzerland Europe & Central Asia High income 8,286,976 $671,000,000,000 $2,962,059,050 $357.44 0.44 Tajikistan Europe & Central Asia Lower middle 8,481,855 $7,853,450,374 $155,889,889 $18.38 1.99 income Tanzania Sub-Saharan Africa Low income 53,470,420 $45,628,247,290 $942,350,496 $17.62 2.06 86  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level Expected annual Expected pandemic annual 2015 Expected annual loss per pandemic Country Region Income group Population 2015 GDP ($) pandemic loss ($) capita ($) loss (% GNI) Thailand East Asia & Pacific Upper middle 67,959,359 $395,000,000,000 $4,456,278,926 $65.57 1.13 income Togo Sub-Saharan Africa Low income 7,304,578 $4,087,903,913 $84,426,611 $11.56 2.07 Tonga East Asia & Pacific Lower middle 106,170 $435,142,409 $8,637,516 $81.36 1.99 income Trinidad and Latin America & High income 1,360,088 $23,559,287,484 $104,032,560 $76.49 0.44 Tobago Caribbean Tunisia Middle East & North Lower middle 11,107,800 $43,015,089,723 $853,843,502 $76.87 1.99 Africa income Turkey Europe & Central Asia Upper middle 78,665,830 $718,000,000,000 $8,095,477,153 $102.91 1.13 income Turkmenistan Europe & Central Asia Upper middle 5,373,502 $35,854,571,429 $404,329,225 $75.25 1.13 income Uganda Sub-Saharan Africa Low income 39,032,383 $27,529,249,701 $568,555,744 $14.57 2.07 Ukraine Europe & Central Asia Lower middle 45,198,200 $90,615,023,324 $1,798,695,512 $39.80 1.99 income United Arab Middle East & North High income 9,156,963 $370,000,000,000 $1,635,144,558 $178.57 0.44 Emirates Africa United Europe & Central Asia High income 65,138,232 $2,860,000,000,000 $12,633,935,401 $193.96 0.44 Kingdom United States North America High income 321,418,820 $18,000,000,000,000 $79,645,603,339 $247.79 0.44 Uruguay Latin America & High income 3,431,555 $53,442,697,569 $235,991,034 $68.77 0.44 Caribbean Uzbekistan Europe & Central Asia Lower middle 31,299,500 $66,732,736,498 $1,324,635,466 $42.32 1.98 income Vanuatu East Asia & Pacific Lower middle 4,422,143 $742,432,131 $14,737,174 $3.33 1.98 income Venezuela, Latin America & Upper middle 31,108,083 $371,000,000,000 $4,187,538,585 $134.61 1.13 RB Caribbean income Vietnam East Asia & Pacific Lower middle 91,703,800 $194,000,000,000 $3,842,913,015 $41.91 1.98 income Virgin Islands Latin America & High income 103,574 $3,765,000,000 $16,625,400 $160.52 0.44 (U.S.) Caribbean Yemen, Rep. Middle East & North Lower middle 77,266,814 $37,733,919,936 $749,013,022 $9.69 1.98 Africa income Zambia Sub-Saharan Africa Lower middle 16,211,767 $21,154,394,546 $419,911,767 $25.90 1.98 income Zimbabwe Sub-Saharan Africa Low income 15,602,751 $14,419,185,900 $297,796,382 $19.09 2.07 Appendix C—Regional Loss Estimates of Infectious Disease Outbreaks and AMR 87 APPENDIX D—CHANGE MANAGEMENT AND INVESTMENT CASE How to Use this Document Target audience Country-level preparedness advocates (e.g., Ministry of Health, Ministry of Agriculture, representatives of public health NGOs) who are trying to motivate key stakeholders to allocate resources to planning, costing and financing preparedness activities Purpose Provide preparedness advocates with an overview of formal and non-formal activities that can support preparedness action Provide preparedness advocates with a tactical tool to develop the investment case for preparedness in their specific countries When it should be used As a thought-starter to how to catalyze a domestic critical mass to preparedness action Prior to any discussions or advocacy opportunities to create buy-in with key stakeholders During the communication and/or change management planning processes happening during the process of creating and implementing the National Action Plans for Health Security (NAPHS) 88  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level Executive Summary Stakeholders in development projects often only look at the formal mechanisms that enable project implementation (e.g., financing plans, processes, tracking & monitoring systems). Yet experience suggests these alone are not enough. To catalyze the commitment of resources to deliver an infectious disease preparedness plan, its proponents in each country need broad political and social support. In order to overcome the significant barriers to financing preparedness, countries will require change leaders, champions who can shepherd the planning and financing process through the intricate and complex world of priority-setting and decision-making in governments by implementing change management actions that include 4 main elements: Championship & sponsorship: the identification and enablement of leaders to drive the process of improving preparedness capabilities Expertise & capabilities: the development of technical expertise and management capabilities to e ectively implement prioritized preparedness activities Formal mechanisms: infrastructure and processes in place to manage the implementation of preparedness activities “Burning platform” and the investment case: the establishment of preparedness as a critically-important initiative and the arguments (investment case) for it that can influence key stakeholders 1. Section 1 of this document gives an overview of the overall change management activities that will facilitate preparedness in implementing countries 2. Section 2 of this document includes a deep dive on how to build a burning platform for preparedness activity by developing the investment case for preparedness. This sections includes the following sub-sections: a. Overview of the 3 step process to develop an investment case, which includes: (i) identification of the change leader; (ii) identification of all stakeholders and analysis of their motivations; and (iii) articulation of the essential arguments for prioritizing investments in preparedness in ways that are relevant to the motivations of di erent stakeholders. b. Detailed argument library that can be used to form the building blocks for investment cases c. Examples of investment cases Contents of this Document – Overview 1 Change management summary 2 Guidance on how to build an investment case a Overview b Argument library c Examples of investment cases Appendix D—Change Management and Investment Case 89 Content of this Document – Detail by Section Section What this includes How this can help Change Overview of the building blocks Provides an overview of the management of an e ective change necessary pieces to overcome Change summary management plan barriers to preparedness 1 manage- financing and implementation Specific suggestions of change ment management actions, including sequencing and ownership a Overview Proposed steps to create an Clarifies steps to build the case investment case and provides list of the likely Likely audiences of an audiences who will need to be investment case addressed Overview of 4 main arguments that can be used as components of an investment case How to b Argument library Detail of supporting arguments Provides a ‘library’ of build an 2 for preparedness that can be arguments for financing invest- ment case used for preparedness, along preparedness that can be with fortifying examples adopted for di erent audiences once adapted to the specific country context c Example Example investment case from a Could inspire the people who investment West African country will have to build a case for cases Example investment case from a their own country with some South-East Asian country practical narrative examples Contents of this Document – Overview 1 Change management summary 2 Guidance on how to build an investment case a Overview b Argument library c Examples of investment cases 90  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level CHANGE MANAGEMENT SUMMARY To ensure e ective implementation, the critical change management levers can be applied to the assessment, planning and implementation process Phase 2: Phase 4: Budgeting Phase 1: Strategy Phase 3: and implementation Diagnostic and action Costing Formal mechanisms (incl. expenditures) planning (processes, tools, systems) – including financial incentives – are key to supporting implementation at country Critical change management levers level In addition, other important elements of change Championship “Burning platform” management need to be in and sponsorship and investment case place, such as: – Championship & sponsorship by key influencers – The right expertise and capabilities – The “burning platform” and investment case for Expertise and Formal preparedness capabilities mechanisms CHANGE MANAGEMENT SUMMARY Overview of Key Roles Role Description The primary champion who leads the change management process and shepherds it Change leader through the complex world of priority-setting and decision-making in government The group managed by the change leader that serves as a steering entity Monitoring committee Could include senior representatives of all sectors involved as well as the main donors and regional/global entities The person responsible for the logistics, planning and activities related to the change Project Manager management plan (e.g., ensuring regular engagement of key stakeholders, scheduling monitoring committee meetings, managing government approval processes) Local members of international institutions who may be able to provide technical International public project expertise, process and planning input (e.g., members of WHO, World Bank, health community Gates Foundation, Red Cross, CDC etc.) Individuals selected during the planning process to own the planning and execution of Preparedness agreed upon preparedness activities (e.g., Ministry of Agriculture ownership of the activity owners strengthening of zoonotic disease surveillance) May include members from the public, private or social sectors Key government decision-makers, including members of the legislative and executive Country leadership branches Representatives from key industries that could contribute to preparedness activities or Private sector could push the Government to implement preparedness as they would be heavily impacted by an infectious disease outbreak Regional and domestic groups of experts with capabilities and skills important for Technical groups preparedness activity execution (e.g., Africa CDC, SE Asia Field Epidemiology and Technology Network) Appendix D—Change Management and Investment Case 91 CHANGE MANAGEMENT SUMMARY Levers to Drive Change at the Country Level Ensure buy-in of country Define and share the specific vision for the country & high leadership; involvement of level strategic objectives top leadership and key Create the “burning platform” ministries will cascade – Preparedness is a clear priority for the country, the urgency across the agenda is regularly discussed and communicated from Championship “Burning country ecosystem and platform” and global public health institutions and donors to the Engage top influencers sponsorship investment case country leadership across sectors (e.g., – an investment case is defined - highlighting the NGOs, media, political & urgency and relevance of the topic– and widely business leaders, etc.) communicated to local public, private and civil society based on a coordinated comms plan Identify & mobilize people Integrate the preparedness process in the existing core with the right expertise to processes drive the implementation – Preparedness capacity development as part of the process Expertise and Formal national health sector plan Create attractive career capabilities mechanisms – Preparedness costing and financing process paths (e.g., international integrated in the country planning and financing trainings and exposure) for regular process experts working on Put in place tracking & monitoring processes preparedness-related Create a governance structure and assign activities accountabilities Potentially develop skills – A governing body is in place to manage plan missing implementation – Specific responsibilities and accountabilities for each activity in the plan – Separate monitoring body regularly evaluates and reports back on plan e ectiveness Across all levers, adopt a multi-stakeholders approach Inclusive mechanisms in place for involvement of public, private sector and civil society Multi-sectoral coordination (human health, animal health, food and agriculture, defense, finance, transport…) Partnership-based plan Coordination with neighboring countries CHANGE MANAGEMENT SUMMARY High Level Change Management Process at Country Level ILLUSTRATIVE Phase 1: Phase 2: Strategy & Phase 3: Phase 4: Diagnostic action planning Costing Budgeting & implementation Creation of action plan Creation of costed plan Budgeting & financing (incl. advocacy) Implementation Overall Post-JEE planning Costing workshop Launch of Tracking & monitoring workshop the plan Assign accountability to each intervention Design governance structure for coordination of implementation & appoint monitoring committee/body Formal Integrate action plan activities into regular mechanisms plans (e.g., national health sector plan) Design tracking & Integrate costing in next monitoring process review of country budgeting Identify sponsor Engage country leadership Championship among political and sponsorship leadership Map key influencers Engage identified influencers and make them across sectors “champion” the theme Create “vision” “Burning Define the “investment case” platform” and investment case Develop comms plan & advocacy plan Create stakeholder map Regularly engage with key stakeholders Identify key people needed to drive the process & potential need for specific training Expertise and Design attractive path for people involved capabilities Ad hoc support on Preparedness trainings for appointed people specific activities 92  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level CHANGE MANAGEMENT SUMMARY High Level Change Management Process at Country Level Activity What Who When Assign accountability to each Each intervention/action outlined in the action plan should have a person accountable for its Change leader Phase 2 intervention implementation; additionally, it should be specified which other stakeholders (across sectors) need Multi-sector to be involved or contribute (e.g., Ministry of Health will own biolab capacity-building, Ministry of stakeholders Agriculture will own zoonotic surveillance capacity) Ideally all accountabilities and responsibilities are defined already in the planning phase Design governance structure for Given the multi-sectoral nature of the plan and the fragmented accountabilities across several Change leader Phase 3 coordination of implementation actors, a project manager should be appointed to track and regularly follow-up on the Project Manager & appoint monitoring implementation of the plan and to coordinate actions across sectors; ideally, the project manager Monitoring committee/body works closely with the change leader (e.g. if change leader is the MoH, the project manager should committee be appointed in the MoH’s team) Regular follow-ups and working/ coordination meetings among the main actors have to be planned An appointed monitoring committee/body would serve as steering entity and could include senior Formal representatives of all sectors involved and potentially the main donors and regional/global entities mechanisms Design tracking & monitoring The implementation of activities against the initial plan should be regularly tracked and monitored: Change leader Phase 3 process this will be done by the project manager and through the monitoring committee Project Manager Ideally, milestones and indicators should be defined and agreed already during the planning phase: this would allow clarity on the indicators measured and potentially simplify the reporting requirements of donors (e.g., HSFAT) Integrate action plan activities Once the preparedness activities are defined in the plan and each of them has a responsible Preparedness Phase 4 into regular plans (e.g., national person, this person should make sure that activities are integrated into regular plans (e.g., national activity owners health sector plan) health sector plan, defense, agriculture, etc.) Project Manager Integrate costing in next review Costs that are determined to be funded through domestic funds should be included in the next Relevant country Phase 4 of country budgeting review of the country budgeting, following the inclusion in each of the di erent plans (as per budgetary previous point) agencies/ entities Identify change leader among The change leader’s role is to promote the topic of preparedness, drive the engagement of International Phase 1 political leadership political leadership and other stakeholders and advocate in the legislature to get dedicated public health funding community and Ideally, the change leader is a member of the top leadership in the country (e.g. in the MoF, prime preparedness Minister O ce or MoH) who is invested in GPH, has credibility within the political landscape and is advocates in capable of convening major stakeholders to be involved country Map key influencers across Key influencers may be found across di erent sectors (political leadership, private sector, civil Change leader Starts in Phase 1 Champion- sectors society, partners, both national and international entities); although sometimes these people do not and continues until ship and have a formal role in the preparedness agenda, they are key to influence key stakeholders Phase 2 sponsorship Engage country leadership The change leader plays a key role in engaging the rest of the country leadership and identifying Change leader Starts in Phase 1 potential champions amongst them of the preparedness activities (Heads of government and continues until ministries, Prime Ministers) Phase 3 Engage identified influencers The change leader can start engaging the key influencers and stakeholders, to make them further Change leader Starts in Phase 2 and make them “champion” the champion the agenda (e.g., parliamentarians, project leaders with high reach) and continues until theme Phase 4 CHANGE MANAGEMENT SUMMARY High Level Change Management Process at Country Level (Cont’d) Activity What Who When Create stakeholder map A stakeholder map includes a list of all key stakeholders for preparedness planning & Change leader Starts in Phase 1 execution, that could include: Minister of Finance, Parliament, the Executive, Ministry of Health, and continues until other relevant Ministries, private sector, donors and international partners Phase 2 For each stakeholder, it should be clarified: role in the preparedness planning & execution, main motivations and concerns, objectives of the communication Create “vision” While the action plan outlines the interventions needed to fill identified gaps in the core Change leader and Starts in Phase 1 capacities, leadership in the country should define an overall vision for the evolution of the country leadership and continues until core capacities for preparedness in the country Phase 2 “Burning platform” and investment Regularly engage key Champions should check-in with stakeholders identified in the stakeholder map in order to Change leader and Starts in Phase 1 case stakeholders ensure their continued support and stay abreast of stakeholder progress preparedness and continues until champions Phase 4 Define the investment case an investment case is needed for the change leader and champions of the preparedness Sponsor and Starts in Phase 2 agenda to create buy-in and align the di erent stakeholders preparedness and continues until an investment case should include elements such as champions Phase 3 – Why preparedness is important (including the economic case) – What is the vision for the future Specific focus of preparedness plan in the medium term (key areas of development) Identify key people needed to Driving the implementation of the preparedness plan requires specific capacities; key people Change leader and Starts in Phase 1 drive the process & potential can be identified among the existing teams (e.g., in the di erent departments/ ministries and preparedness and continues until need for specific training entities involved). In some cases – for example in small countries or countries that have bog champions Phase 2 gaps in their core capacities – expertise can be built with the support of partners or Private sector international entities (e.g., through provision of trainings, temporary secondments) Design attractive path for people The ability to involve people with the right expertise and capabilities also depends on the Change leader Starts in Phase 1 involved attractiveness of the career path linked to a specific program: for example, there could be the Country leadership and continues until possibility to give more international exposure to people driving the implementation of the Regional/global entities Phase 2 Expertise and plan, provide specific trainings/certifications, improve pay for infectious disease experts, with experience in capabilities increase recognition of infectious disease experts) other countries Technical groups Trainings for appointed people Trainings could be provided by regional/global entities that already have experience from Private sector Starts in Phase 3 and ad hoc support on specific implementation in other countries Regional/ global and continues until activities Ad hoc support may include rotations across partner countries, secondments of consultants for entities Phase 4 a certain period of time Technical groups Other countries Appendix D—Change Management and Investment Case 93 Contents of this Document – Overview 1 Change management summary 2 Guidance on how to build an investment case a Overview b Argument library c Examples of investment cases GUIDANCE ON HOW TO BUILD AN INVESTMENT CASE - OVERVIEW Through a 3-step process, preparedness champions can create a country-level investment case The investment case should be used by the “change leader” (e.g., o cial in the Prime Minister’s o ce, MoH) and by the “champions” (i.e., influencing people in the political, civil society and business Identify environment that support and sponsor the execution of the preparedness plan) change leader, champions and Audiences of the investment case need to be clearly defined; these are the key stakeholders for stakeholder preparedness planning & execution, that could include: Minister of Finance, Parliament, the group Executive, Ministry of Health, other relevant Ministries or private sector For each stakeholder, the role in the planning/budgetary and execution process needs to be clarified Champions should aim to understand what are the most relevant topics for their stakeholders, and what motivation will drive them to include preparedness in their country plans and execute upon them. Potential factors to be considered: Analyze the – Objectives and motivation (e.g., economic growth of the country, improving health security) stakeholder – Historical and macroeconomic context of the country (e.g., recent public health incidents in the motivations country / region, security concerns related to recent conflicts or threats of conflict, dependency of the economy on a specific industry) – Personal position and objectives (e.g., political a liation and influence, direct accountability) The investment case should consist of 4 elements and focus on what really matters to the audience: – Why preparedness is important: Maintaining economic stability and growth (prevention of economic losses from outbreaks) Extension of health systems strengthening activities Develop the Enhancement of health security and protection of social stability investment case Externalities to global community and donor support – Vision for the future – Specific focus of preparedness plan in the medium term (key areas of development) 94  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level GUIDANCE ON HOW TO BUILD AN INVESTMENT CASE - OVERVIEW Change leaders of preparedness activity will typically develop investment cases for one of the following audiences Audience Role in national budgeting process The Ministry of Finance is usually responsible for decisions on the national budget (e.g., Ministry of Finance prioritization of activities to be funded, financing instruments to fund national activities), economic policy and financial regulation Parliament is the governing body electing by citizens that is responsible for policy decisions Parliament and usually, to some degree, the national budget The executive is the person or entity of a country that has supreme managerial responsibility (e.g., the President, Prime Minister, Monarch) The Executive The degree of power and budgetary control that the executive holds varies widely depending on the type of political system a country holds The Ministry of Health is the division of a country’s government that is responsible for health policy and in most cases, execution of healthcare activity Ministry of Health If the Ministry of Health is not already the leader or a champion of preparedness execution, their support will be critical to gain influence in the budgetary process Other relevant Several other Ministries may have additional activities to be included in their budget Ministries (e.g., Agriculture, Interior/Defense) The private sector can serve as funding partners for preparedness activities or influence Private sector partners to motivate the government to implement preparedness activities Bilateral and Donors may provide technical or financial assistance for execution multilateral donors Neighboring Neighboring countries may provide technical assistance or financial collaboration that can countries reduce the amount for preparedness activities to be included in the national budget Regional Coalitions and institutions with resources, technical capacity or convening power that can organizations benefit preparedness activity execution in individual countries (e.g., Africa CDC) GUIDANCE ON HOW TO BUILD AN INVESTMENT CASE - OVERVIEW We have identified 4 key potential motivations of stakeholders … Managing Ensuring economic Improving security Strengthening the externalities to stability and growth and protecting social health system regional and global of the country stability community Nation’s economic Preparedness A nation’s security Preparedness is a and financial stability activities directly can be threatened by major public health and growth could be improve a country’s Loss of health and topic among global a ected by: capabilities in the deaths caused by institutions and The potential event of a pandemic, the spread of donors, given the financial and at the same time infectious diseases high externalities productivity losses improving a country’s Bioterrorism or of the level of resulting from an health system as a other malicious preparedness of each outbreak whole induction of a country The lack of human pandemic International funding confidence from (grants and loans) is investors in a Social stability can be likely to be mobilized country’s stability disrupted by for financing and security pandemics preparedness In addition, each audience will likely be a ected by personal position and objectives (e.g., political a liation and influence, direct accountability, need to prove value in the short term during the time of the political mandate) Appendix D—Change Management and Investment Case 95 GUIDANCE ON HOW TO BUILD AN INVESTMENT CASE - OVERVIEW … although the 4 motivations are expected to have a di erent ILLUSTRATIVE relevance for the di erent audiences Low relevance Some relevance Highly relevant Audience concern Ensuring economic Improving security and Managing exter-nalities Strengthening the stability and growth of protecting social to regional and global health system the country stability community Audience Ministry of Finance Parliament The Executive Ministry of Health Other relevant ministries Private sector Bilateral & multilateral donors Neighboring countries Regional organizations In building the narrative, one should also take into account the historical and macroeconomic context of the country (e.g., recent public health incidents in the country / region, security concerns related to recent conflicts or threats of conflict, dependency of the economy on a specific industry, past relationship with international donor agencies) Contents of this Document – Overview 1 Change management summary 2 Guidance on how to build an investment case a Overview b Argument library c Examples of investment cases 96  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level GUIDANCE ON HOW TO BUILD AN INVESTMENT CASE – ARGUMENT LIBRARY We have developed an argument library based on the 4 key motivations of stakeholders i ii iii iv Managing Improving security and Ensuring economic stability and Strengthening the health externalities to protecting social growth of the country system regional and global stability community Preparedness activity requires Strengthening preparedness Bioterrorism threat: the After the Ebola a relatively small annual spending against disease outbreaks same activities that crisis in 2014–15, the to prevent or limit extremely high protects the population and improve pandemic world has realized future losses, resulting from: contributes to universal preparedness can that preparedness – Reduced productivity from health coverage protect against the risk is key to global infected groups and slow-down Pandemic preparedness to bio-security health security of economic activity enables improved prevention, Preparedness activities International – Direct costs of response detection and response to can reduce the funders are willing activities regularly occurring potential loss of key to support The economic cost of outbreaks epidemics, specifically in security personnel and/ investments in can be disproportionately large certain geographical areas or disruption of public health and with respect to the severity of the (e.g., Meningitis, yellow fever, capacity to perform may give outbreak if the threat triggers panic cholera…) security activities preferential lending reactions (e.g., limits the circulation Preparedness activities Preparedness activities terms and of goods and people, absenteeism) enable earlier detection and can reduce social increased funding faster response to outbreaks: disruption that results to countries that In addition, even in “non-crises this has proven to be effective from infectious disease prioritize times”, foreign direct investments in reducing the spread of outbreak, thereby preparedness in certain sectors (e.g., tourism) may be discouraged by a perceived infectious diseases protecting social higher risk of epidemic (changing the “shape of the stability curve” of infected people) GUIDANCE ON HOW TO BUILD AN INVESTMENT CASE – ARGUMENT LIBRARY Case examples in i Ensuring Economic Stability and Growth of the Country Appendix Arguments for preparedness investment to reduce economic losses Argument Detail Examples to support argument Large epidemics cause extremely The Ebola epidemic in West Africa resulted in high economic costs: significant economic costs: – From reduced productivity and – In 2015, Guinea, Liberia and Sierra Leone loss an slow-down of the economy, estimated $2.2 billion in GDP; this doesn’t count mainly borne by the countries the medium-term e ect on the countries’ Relatively directly a ected by the outbreak economy (e.g., Sierra Leone estimated to have small – From direct costs for response, lost 50% of its work force in the private sector)1 annual borne by both a ected countries – By the end of 2015, $3.6 billion was spent to spending to and the international community fight the Ebola epidemic in West Africa2 prevent or limit Costs from large epidemics (both Other West African countries that experienced Ebola extremely direct and indirect) are lower in cases during the 2014–2015 outbreak—such as countries that are better prepared Nigeria—were able to contain the virus and had high future losses Estimates suggest that the annual much more limited economic consequences cost of preparedness would be In its 5-year national action plan for 2017–2021, around $4.5 billion, less than $1 per Tanzania estimated its average preparedness needs person to cost ~$27 million/year (~$.50 per person/ year) 1 "Cost of Ebola epidemic", CDC 2016 2 IBID Appendix D—Change Management and Investment Case 97 GUIDANCE ON HOW TO BUILD AN INVESTMENT CASE – ARGUMENT LIBRARY Case examples in i Ensuring Economic Stability and Growth of the Country Appendix (Cont’d) Arguments for preparedness investment to reduce economic losses Argument Detail Examples to support argument The economic cost of outbreaks can The Asian economy is estimated to have lost Economic be disproportionately large compared $60 billion as a result of the SARS epidemic, cost of to the severity of the outbreak (e.g. which was mainly driven by losses from tourism outbreaks can measured by the number of people and consumer confidence rather than direct costs be dispropor- infected, mortality) if the threat triggers from the outbreak1 tionately panic reactions, (e.g., limits to the large to The West African Ebola epidemic resulted in >33 circulation of goods and people, weeks of education lost due to school closures2 severity of absenteeism) outbreaks Even in “non-crises time”, foreign Travel & tourism can represent a very relevant direct investments may be sector in some developing countries (e.g., it discouraged by a perceived higher risk generated >12% of Kenya’s GDP in 2014)3 Even in “non- of epidemic; this is expected to be A 2004 study of 74 countries found that FDI crises times”, driven by consumer confidence (for inflows are positively correlated with population FDI may be sectors such as tourism), but also by health in low- to middle-income countries4 discouraged perceived risk for the business of any company setting up operations in the country (similarly to the consideration of risk of natural disasters) 1 “Assessing the Economic Impact and Costs of Flu Pandemics Originating in Asia,” Oxford Economic Forecasting Group, 2005 2 “Cost of the Ebola epidemic,” CDC, 2016 3 “Kenya benchmarking report,” World Travel & Tourism Council, 2015 4 “Population Health and Foreign Direct Investment: Does Poor Health Signal Poor Government E ectiveness?,” Asian Development Bank, 2005 GUIDANCE ON HOW TO BUILD AN INVESTMENT CASE – ARGUMENT LIBRARY ii Strengthening the Health System Arguments for preparedness investment to reduce economic losses Argument Detail Examples to support argument Few preparedness activities are specific to the Tanzania’s recently-produced pandemic preparedness Protection of the prevention, detection and response of pandemics; plan calls for improvements in food & water population and most activities will—to some extent—enhance contamination control, safe waste management and contribution to existing health system strengthening activities (e.g. workforce training for health workers (e.g., UHC surveillance, labs, HCWs trainings) epidemiologists, lab, risk comms) Pandemic preparedness activity enables Outbreaks of infectious diseases such as cholera, implementing countries to respond more quickly meningitis, yellow fever, MERS CoV and others happen and e ectively to regularly occurring epidemics, every year, particularly in vulnerable countries: their Improved which can reduce the human and economic impact e ect can be limited through prevention and early prevention, of these outbreaks detection and response that are enabled by better detection and preparedness response to regularly occurring A high number of people is still infected by largely domestic, recurring infectious diseases: for example, in pandemics 2016 Tanzania experienced a cholera outbreak (>24,000 cases)1 and Angola su ered from a big yellow fever outbreak Preparedness activities enable earlier detection A recent study shows that in response to meningitis and faster response to outbreaks; this has proven outbreaks, a shorter response time (4 weeks instead of Reduction in the to be e ective in reducing the spread of infectious 6 weeks to reach desired coverage) could increase the spread of diseases (changing the “shape of the curve” of number of averted cases by 218%2 infectious diseases infected people) The 2015 MERS outbreak in South Korea resulted in 186 once an outbreaks cases and 38 deaths from the infection, while starts neighboring Thailand, which was able to catch the presence of the disease early with its surveillance infrastructure, only saw 3 cases3 1 “Cholera—United Republic of Tanzania,” WHO, 2016 2 Response thresholds for epidemic meningitis in sub-Saharan Africa following the introduction of MenAfriVac® Vaccine, Volume 33, Issue 46, Pages 6212–6217 (2015) 3 “Costly Lessons From the 2015 Middle East Respiratory Syndrome Coronavirus Outbreak in Korea,” PMC, 2015; “MERS-CoV- Thailand, WHO, 2016; “Nuclear, Biological, and Chemical Weapons and Missiles: Status and Trends,” CRS Report for Congress, 2008 98  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level GUIDANCE ON HOW TO BUILD AN INVESTMENT CASE – ARGUMENT LIBRARY iii Improving Security and Protecting Social Stability Arguments for preparedness investment to improve health security Argument Detail Examples to support argument The same activities that would The US Department of Defense has funded CDC bio surveillance Protection improve pandemic activities in acknowledgement of the public health institution’s role against the risk preparedness could improve in bioterrorism preparedness to biosecurity bio-security by limiting the 16 countries have had or are currently suspecting of having biological threat of bioterrorism weapons1 which could be used in the event of a conflict Health emergencies may Militaries frequently experience infectious disease outbreaks; recent significantly hinder the capacity infectious disease outbreaks during military deployments include: Minimization of of a nation to perform its – Nipah virus infected Malaysian military personnel during their disruption of security activities, e.g., due to deployment to respond to the infectious disease infection of capacity to the loss of key personnel pig farmers3 perform security activities – Average 21% Hepatitis E infection rate in Thai peacekeeping troops deployed in East Timor, Afghanistan and Iraq between 1999 and 20062 Preparedness activities can The Ebola epidemic had a negative social impact on the lives of reduce social disruption that children in Sierra Leone, Guinea and Liberia: results from infectious disease – >33 weeks of education were lost due to school closures Protect social outbreak, thereby protecting stability – 17,300 children lost one or both parents to Ebola social stability – There was a 30% decline in childhood vaccination coverage during as a result of the outbreak4 1 “The biological threat,” Nuclear Initiative, December 30, 2015 2 “Hepatitis E Virus Infection in Thai Troops Deployed with U.N. Peacekeeping Forces,” Military Medicine 2007 3 “Nipah Virus Infection Among Military Personnel Involved in Pig Culling during an Outbreak of Encephalitis in Malaysia, 1998–1999,” Emerging Infectious Disease, 2001 https://wwwnc.cdc.gov/eid/article/7/4/01-7433_article 4 “Cost of the Ebola epidemic,” CDC, 2016 GUIDANCE ON HOW TO BUILD AN INVESTMENT CASE – ARGUMENT LIBRARY iv Managing Externalities to Regional and Global Community Arguments for preparedness investment to manage externalities to regional and global community Argument Detail Examples to support argument After the Ebola crisis The 2016 G7 Ise-Shima Leaders’ Declaration included in 2014–15, the world detailed language reinforcing the G7 commitment to has realized that support “strong health systems and better preparedness” Increased preparedness is key in LICs and LMICs focus on to global health global health security security International donors The IWG is recommending that preparedness indicators Willingness to may give preferential be included in World Bank loan decisions and that other support lending terms and banks and funding institutions include preparedness in investments in increased funding to its terms to implementing countries public health countries that priori- tize preparedness SOURCE: “G7 Ise-Shima Leaders’ Declaration,” White House, 2016 Appendix D—Change Management and Investment Case 99 Contents of this Document – Overview 1 Change management summary 2 Guidance on how to build an investment case a Overview b Argument library c Examples of investment cases EXAMPLES OF INVESTMENT CASE ILLUSTRATIVE Change leaders can develop investment cases by selecting arguments from the library that are most relevant to their audience Audience Improving health Managing Ensuring economic concern Strengthening security and externalities to health and growth the health system protecting social regional and global of the country stability community Audience Enable HSS through Become more low cost activities attractive to donors Ministry of Finance Prevent future with high and improve lending productivity & externalities terms financial losses from pandemics Improve constituent Strengthen the livelihood through Parliament economy through investment in investment in workforce resilience workforce Defend against resilience any malicious introduction of Improve reputational The Executive standing with pandemic from international donors internal or external Improve lives of enemies of the state citizens through a Ministry of Health stronger health system Reduce impact Improve workforce of a pandemic on security in the event Private sector productivity and of a pandemic bottom line 100  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level EXAMPLES OF INVESTMENT CASE ILLUSTRATIVE Example Investment Case: A Large West African Country (1/2) Country context Developing the investment case Economy The Ministry of Health would likely be the natural sponsor for This country is currently in its second year championing preparedness activity of economic recession, brought on by low Identify After identifying its priority preparedness action areas, the MoH’s oil prices change leader, objective will be to secure financing for prioritized preparedness The 3 largest sectors of this country’s champions and activities economy are: stakeholder The primary audiences for the case would be the Ministry of Finance – Trade groups and the parliamentary body, as both stakeholders’ approval is required – Agriculture for any new budgetary requests – Information and Communications1 Any new debt (e.g., development Objectives and motivation assistance loans) must be passed through – The Ministry of Finance will be most interested in the economic the parliamentary body for approval6 growth of the country and the economic case for enacting the Public health preparedness plan This country currently contributes >1% of Historical and macroeconomic country insights its GDP to health, significantly less than – The Ebola outbreak is a high-impact example of the human and other lower-income countries2 economic devastation that can result from an infectious disease This country has completed the PVS Establish the outbreak, both in-country and across the West African region assessment but not the JEE assessment3 stakeholder – Recent outbreaks of vaccine-preventable diseases are topical motivations reminders of the existence and impact of preparedness gaps Current events This country is currently experiencing a Personal position and objectives vaccine-preventable disease outbreak that – As administration appointees, Ministers of Finance may be more has resulted in hundreds of deaths which sensitive to the Executive’s position on discretionary budget issues experts suggest could have been reduced – National Assembly members may be particularly interested in with better surveillance, a core capacity of supporting highly visible initiatives when they are up for re-election pandemic preparedness activity4 In 2016, a conflict region of the country Deep dive on following page experienced an outbreak of a vaccine- Develop the preventable infectious disease, which had investment case gone undetected for over 2 years5 1 “[Country] Economic Report,” World Bank, 2015; 2 “Health expenditure public (% GDP),” World Bank website, 2017 3 World Health Organization, 2017; 4 WHO website, 2017 5 WHO website, 2016; 6 Expert interviews EXAMPLES OF INVESTMENT CASE ILLUSTRATIVE Example Investment Case: A Large West African Country (2/2) Potential investment case for the Ministry of Finance We understand the di culties of ensuring the growth of our economy and believe that health emergency preparedness is essentially important to that e ort. Our country has recently experienced public health emergencies that highlight the human and economic consequences of infectious disease outbreaks. In addition to the immeasurable losses of human life, $3.4 billion was spent to fight the 2014 Ebola epidemic in the 3 hardest hit countries (Guinea, Sierra Leone, Liberia), and even though we were able to detect and contain it, our economy was also impacted by the outbreak; many commercial business saw declines during the Ebola crisis.2 Infectious disease outbreaks of varying severity hit the West Africa region regularly, and we are currently experiencing the worst outbreak of a commonly-occurring infectious disease that we have seen in recent years, from which hundreds of people have already died1 and for which the economic costs have not yet been estimated. Health emergency preparedness can reduce the direct costs of responding to infectious disease outbreaks and reduce non-direct productivity losses. Preparedness activities-- like further improving our country’s surveillance capabilities--would allow our public health o cials to catch outbreaks and contain them more quickly, thus drastically reducing human and economic losses in the process. For example, a recent study shows that in response to meningitis outbreaks, a shorter response time (4 weeks instead of 6 weeks to reach desired coverage) could increase the number of averted cases by 218%.4 In addition to the lives and direct costs that we could save from improving our health emergency preparedness infrastructure, we could also reduce productivity losses from pandemic outbreaks. For example, on top of the $3.4 billion in direct costs that went into fighting the pandemic, the 3 nations hardest hit by Ebola also faced $2.2 billion in productivity losses.3 Our country did not face such severe losses because we were able to detect the outbreak early; however, we can do even more to strengthen our preparedness infrastructure. Investing in preparedness does not only a ect human health; several outbreaks are due to zoonotic diseases: investing in preparedness will therefore also reduce risks for our animal population and enhance our ability to trade livestock internationally. As a nation for whom agriculture is one of the biggest sectors and for whose poor households often count livestock as their most important assets, this is an economic and human risk that we should take steps to reduce. […] 1 WHO website, 2017 2 “The Economic Impact of the 2014 Ebola Epidemic: Short and Medium Term Estimates for West Africa,” World Bank, 2014 3 IBID 4 Response thresholds for epidemic meningitis in sub-Saharan Africa following the introduction of MenAfriVac® Vaccine, Vaccine, Volume 33, Issue 46, Pages 6212–6217 (2015) Appendix D—Change Management and Investment Case 101 i Ebola Response Case Study: Economic Impact in Nigeria and Sierra Leone Context Key Insights The Ebola outbreak in West Africa was first reported in March 2014; it rapidly spread to over 28,000 Nigeria was a ected by cases, becoming the deadliest Ebola outbreak since the virus’ discovery in 1976 Ebola when the alert had Although isolated cases of the virus were seen in other parts of the world, the virus primarily a ected already been raised in other West Africa; Liberia, Sierra Leone and Guinea all faced heavy economic and human loss while Nigeria, countries in West Africa; Uganda and DRC were able to contain the virus and its impact however, having a pandemic response infrastructure in place in advance of the Ebola cases were not recognized or contained quickly, which exacerbated the Ebola outbreak helped virus’ spread preventing substantial loss Response Community awareness campaigns on the symptoms and responses to the of human lives and to the outbreak were not executed until several months after the first incident country’s economy Sierra The WHO attributes Leone Nigeria’s successful Ebola The Sierra Leone government was expected to have foregone $920 million outbreak response to: Economic in loss GDP in 2015 as a result of the outbreak – The existence of a impact The country saw over 12,900 reported cases and over 8,000 deaths, 221 of highly skilled virology whom where healthcare personnel lab – High quality contact tracing by experienced In July, the Ebola virus was introduced to Lagos, a very dense urban city that would normally make the virus di cult to contain epidemiologists – Establishment of a Nigeria immediately allocated funds for response and dispersed them quickly centralized incident Response for public information campaigns and special treatment facilities management and Infrastructure in place for polio eradication were repurposed to support the response center Ebola response, putting GPS systems to work for real-time contact tracing Nigeria – Strong community and daily mapping of transmission chains outreach strategy that de-stigmatized the Nigeria contained the outbreak to 19 cases and 7 deaths response Economic Nigerian epidemiologists were able to link the case back to an air traveler impact from Liberia and reach 100% contact tracing in Lagos The WHO declared Nigeria Ebola free in October of 2014 SOURCE: Ebola: “Most African Countries Avoid Major Economic Loss but Impact on Guinea, Liberia, Sierra Leone Remains Crippling,” World Bank, 2015; “Cost of the Ebola epidemic,” CDC, 2016; The Economic Impact of the 2014 Ebola Epidemic: Short and Medium Term Estimates for West Africa,” World Bank, 2014; “Successful Ebola Responses in Nigeria, Senegal and Mali,” WHO, 2015; “Ebola containment and prevention: Nigeria provides lessons for the world,” CovAfrica, 2014 EXAMPLES OF INVESTMENT CASE ILLUSTRATIVE Example Investment Case: A SE Asian Country (1/2) Country context Developing the investment case Economy The Ministry of Health would be the sponsor for championing This country’s top 3 major exports in preparedness activity 2016 were: Identify After identifying its priority preparedness action areas, the MoH’s objective – Telephones & mobile phones change leader, will be to secure financing for prioritized preparedness activities – Textiles & garments champions and The primary audiences for the case would be first, the Ministries of – Computers & electronic products1 stakeholder Agriculture, Finance and Defense and then, after buy-in assured among The travel and tourism industry groups these, the final audience would be the government contributed ~14% to this country’s GDP in 20152 Objectives and motivation Public health – The Ministry of Finance will be most interested in the economic case for This country’s share of GDP spent on enacting the preparedness plan health is ~60% more than the average – The Ministries of Agriculture and Defense will be particularly interested of other lower-middle income in the impacts of preparedness on the agriculture industry and national countries3 security, respectively This country has completed both the Historical and macroeconomic country insights PVS and JEE assessment and is – The tourism industry is a large and growing part of this country’s Establish the working with the WHO to develop a economy that could be severely jeopardized by an infectious disease stakeholder costed NAPHS4 outbreak motivations This country is a member of the – This country’s demonstrated prioritization of public health (e.g. high Mekong Basin Disease Surveillance health spending as percentage of GDP, membership in regional Network, which is a consortium of 6 surveillance network) can be the logical foundation for further health neighboring countries to collaborate investment on infectious disease surveillance Personal position and objectives and control – As administration appointees, Ministers of Agriculture and Defense may Current events be more sensitive to the Executive’s position on discretionary budget issues In February 2017, a zoonotic disease killed thousands of chickens after 4 Develop the investment case Deep dive on following page months of no reported outbreaks5 1 [Country], The Economist Intelligence Unit, 2017; 2 “Travel & tourism economic impact 2016, [Country],” World Travel & Tourism Council, 2016 3 “Health expenditure public (% GDP),” World Bank, 2017; 4 WHO; 5 Media reports, February, 2017 102  From Panic and Neglect to Investing in Health Security: Financing Pandemic Preparedness at a National Level EXAMPLES OF INVESTMENT CASE ILLUSTRATIVE Example Investment Case: A SE Asian Country (2/2) Potential investment case for the Ministry of Agriculture, Ministry of Finance and Ministry of Defense Our country’s economic growth in the past few decades has been among the fastest in the world.1 Pandemic preparedness will allow us to complement our positive growth trajectory by de-risking the human, animal and economic losses that could result from infectious disease outbreaks. Investing in preparedness could allow us to catch the presence of infectious disease sooner, allowing us to reduce the potential loss of human lives that can result from infectious disease outbreaks. For example, The 2015 MERS outbreak in South Korea resulted in 186 cases and 38 deaths from the infection, while neighboring Thailand, which was able to catch the presence of the disease early with its surveillance infrastructure, only saw 3 cases.2 Additionally, investing in preparedness could reduce the impact of infectious diseases on our agricultural sector. The recent zoonotic disease outbreak that we witnessed in February 2017, which resulted in the deaths of thousands of chickens,3 underscores our nation’s vulnerability to emerging epidemic threats. The recent outbreak did not reach the human population, however it did impact our agricultural exports: in April the government of a large Middle Eastern country halted the import of poultry from our country.4 Infectious diseases’ impact to our economy can be significant: according to a 2005 study found that H5N1’s impact on the poultry sector in Cambodia, Thailand and Vietnam amounted to $560 million.5 Infectious diseases can have significant economic impact beyond the agricultural sector. For example, the economic impact of the MERS outbreak was so severe in South Korea in 2015 that the government drew up a $9bn supplementary government to respond, with much of the budget aimed at supporting the South Korean service sector, which had su ered from reduced consumer confidence.6 The tourism industry is particularly susceptible to fears of infectious diseases. The travel & tourism industry contributed to ~14% of our country’s GDP in 20157 and could be severely impacted should an outbreak occur that we do not catch and contain early. We have already shown our commitment preparedness by joining the Mekong Basin Disease Surveillance Network. Let us further our e orts by financing priority preparedness activities. We cannot a ord not to, as this is a tangible threat to the health of our citizens, people in the Region and the economy of our nation. […] 1 Country overview, World Bank website, 2017 2 “Costly Lessons From the 2015 Middle East Respiratory Syndrome Coronavirus Outbreak in Korea,” PMC, 2015; “MERS-CoV- Thailand,” WHO, 2016 3 Media reports, February 2017 4 Media reports, 2017 5 “Human H5N1 influenza infections in Cambodia 2005–2011: case series and cost-of-illness,” BMC Public Health, 2013 6 “South Korea to spend $9bn to counter MERS impact,” Financial Times, June 24, 2015 7 “Travel & tourism economic impact 2016, [Country],” World Travel & Tourism Council, 2016 i Case Study: SARS in Asia, 2002–2003 The case of SARS demonstrates how economic … due to the reaction of people impact is more than proportional to severity and Governments to the threat of the infection … $60bn Economic loss Drivers of the economic impact: $20bn loss in terms of GDP Losses from tourism di erence Loss of consumer confidence and Additional cost related to gross spend expenditure and business losses Increased Government spending for prevention and response Decrease in exports and loss <8,500 Cases, with mortality rate of 9.6% of business confidence Absenteeism and closure of schools Economic costs spread across a large part of Asia (e.g., Thailand’s economy was badly hit although there were no reported cases) SOURCE: “Assessing the Economic Impact and Costs of Flu Pandemics Originating in Asia,” V. Rossi and J. Walker, Oxford Economic Forecasting Group, May 2005 Appendix D—Change Management and Investment Case 103 Printed by World Bank Group Printing & Multimedia Services.