Global Economic Policy Reactions to COVID-19

by Beth Brodsky

Countries across the globe are changing economic policy to respond to the COVID-19 crisis. Today’s emergency response will specifically impact the world’s aged and how people will age in future years.

For example, the International Monetary Fund reports that in Jordan, as of March 23, the country is allocating 50% of its maternity insurance revenues (JD 16 million) to material assistance for elders and individuals who are sick. As of April 2, Mexico is advancing pension plans to older adults. Hong Kong offered  1.3 billion dollars for vulnerable populations, including programs targeting elders.

These responses are coming at cost in all countries. As of March 26, the Organisation for Economic Co-operation and Development (OECD) predicted a decrease in GDP by at least 15% for the majority of the world’s largest developed countries. Higher income countries like the United States are feeling institutional impacts of COVID-19, without clear future standards yet in place. Some hospitals in the U.S. opted out of offering elective surgeries, and are now feeling the monetary impact of that decision. At a time when staff is needed, hospital funding sources are questioned.

LeadingAge recently educated its provider network on the U.S.’ “Paycheck Protection Program” to maintain/restore payroll for healthcare provider care workers throughout pandemic. Without care workers, there is no care. But in the fog of crisis, immediate responses from localities are being made sooner than long-term policy considerations.

Regardless of country income, every city has its rich and poor. Many wealthier parts of cities can rely on digital solutions for social distancing in a way that those without access to basic needs cannot. COVID-19 knows no class system, so countries are developing policies to find relief for the majority of citizens, like suspending rent payments. Bratislava developed a Senior Citizen’s free-of-charge phone line for seniors to access their basic needs like food and medication. Lima, Peru, has a voluntary register for older citizens and a program for bonus soles. Yokohama, Japan, distributed 500,000 free facemasks to elder care institutions.

With cities in higher income countries strapped, how can we put in perspective what that looks like for countries who entered the crisis without the same capital?

Oxfam highlights that while developed countries health systems are overwhelmed, low-income countries are devastated. Italy has one doctor for every 243 people. Compare that to Zambia’s one doctor for every 10,000 people. In refugee camps globally, there is one doctor for an estimated 25,000 people. Mali has 3 ventilators for every million people.

Oxfam released a report suggesting solutions for how the globe should react to build a long-term worldwide response. Oxfam recommends doubling funding to 85 of the world’s poorest countries. That funding could hire 10 million health care workers, affecting the health of 3.7 billion people. As we know how quickly COVID-19 spreads, preventing coronavirus in 3.7 billion people can change world history.

Asking high-income countries for aid in a time of severe economic downturn may seem impossible. However, recontamination after travel bans are lifted seems worse. One country’s inequitable healthcare system is another country’s second wave contamination.

The World Economic Forum suggests forgiving country debt in combination with Oxfam’s aid proposal. They also suggest that nations must follow Spain’s lead and requisite items from private healthcare centres. Free testing and treatment must be made immediately to all. The World Economic Forum puts into perspective that these solutions are doable, “160 billion dollars sounds like a lot. It’s entirely possible. It’s less than 10% of the U.S. fiscal stimulus to tackle coronavirus. It’s far more than what government donors are committing already.”

Right now, the world is in a haze. While there are no clear answers, there are solid policy recommendations that should be completed at the global scale, based both on local action and international cooperation. If you have suggestions, please email us at info@globalageing.org with innovative global policy recommendations.