In poor countries, war zones, and fragile states, the human and economic costs of COVID-19 could be overwhelming, killing or sickening thousands, and plunging millions into life-threatening poverty. What international aid money might be needed, and how much is out there?
For the latest on coronavirus funding, and how to track it, click here.
A review by The New Humanitarian has found emergency COVID-19 funding appeals totalling $5 billion from aid groups. Short-term commitments recorded by the UN stand at about $1 billion, and its agencies are crying out for immediate funding for basic logistics.
The World Bank, the EU, and a few large institutions look set to offer several billion dollars in longer-term development grant funding to low- and middle-income countries. Much larger amounts are on offer for loans, but those will add to long-term debt burdens that in some countries are becoming risky already.
However, none of this begins to meet the scale of needs, according to Oxfam and other analysts. Grant funding should, according to one UN study, be set at $500 billion, and the loss in remittances alone will exceed $100 billion, according to the World Bank.
State intervention and domestic mobilisation
To cushion the impact, according to an informal World Bank survey, 16 low-income and 27 lower-middle-income countries have also put in place some safety nets – unemployment benefits, sick pay, or other “social protection” measures. However, according to the monitoring – led by World Bank official Ugo Gentilini – that still leaves more than 30 countries without any known state social assistance plans. These include some of the poorest, and several already in humanitarian crisis: Yemen, Syria, Central African Republic, and Myanmar.
With or without government intervention, volunteers, private individuals and businesses, faith communities, neighbours, friends and family, as well as NGOs and civic groups, are all playing a major role in attempting to contain the disease.
What happens without international resources will be key: research has estimated that formal international aid may make up as little as one percent of resource flows to countries experiencing humanitarian crises. However, the globalised nature of this crisis and the systemic shocks may mean less resources are available domestically, compared to a more typical emergency. Also, one important lifeline in low-income countries – remittances from relatives working abroad – may dry up as layoffs expand worldwide. The World Bank estimates a drop of $110 billion to low and middle-income countries.
New and old debt
Multilateral banks have found up to $240 billion to offer 100 developing countries in the next 15 months, according to David Malpass, the World Bank president. The International Monetary Fund has set aside $50 billion. Another $20 billion in debt service payments due from low-income countries have been postponed by the G20 and some commercial lenders. The IMF has only about $500 million available as grants – in a special fund to help countries that can’t make repayments on existing loans.
All of this should raise cash flow available to those countries, and allow some social policy-making and relief spending in response to COVID-19. But almost all of it is loans or delays in debt payments. Some of the most vulnerable countries are already labouring under heavy levels of debt while expecting a collapse in tax revenues due to COVID-19.
Grants, like the needs, may be hard to pin down. Those from conventional aid funders – addressing life-threatening and crisis situations – will be easier to track if reported as “humanitarian” spending.
Formal development spending is reported to the OECD by its members (about 59 percent of estimated international aid flows), but the reporting lags by a year at least. Private sector donations, NGO fundraising from the public, and faith-based funding flows are largely untraced.
UN agencies called for $2 billion for their operational responses, including a cargo and passenger logistics operation and $450 million for the World Health Organisation (the only element looking to be quickly secured). The Red Cross and Red Crescent movement appealed for $823 million.
Individual countries with internationally-funded relief operations are gradually issuing updated funding requests. For example, aid agencies working with the Ugandan government will increase their request to donors by $316 million this week to include the costs of responding to COVID-19.
For the health response in developing countries, the WHO had come up with an initial requirement of $675 million, a plan due to be increased and updated in April. Despite a public funding campaign, including celebrity performances and contributions from the private sector, records showed a total of only $195 million as of 22 April.
Funding appeals and requests
- The WHO had, as of 1 February, estimated new global spending requirements of $675 million for three months of “priority public health measures”, including its own immediate spending. It set out planning assumptions in a 28-page document. It arrived at a total figure for each country after taking into account existing capacity and risk level. On average, it proposed a country would need roughly $65 million in extra expenditure. That will be revised upwards in April.
- In addition to the listing above, a number of the largest international relief agencies are actively fundraising for the crisis, but have not given a target amount. Those include Médecins Sans Frontières, Catholic Relief Services, and the Norwegian Refugee Council.
Where could it come from?
Some of the international aid money for COVID-19 will be redirected from existing pots: the UN’s global emergency standby response fund, the CERF, has put up $95 million. Eleven country pooled funds managed by the UN’s emergency aid coordination body, OCHA – meant for flexible response according to changing priorities – have allocated a total of $68 million. Another example: The Global Fund to Fight AIDS, Tuberculosis and Malaria – a large multi-donor aid pool – will allow some funds to be redirected to coronavirus. The total volume of international aid is about $220 billion a year, according to data from OECD and Oxfam.
Aid budgets may have to be adjusted more radically in the coming months as the pandemic evolves, potentially diverting spending from other priorities. However, in a joint statement, major donors said they would “strive to protect” aid budgets as recession bites, and try to avoid losing ground gained in achieving developmental goals.
The contribution of private sector players to international grant-making and relief is also not tracked by any central operation. Often, as in the case of the Jack Ma Foundation – which has emerged as one of the larger donors – it consists mainly of in-kind donations of goods, supplies, or transportation for which the cash equivalent value is not published. Some contributions from the private sector are even harder to evaluate: for example, advertising space provided by Google to the WHO cost the company no real money but could be an opportunity cost in terms of lost revenue.
Major humanitarian funding announcements
Despite appeals totalling over $5 billion, donations so far stand at around one billion.
The COVID-19 crisis highlights a peculiarity of international aid spending: humanitarian and development aid are treated as different, and the funding reporting is entirely distinct. (The merits of joining up humanitarian and development more closely – sometimes called the nexus approach – is a hot topic in policy circles.)
Most mainstream aid spending from countries and institutions like the EU that are classified as “humanitarian” are collated by the UN in its Financial Tracking Service, which records about $20 billion in annual funding flows to crises around the world. So far (23 April) it has found about a billion dollars allocated to COVID-19.
Other funding sources
Humanitarian funding is however the minority of international aid flows, and the response to the shock of COVID-19 will likely draw funding from other pots, generally defined as “development”.
A selection of big and notable funders beyond the “humanitarian” category:
EU development budget
World Bank grants
IMF debt relief
Global Partnership on Education
Pandemic Financing Facility
Online fundraiser for WHO
(Updated 28 April 2020)
COVID-19 is bound to become a major area of international aid spending – from the giant banks to the volunteer crowdfunding operations. However, there is so far no single listing of the aid funding, although the WHO and the US non-profit Kaiser Family Foundation both track a range of pledges and donations for gifts specific to health.
Keeping track of other donations – those that fall into the category of “development” for example – requires accessing data from a variety of sources, including open data released under the International Aid Transparency Initiative standard.
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