Responding to global systemic shocks: applying lessons from previous crises to Covid-19

EsadeEcPol Insight #5

Executive summary

• The world is going through a global crisis that goes beyond health issues and affects livelihoods in many countries nearly simultaneously.
• The SARS epidemic of 2003 left the world four clear lessons for improved healthcare:
  • invest in preparedness systems
  • centralise decision making
  • strengthen investment in public health and research
  • be transparent and timely in public communications
• However, only a few (mostly Asian) countries immediately learnt and implemented these lessons.
• Many countries remain unprepared to face a double health-economic shock, but those nations that are better prepared have become the first to deal with the double shock once the epidemic unfolded in Western Europe and the US.
• The concurrence of the shock, along with the globalised nature of economic and population flows, makes it necessary but nearly impossible to respond to the pandemic in a coordinated and supranational manner.
• Support from multilateral organisations, and joint global action to keep export markets open, will be crucial for overcoming the dilemma.
• Based on previous experience, we point to three fields for prioritising investment when facing shock:
  • support for containing the pandemic (mainly through the health sector)
  • support for strengthening social safety nets
  • support for measuring impacts (identifying which populations are experiencing the greatest hardships and which firms are failing) so that scarce programme funds can be directed where most needed.
• These measures must be as precise and cost-effective as possible. The 2014 Ebola outbreak and the current response to the Covid-19 challenge in Peru and Colombia show promising ways forward.