A little known financial mechanism set up by the World Bank could be behind the decision not to declare the coronavirus a pandemic.
By Whitney Webb and cross-posted from Mint Press News.
A little known specialized bond created in 2017 by the World Bank may hold the answer as to why U.S. and global health authorities have declined to label the global spread of the novel coronavirus a “pandemic.” Those bonds, now often referred to as “pandemic bonds,” were ostensibly intended to transfer the risk of potential pandemics in low-income nations to financial markets.
Yet, in light of the growing coronavirus outbreak, the investors who purchased those products could lose millions if global health authorities were to use that label in relation to the surge in global coronavirus cases.
On Tuesday, federal health officials at the Center for Disease Control and Prevention (CDC) announced that they are preparing for a “potential pandemic” of the novel coronavirus that first appeared in China late last year. The World Health Organization (WHO) has stated that an estimated 80,000 worldwide have contracted the disease, most of them in China, while more than 2,700 have died.
However, some have argued that the CDC’s concerns about a likely pandemic have come too late and that action should have been taken much earlier. For instance, in early February, Dr. Anthony Fauci, director of the US National Institute of Allergy and Infectious Disease, had told the New York Times that the novel coronavirus is “very, very transmissible, and it almost certainly is going to be a pandemic,” while former CDC director Dr. Thomas R. Frieden had echoed those concerns at the time, stating that it is “increasingly unlikely that the virus can be contained.”
Despite those warnings, among many others, the CDC waited to announce its concerns that the virus could spread throughout the United States. Their Tuesday announcement riled markets, wiping out $1.7 trillion in stock market value in just two days. The CDC’s warning has reportedly angered President Trump, who accused the agency of needlessly spooking financial markets.
Notably, WHO officials have taken an even more cautious approach than the CDC in their recent comments, stating that it is still “too early” to declare the coronavirus outbreak a “pandemic” while also asserting that “it is time to do everything you would do in preparing for a pandemic.”
The refusal to label the outbreak a pandemic is odd, since it refers to an epidemic or actively spreading disease that affects two or more regions worldwide. This currently describes the geographical spread of the highly contagious novel coronavirus, which has now resulted in significant clusters of cases far from China, namely in Italy and Iran. Countries closer to China, like South Korea, have also recently experienced an explosion in novel coronavirus infections.
It is possible that concerns over using the word “pandemic” could upset global markets and lead to economic turmoil, similar to what happened to the U.S. stock market following the CDC announcement on Tuesday. Though such concerns are valid, there is also evidence that a particular class of bonds issued by the World Bank that are closely related to official declarations of pandemics may also be responsible for having steered WHO and CDC officials away from using this term, even though the consequences of doing so could negatively impact global public health…