The World Bank set up the Pandemic Emergency Financing Facility (PEF) in 2016 to finance outbreak responses by national authorities, WHO, UNICEF, and
others. The largest component of the $500 million PEF is insurance in theform of $425 million of bonds and swaps. @devisridhar
others. The largest component of the $500 million PEF is insurance in theform of $425 million of bonds and swaps. @devisridhar
So far The World Bank Pandemic Insurance Fund has paid out NOTHING either for Ebola or #COVID19
As @olga_02138 Olga Jonas has stated, the PEF was promoted for political rather than public health reasons, used aninappropriate risk-financing instrument (insurance); and adopted a complex, nontransparent, and flawed design for the insurance.
The Bank also encouraged abdication of public
responsibility for providing an essential public good (“a common defense” against microbial threats); and mobilized public resources intended for the poorest countries in order to benefit the private reinsurance sector and investors.
responsibility for providing an essential public good (“a common defense” against microbial threats); and mobilized public resources intended for the poorest countries in order to benefit the private reinsurance sector and investors.
The design of the insurance scheme is complex, and financial implementation nontransparent.
Neither the pay-ins nor the cost of insurance have been disclosed and only partial information is available in the 386 page PEF prospectus.
Neither the pay-ins nor the cost of insurance have been disclosed and only partial information is available in the 386 page PEF prospectus.
Keen to highlight its innovative involvement with the private
sector in the wake of the Trump election victory, the World Bank did not mention that IDA, the Fund for the Poorest Countries, would in 2019-20 pay most of the
coupons to investors and reinsurers in high-inc countries.
sector in the wake of the Trump election victory, the World Bank did not mention that IDA, the Fund for the Poorest Countries, would in 2019-20 pay most of the
coupons to investors and reinsurers in high-inc countries.
Financial market reporters described the pandemic bonds as paying “chunky coupons” (Financial Times) and “a bondholder’s dream offering a return found only in
shaky junk-rated bonds [...] and with a payout formula that was hard to trigger”. They paid 11% plus LIBOR rate interest!
shaky junk-rated bonds [...] and with a payout formula that was hard to trigger”. They paid 11% plus LIBOR rate interest!
A staggering two thirds of PEF resources has been earmarked for paying coupons to bondholders and reinsurers and for the fees assessed by the World Bank A TOTAL of $115 million. Nothing has gone to any pandemic.
