The ACT-A Agenda: The financialization of a pandemic?

Newsletter Edition #30 [The Friday Deep Dives]


The apocalyptic headlines on virus variants and job losses sometimes prevent us from seeing the progress around us.

Listening to lengthy press conferences this week, I was struck by how grateful we should be to public health officials and scientists everywhere who are helping us understand the complexity of changes around us.

And in global health these days, it is difficult to separate the technical from the political. The bilingual briefing from Wuhan was imbued with political meaning (at least that’s what it felt like.). This was followed by the nuanced and helpful update from the WHO scientists on why they recommend the use of the AstraZeneca vaccine. (Soon, the WHO is expected to come to a decision on the Emergency Use Listing for the same.)

Undoubtedly, the kinds of decisions experts and policymakers have had to make during this pandemic in the face of ambiguity and insufficient information, will inform practice and strategy even in areas outside of health. For years to come.

While we have been flooded with the minute-by-minute update on vaccines, some big discussions are unfolding on how to finance the world’s way out of this pandemic. That’s our story this week. We intend to report on health financing issues in a systematic manner in the coming months. Write to us, if you wish to share your perspectives on this.

Also, we have new section that we will feature occasionally: Health and Technology. An area we wish to understand and report more on.

Finally, happy to share that I have now concluded the Entrepreneurial Journalism Creators Program at the City University of New York. It has been a rewarding time to learn from experts and fellow cohorts. I had the opportunity to ask and address the tough questions on the viability of a media product and the trade-offs that journalism entrepreneurs need to make. Undoubtedly it has been extremely challenging to be on top of a relentless news cycle, while also working on the nuts and bolts of operationalising a media initiative. We recount our on-going media entrepreneurship journey here.  

Thank you dear readers for being a part of this.

We will need your support as we transition into a paid model to make our reporting sustainable. More on this soon!

See you next week.



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1. Story of the week

Bonds, loans, debt-swaps and taxes

The ACT A plan to ride out the pandemic

The European Commission-backed ACT Accelerator [ACT A] which has the private sector at the table, has drawn up extensive plans to address the acute scarcity of resources to fund the response to pandemic. Measures include issuing social bonds, grants, a sovereign insurance pool, and even includes the consideration of a “global transaction tax”. These plans were first made public at a meeting of the ACT Accelerator Facilitation Council  earlier this week.

The ACT A needs more than US$27 billion to effectively address the pandemic globally. This is a fraction of the stimulus packages rolled out by countries around the world. Consider that the new Biden administration has set aside US$400 billion to address the pandemic in the U.S. alone. (Of the US$1.9 trillion stimulus package, the COVID-19 plan stands at $400 billion)

Compared to the early days of the pandemic response there now appears to be a recognition that there are limits to the use of funds from the Official Development Assistance. Discussions are now focusing on getting ACT A funding by tapping into treasuries in order to have access to these big stimulus plans of countries.

The ACT A boasts of lining up more than more than 2 billion vaccine doses in 190 countries, making available Rapid Diagnostics (RDTs) with access to more than 375 million low-cost tests for LMICs and 2.9 million courses of Dexamethasone, the first and only proven therapy for severe COVID-19. But clearly this has simply not been enough. With more than 2 million lives lost as a result of COVID-19 and 100 million plus confirmed cases, the ACT A is under pressure to shore up financing and change strategy.

Three shifts will inform this change in strategy, according to officials: “the era of COVID-19 vaccines”, the challenges posed by the variants of SARS-CoV-2 and the recognition that “international collaboration is increasingly fragmented & underinvesting in global solutions”.


It has been proposed that investments will need to be deployed by addressing “both speed & equity in the development and delivery of both scarce & widely available essential tools”.

The overheads of investments identified include R&D and Product Assessment; Market Shaping &  Manufacturing; Procurement and Demand Generation & In-Country Delivery.

Investments have been categorised into three types:

-          Investments to ensure speed would need to be primarily HIC/UMIC-financed (those that generate global public goods): $2.9 billion

-          Investments to ensure equity of scarce products for LICs would need to be HIC/UMIC-financed:  $16.3 billion

-          Investments for common products available at fair prices could potentially be LIC-financed: $8.1 billion  

Therefore more than $19 billion has come from HICs and UMICs, according to ACT A plans. Despite the acknowledged limitations of the ODA, a majority of this amount is expected to be raised from ODA and “exceptional ODA”, documents show.

It is also important to note that bulk of the $6 billion towards the ACT A, has come from some of the HIC/UMICs so far. (These figures do not take into account $4 billion that has been committed by the U.S.)


Further, three different categories of financing mechanisms have been suggested.

Mechanism for LICs/LMICs: financing options from World Bank, International Monetary Fund, Debt-Swaps, Loan buy-down, Sovereign insurance pool, new issuance of Special Drawing Rights among others

Mechanisms for HICs/UMICs: Social bonds, direct grants and vaccine bonds from the International Finance Facility for Immunization (IFFIm)

New Public Revenue Streams for LICs, LMICs, UMICs and HICs: Global Transaction Tax, Carbon tax and Sector tax (such as on airline tickets).

Image credit: A Financial Framework for ACT Accelerator, February 9, 2021


Officials who briefed the meeting suggested that social bonds along the lines of existing vaccine bonds could be issued. By pledging future commitments now, social bonds can be issued that will enable frontloading investments. The goal is to “have cash now, pay into the future”, an official representing the finance working group of the ACT A said at the meeting.

(Essentially public authorities can issue bonds in order to raise money. Investors in these bonds give a loan to the authorities so to speak - with the agreement that the face value of the bond is paid back, in addition to earning interest. Funds so raised can be immediately deployed, in this case, towards pandemic response.)

Gavi’s IFFIm uses long-term donor pledges from sovereign donors, by issuing vaccine bonds in  capital markets. By signing the grant agreements, countries agree to pay these obligations in a specified schedule of payments, according to Gavi. This results in frontloading funding for Gavi's vaccine programmes by issuing vaccine bonds based on the entire amount of long-term donor pledges.  

It is not clear to what extent countries will be enthusiastic to lap up social bonds. Plans suggest that there is a target of upto $3 billion to be raised by issuing social bonds.

Whether these kinds of innovative financing mechanisms will help address a crisis, is unclear.


There seems to a be fair amount of reliance on multilateral development banks in the ACT A plans to meet funding requirements for the pandemic response in the developing world. Specifically, these include mechanisms and trust facilities from the World Bank and the IMF. Documents show that up to $3 billion can be raised from these banks to meet the funding gap of the ACT A.

The World Bank explains instruments such as the MPA as: “the Multiphase Programmatic Approach (MPA) allows countries the flexibility to implement an approach to achieve development objectives in stages when: the  development challenge is complex; it would take a longer time to achieve the objectives; it would take a longer time to prepare one large project; the solution needs a broader and comprehensive approach; or when a stop-and-go approach is not feasible. Projects under an MPA program may be financed by Investment Project Financing; or Program-for-Results Financing, or their combination.”

IMF grants CCRT & PRGT: “The Catastrophe Containment and Relief Trust (CCRT) allows the IMF to provide grants for debt relief for the poorest and most vulnerable countries hit by catastrophic natural disasters or public health disasters. The relief on debt service payments frees up additional resources to meet exceptional balance of payments needs created by the disaster and for containment and recovery. Established in February 2015 during the Ebola outbreak and modified in March 2020 in response to the COVID-19 pandemic, CCRT grants complement donor financing and IMF concessional lending through the Poverty Reduction and Growth Trust (PRGT).”


In order to meet the costs of the pandemic response, the emphasis now will be to get more countries to pay for a global solution to the crisis, officials said. The goal is to broaden the number of countries who must pay their share for a global solution.

Ways are being devised to engage with finance ministries in order to refine a burden sharing model that will be a function of a country’s income and its integration into the world economy.

Such a model will mean that richer countries will have to pay a higher proportion of their income. In addition, the model will also take into account to address those who cannot pay.

Contribution = R x GDP

R = f (GDP per Capita , Openness)

[Openness as defined by the IMF].

(See Capital Account Openness Index 2016)


The founding donors of the ACT A are Canada, France, Germany,  Italy, Japan, Norway, Saudi Arabia Spain, United Kingdom. The following countries have been classified as “market shapers” - Brazil, China India, Indonesia, Republic of Korea, Russia, South Africa and USA.

The non-government partners are Bill & Melinda Gates Foundation, Wellcome Trust and World Economic Forum.

Image Credit: ACT-A Prioritized Strategy & Budget for 2021, February 9, 2021

Meeting financial requirements for the ACT A might actively contribute to the further financialization of global health critics fear. In addition, concerns are also being raised on the dilution of the Framework of Engagement with Non-State Actors (FENSA).


WHO Special Envoy for the ACT Accelerator Ngozi Okonjo-Iweala delivered the key note address at the meeting (See the Health Policy Watch story on her address) The significance was lost on no one. And not only because she is at the cusp of assuming her role as the Director-General of the WTO. Okonjo-Iweala concluded her term as Chair of the Board at Gavi – The Vaccine Alliance in December 2020. She also bring decades of experience from her stint at the World Bank.

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2. Update: Health & Technology

EU-led Draft Resolution on Strengthening WHO Preparedness and Response to Health Emergencies: Published by Geneva Global Health Hub

WHO member states will have consultations on this draft resolution next week.

Reading through the zero draft, two particular paragraphs on digital technologies in the context of emergencies and preparedness leapt out at us:

PP11 Recognizing the potential of digital technologies to strengthen global health security, implement public health measures, bolster national response efforts resulting from COVID-19, to protect and empower individuals and communities, including by building on decision WHA73(28) (2020) on Digital Health;

OP6.13 Make proposals on the use of digital technologies, by WHO and IHR State Parties and, as appropriate, other stakeholders, to upgrade and modernize communication on health emergency preparedness and response, including for the improved implementation for IHR during health emergencies, through the development of an interoperability framework for secure global digital health information exchange

We are keen to know more on the direction of these proposals.


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