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Linking post-pandemic health and economic growth
As a cochair of the G20 Joint Finance and Health Task Force, Indonesia is currently in a position to continue shaping the forum's Framework on Economic Vulnerabilities and Risks as a mechanism to mitigate the impacts of future pandemics to benefit developing countries, including itself.
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Masked shoppers and staff interact while following COVID-19 health and safety rules on May 29, 2020 at a supermarket in Tangerang, Banten. (AFP/Fajrin Raharjo)
Many studies showed the close relationship between public health and economic growth during the COVID-19 pandemic. At its peak in 2020, the global economy experienced severe negative impacts, including a 3.4 percent contraction in the world's collective gross domestic product (GDP), equivalent to US$2 trillion in lost economic output.
However, studies that break down the indicators that caused these negative impacts have been insufficient.
On Sept. 9, leaders of the Group of 20, the world’s premier economic forum, welcomed a discussion on the Framework on Economic Vulnerabilities and Risks (FEVR) in their declaration. This work was created through collaboration between the World Health Organization, the World Bank (WB), the International Monetary Fund (IMF) and the European Investment Bank (EIB).
In particular, the framework intends to serve as a tool to better understand health and economic vulnerabilities caused by pandemics and their resulting risks.
The G20 Joint Finance and Health Task Force (JFHTF), a technical task force that reports to G20 finance ministers and health ministers, has reviewed a preliminary analysis on the FEVR. The analysis showed that 16 indicators across the domains of health system resilience and response capacity, macroeconomic stability and social and economic protection strongly correlated with GDP per capita (purchasing power parity/PPP) and pandemic-driven changes to GDP in 2019-2020.
These indicators range from people with bank savings, exports and central government debt to the number of physicians, number of hospital beds, informal employment, internet access and social protection benefits.
For instance, higher numbers of physicians and hospital beds per 1,000 population indicate a stronger health system and greater economic response capacity. A higher proportion of expenditure on social protection meanwhile leads to higher resilience to a pandemic, while a lack of social protection mechanisms means more exposure to pandemic risks.
