ALMOST THREE years ago, Jim Yong Kim, then president of the World Bank, announced an innovative idea to use capital markets to help poor countries cope with pandemics. The bank launched a specialized pandemic bond and derivatives fund that would pay a handsome interest rate to investors, on the understanding that investors would lose money if the bonds were needed to fight a spreading disease. The pandemic bonds have yet to pay out. Now is the time.

Mr. Kim said in June 2017, at the time of the launch, “We are moving away from the cycle of panic and neglect that has characterized so much of our approach to pandemics.” It was a noble goal, but the cycle remains. The new coronavirus disease, covid-19, is spreading around the world, people are panicking, and many poor countries with weak health systems stand to be hit exceedingly hard. The coronavirus transmits between humans and has a high mortality rate among the elderly, according to tentative data from China, where the outbreak began. Low- and middle-income countries are precisely those that the World Bank bonds were designed to help out, and, as Bill Gates pointed out last week, their health-care systems are already “stretched thin.”

More @ Source: The time has come to cash out our pandemic bonds – The Washington Post

critics say the “insanely complicated” terms of the high-interest bonds are heavily skewed towards investors, while for the victims any payouts may come too late, if at all.  One economist described the bonds, payouts from which depend on how deadly the outbreak is, as “obscene”.
Critics say the “insanely complicated” terms of the high-interest bonds are heavily skewed towards investors, while for the victims any payouts may come too late, if at all.
One economist described the bonds, payouts from which depend on how deadly the outbreak is, as “obscene”.

One economist described the bonds, payouts from which depend on how deadly the outbreak is, as “obscene”.

Olga Jonas, a senior fellow at Harvard Global Health Institute who was an economist at the World Bank for three decades, said: “The whole mechanism is highly unfortunate. The objectives were to help the poorest countries respond quickly to outbreaks. Infectious disease spreads exponentially and the coronavirus has a very rapid growth rate. But the bonds only get triggered when the disease has spread for a long time.”

Jonas, who has analysed the bonds’ terms, said they were “so convoluted, it is not at all clear whether they will pay out at all. It is too little, too late – and in this case, maybe never.

“What’s obscene is that the World Bank set it up this way. It waits for people to die.”

What Are The Risks In Pandemic Bonds? | Money Mind | Bond Markets ...

The Bonds did not even pay out for an Ebola Outbreak…. What a away to make bank… World Bank

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