Building resilience to future outbreaks: Infectious disease risk financing solutions for the Central Asia Regional Economic Cooperation Region

This study provides a review of infectious disease risk financing schemes to draw lessons and recommend solutions for the Central Asia Regional Economic Cooperation (CAREC) member countries. CAREC region was badly affected by the COVID-19 pandemic. Prearranged financing for shock events greatly enhances the cost-efficiency and effectiveness of response, but this was virtually nonexistent for infectious diseases risk prior to the COVID-19 outbreak. The study offers some recommendations to strengthen the disaster risk management strategies and public sector budget resilience of CAREC member countries.

The study proposes three infectious disease risk financing mechanisms for caRec member countries. First is a spark risk cover, to provide rapid financing for countries to manage an outbreak and aim to contain spread within as small an area as possible. This can be designed to access the reinsurance or insurance-linked securities market. Second is a containment financing mechanism, to finance activities in neighboring countries to a country claiming under the spark risk cover. Mobilizing and implementing activities in neighboring countries are to further strengthen the initial early response, with the focus on preventing the development of a regional or global outbreak. This is likely to rely on donor financing, and ADB can play a leading role in the development and verification of pre-agreed response activities, as well as to convene donors. Third, is a domestic focused SME business interruption program. Economic impacts fall heavily on this sector and support is likely to be necessary in a medium-sized outbreak. A public–private partnership framework is most suitable for this third option.