The cynicism of the bourgeois knows no bounds. It reaches even the darkest of domains, like pandemics. Under capitalism, the existence and spreading of diseases can bring massive profits to a small minority. These last few years, while healthcare systems around the world have been destroyed by austerity, investors have pocketed colossal sums of money by speculating on pandemics. Since 2017, the World Bank has allowed investors to buy bonds with an annual interest rate of up to 11%, specifically under the pretext of fighting pandemics in poor countries. If a pandemic is declared, they lose their investment. But every eventuality is covered, and the criteria that trigger pay-outs to countries are very restrictive. Despite multiple healthcare crises like the measles and Ebola outbreaks in Africa, which caused hundreds of thousands of deaths, these bonds never paid any money out, and investors pocketed several tens of millions of euros in interest. In a situation where Covid-19 is causing tens of thousands of deaths in 180 countries, not a cent has been released.
[Read the original in French here]
A cynical pretext
In the final analysis, the historical role of capitalist institutions is to redistribute the wealth created by the workers to the capitalist class. This tendency has increased since the economic crisis of 2008 and is finding itself exacerbated in light of the current crisis. In fact, in similar periods of crisis, the obscene profits of the bourgeoisie are threatened. Anything is a valid excuse to drain public money, even disasters, suffering, disease and death. These “pandemic bonds”, whose name is enough to expose their cynicism, are just a pretext to enrich a few capitalists whose wealth is already beyond belief. The World Bank sells bonds to investors who then get “bond coupons”, i.e. an annual yield. And who pays for these coupons? The contributing states Japan, Australia and Germany – in other words the workers of those countries.
As La Tribune (French weekly financial newspaper) highlights, the World Bank has raised €320 million in investments from asset management companies like Amundi, which is owned by Crédit Agricole, among others. Two categories (“classes”) of bonds are emitted: Class A has a 6.5% interest rate with only 16.67% of invested capital at risk; Class B’s interest rate is 11% but the whole invested sum is at risk. The first category blatantly illustrates that these “pandemic bonds” are well and truly an excuse to make money: the sum pocketed by investors from interest rates since 2017 – €96 million – is larger than the sum that would be paid out to struggling countries in the case of a pandemic.
The nature of capitalist society is based on the constant plunder of the wealth created by the working class / Image: Socialist Appeal
But this is not all. The criteria for triggering pay-outs are very restrictive and morbid. The epidemic in question must cause a certain number of deaths, which varies according to different regions of the world, and it must reach a certain contagion speed. These criteria contradict the initial stated aim of the bonds, according to the the World Bank: “a way of helping to stop a very serious infectious disease becoming a pandemic.” In reality, an epidemic has to have caused thousands of deaths and spread to several countries – i.e. it has to already have the status of pandemic – in order for financing to be triggered. The Ebola epidemic in 2018 in Congo was apparently not serious enough for the rich to profit slightly less from these “pandemic bonds”. The 140,000 lives taken by measles the same year, in their vast majority children under five, was clearly not significant enough for them either.
Furthermore, the time period between the appearance of the first epidemic focuses and the release of funds has to be 3 months! During this period, Covid-19 has extended to 180 countries and killed more than 70,000 people. But this is not enough for the World Bank: it postponed the deadline by two and a half weeks in order to check whether the pandemic was really a pandemic, and whether the criteria were met. In other words, the chances of developing countries actually receiving these funds are as scant as the sense of humanity of these speculators. In July 2020, the bonds will arrive at their scheduled maturity date, and these vultures will pocket their initial investment, with several tens of millions of euros on top – in the midst of a pandemic.
No confidence in the capitalists!
This massive swindle reflects the nature of capitalist society, which is based on the constant plunder of the wealth created by the working class. In order to fight pandemics and, more broadly in order to protect our health, we cannot trust the capitalists. Public funds have to be invested on a massive scale in hospitals, in research and in public services in general. Capitalist governments will not do this: it is not in their interest, as this pandemic bonds scandal illustrates. Only a government of the workers themselves would take the measures that are necessary in this type of crisis, in the interest of the overwhelming majority of society.