US has officially withdrawn from the World Health Organization

In an unprecedented move that could undermine the global coronavirus response and make it more difficult to stamp out other disease threats,  US Senator Menendez says that the US has officially withdrawn from the World Health Organization, (WHO).

Background to the headline

back in May, US President Donald Trump had criticized the United Nations health agency for failing to quickly sound the alarm when the novel virus emerged.

There were controversial claims by the US present and his administration that the WHO had helped China to cover up the threat it posed.

Countless lives have been taken and profound economic hardship has been inflicted all around the globe,

Trump said in a brief statement from the White House.

Experts, at the time of the announcements, urged against such a decision warning that an American withdrawal from the World Health Organization could wreak profound damage on the global effort to eradicate polio and could undermine the world’s ability to detect and respond to disease threats.

“The US has always had an extraordinary influence at the WHO — I mean to the extent that other countries have complained about American influence,” Ilona Kickbusch, a longtime former WHO official and chair of the Global Health Centre at the Graduate Institute of International and Development Studies in Geneva.

“The US has played an outsized role in global health … across a range of issues,” Jha said. “And I think its absence at the WHO would really harm the organization.”

The US is the WHO's top donor

This could not have come at a worst time during what  Dr. Anthony Fauci, one of the nation's leading experts on infectious diseases, said the US is knee-deep in the first wave of the virus. 

The US gave $893 million to WHO from 2018-2019, of which $237 million were assessed contributions, or annual dues governments pay to remain part of the member-based organization.

Polio eradication work constituted 27% of the US contributions, according to WHO Spokesperson Fadéla Chaib.

Kate Dodson, vice president for global health at the UN Foundation, said that the US still owes approximately $392 million to WHO through various multiyear cooperative agreements. Some of this money would carry over into WHO’s next fiscal year of 2022-2023.  

When the US de-funded the UN Population Fund in 2017, it paused all future contributions.

Now, the worst-case scenario is that the US does not pay the money it already promised WHO, Dodson explained.

If the US were to pause all of its funding, or continue to pause all of its funding, the implications and the impacts at WHO would be varied over the course of the next few years. That’s because the US government and WHO have a multifaceted relationship.

Dodson said.

Market implications

There will be more to this story over the coming days and weeks which will likely draw in questions over the current US administrations popularity in terms of this years elections.

Moreover, undermining the work of what is arguably the most important organisation during these times of the pandemic is likely playing into the hands of risk-off asset classes, such as gold. 

• Gold hits fresh multi-year highs, looks to $1800