Contrary to how several developed countries in the West have been playing it, the scourge of vaccine nationalism will end up costing us all with developing countries hoped to be the ones driving economic growth after the COVID-19 pandemic.
In its ‘World Economic Outlook Update’ for January 2021, the International Monetary Fund (IMF) has said that there is a need for “strong multilateral cooperation” and the “universal distribution of vaccines…at affordable prices for all” to ensure that the global economy recovers from the shock provided by the pandemic.
In a recent study even the International Chamber of Commerce (ICC) Research Foundation has said that the “global economy stands to lose as much as $9.2 trillion if governments fail to ensure developing economy access to COVID-19 vaccines, as much as half of which would fall on advanced economies.”
The IMF and the ICC, the global voices for big business, have issued caution. “Amid exceptional uncertainty, the global economy is projected to grow 5.5% in 2021 and 4.2% in 2022,” the former has said. Developing countries are expected to be the major driving force behind the economic recovery with the developed markets expected to take more time to recover.
The fear is that developed countries will end up hoarding vaccines – much more than even necessary – to overcompensate out of a legitimate sense of fear.
“You put on your own first, and then we want to help others as quickly as possible,” Peter Marks from the US’ Food and Drug Administration (FDA) was quoted saying in June 2020. Marks was referencing an emergency situation in an airplane, exhorting people to put their own mask first before tending to others. Worryingly, he was part of the Trump administration’s team who looked after the initial phase of vaccine development for the US.
According to the ICC, as said above, the same attitude could cost the global economy up to $9.2 trillion.
A fraction of the projected loss will pay the $38 billion required for the World Health Organization’s (WHO) ‘The Access to COVID-19 Tools (ACT) Accelerator’, a program which has factored in the costs of procurement, storage and delivery for the entire world. “Strikingly, a $27.2 billion investment on the part of advanced economies—the current funding shortfall to fully capitalize the ACT Accelerator and its vaccine pillar COVAX—is capable of generating returns as high as 166x the investment,” the ICC study said.
A 166-time return would satisfy the most hard-nosed businessman. And co-operation, as exhorted by the IMF and the ICC, is necessary, especially in an inter-connected world where raw material and finished goods exchange hands at unforeseen speeds.
A recent ICC study titled ‘The Economic Case for Global Vaccinations’ says that it aims to “demonstrate the importance of making the vaccine globally available, not from a moral standpoint but from an economic one, by illustrating the large economic costs in the absence of global vaccinations. Ironically, a significant portion of these costs will be borne by the advanced countries, despite the fact that they might vaccinate most of their citizens by the summer of 2021. This is because advanced economies (AEs) are tightly connected to unvaccinated trading partners….Our findings extend this argument to the economies by showing that no economy fully recovers until every economy recovers.”
While the WHO has reiterated the need for a global effort, the Trump administration had been critical of it for “not being aggressive enough” in containing COVID-19 in April last year. The ICC is now repeating what the WHO had been saying all along.
The warning comes at a time when countries around the world are hoarding more vaccines than they may ever need. According to the Duke Global Health Institute (DGHI): “As of mid-January, more than 7 billion vaccine doses had been purchased globally and the lion’s share—4.2 billion doses—have gone to high-income countries.”
DGHI’s calculations suggest that the world may not be vaccinated fully even by 2024. The US, UK, and the European Union have reportedly bought two to three times the vaccines they need as insurance. “Canada has purchased enough to vaccinate its population five times over,” the DGHI said.
Over in India, the country has placed orders for 116.5 million doses, of which 100 million are for the Gamaleya National Center of Epidemiology and Microbiology’s Sputnik V vaccine, one which yet to be cleared by the Central Drugs Standard Control Organization.
The WHO’s Covax platform has targeted delivering two billion doses by 2021 with 1.8 billion of those for developing countries which will cover about 20% of their populations. It would be a better bet than the 2024 timeline predicted by the DGHI.