By monopolizing the supply of vaccines against Covid-19, wealthy nations are threatening more than a humanitarian catastrophe: the resulting economic devastation will hit affluent countries almost as hard as those in the developing world.
This is the crucial conclusion of an academic study to be launched on Monday. In the most extreme scenario – with rich nations fully vaccinated in the middle of this year and poor countries largely excluded – the study concludes that the global economy would suffer losses in excess of $ 9 trillion, a sum greater than Japan’s annual production and Germany combined.
Almost half of these costs would be absorbed by rich countries like the United States, Canada and Great Britain.
In the scenario that researchers call the most likely, in which developing countries vaccinate half of their populations by the end of the year, the world economy would still absorb a blow between $ 1.8 trillion and $ 3.8 trillion. More than half of the pain would be concentrated in rich countries.
Commissioned by the International Chamber of Commerce, the study concludes that equitable distribution of vaccines is in the economic interest of all countries, especially those most dependent on trade. This amounts to a rebuke to the popular notion that sharing vaccines with poor countries is just a form of charity.
“Clearly, all economies are connected,” said Selva Demiralp, an economist at Koc University in Istanbul who previously worked at the Federal Reserve in Washington and one of the study’s authors. “No economy will be fully recovered unless the other economies are recovered.”
Ms. Demiralp noted that a global philanthropic initiative known as the ACT Accelerator – which aims to provide pandemic resources to developing countries – secured commitments of less than $ 11 billion for a goal of $ 38 billion. The study presents the economic justification for closing the gap. The remaining $ 27 billion may, at first glance, seem like a huge sum, but it is a pittance compared to the costs of allowing the pandemic to continue.
The common idea that the pandemic does not respect borders or racial and class divisions was promoted by chief executives of companies and specialists. This comforting concept was contradicted by the reality that Covid-19 trained his death and destruction of livelihoods for low-income service workers, especially racial minorities, while administrative officials were able to work largely safely at home, and some of the richest people in the world can face the pandemic on private yachts and islands.
But, in the realm of international trade, there is no way to hide from the coronavirus, as the study shows. Instead, there are global supply chains that produce individual parts for the industry and that will continue to be stopped as long as the virus remains a force.
A team of economists affiliated with Koc University, Harvard University and University of Maryland examined commercial data in 35 industries in 65 countries, producing an extensive exploration of the economic impacts of uneven vaccine distribution.
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Answers to your vaccine questions
While the exact order of vaccine recipients may vary by state, most are likely to put medical professionals and residents of long-term care institutions first. If you want to understand how this decision is being made, this article will help you.
Life will only return to normal when society as a whole obtains sufficient protection against the coronavirus. Once countries authorize a vaccine, they will only be able to vaccinate a few percent of their citizens, at most, within the first two months. The unvaccinated majority will still remain vulnerable to infection. An increasing number of coronavirus vaccines are showing robust protection against disease. But it is also possible for people to spread the virus without even knowing they are infected, because they have only mild symptoms or none at all. Scientists still do not know whether vaccines also block coronavirus transmission. So for now, even vaccinated people will need to wear masks, avoid crowds indoors and so on. Once enough people are vaccinated, it will be very difficult for the coronavirus to find vulnerable people to infect. Depending on how quickly we, as a society, achieve this goal, life may begin to approach something normal in the fall of 2021.
Yes, but not forever. The two vaccines that will potentially be authorized this month clearly protect people from getting sick with Covid-19. But the clinical tests that provided these results were not designed to determine whether vaccinated people could still spread the coronavirus without developing symptoms. This remains a possibility. We know that people naturally infected with the coronavirus can transmit it as long as they have no cough or other symptoms. Researchers will be studying this issue intensively as vaccines are launched. In the meantime, even vaccinated people will need to consider possible spreaders.
The Pfizer and BioNTech vaccine is given as an injection into the arm, like other typical vaccines. The injection will not be different from the one you took before. Tens of thousands of people have already received the vaccines and none have reported serious health problems. But some of them experienced short-term discomfort, including pain and flu symptoms that usually last for a day. People may need to plan a day off from work or school after the second injection. Although these experiences are not pleasant, they are a good sign: they are the result of your own immune system facing the vaccine and developing a potent response that will provide lasting immunity.
No. The Moderna and Pfizer vaccines use a genetic molecule to prepare the immune system. This molecule, known as mRNA, is eventually destroyed by the body. The mRNA is packaged in an oily bubble that can fuse with a cell, allowing the molecule to slide inward. The cell uses mRNA to make proteins from the coronavirus, which can stimulate the immune system. At any given time, each of our cells can contain hundreds of thousands of mRNA molecules, which they produce to make their own proteins. After these proteins are made, our cells slice up the mRNA with special enzymes. The mRNA molecules that our cells make can survive just a matter of minutes. The mRNA in vaccines is designed to resist the cell’s enzymes a little more, so that cells can produce extra proteins from the virus and stimulate a stronger immune response. But mRNA can only last a few days, at most, before they are destroyed.
If people in developing countries remain out of work because of the blockages needed to prevent the virus from spreading, they will have less money to spend, reducing sales to exporters in North America, Europe and East Asia. Multinational companies in advanced nations will also find it difficult to secure the necessary parts, components and commodities.
At the heart of the story is the reality that most international trade does not involve finished goods, but parts that are shipped from one country to another to be folded into products. Of the $ 18 trillion in goods traded last year, so-called intermediate goods accounted for $ 11 trillion, according to the Organization for Economic Cooperation and Development.
The study concludes that the continuing pandemic in poor countries is likely to be worse for industries that rely especially on suppliers around the world, including automotive, textiles, construction and retail, where sales may fall by more than 5%.
The findings add a complicated layer to the basic assumption that the pandemic will make the world economy more unequal than ever. While this seems true, a marked form of inequality – access to vaccines – can pose universal problems.
In extraordinary testimony to the innovative capabilities of the world’s most qualified scientists, some of the leading pharmaceutical companies have produced life-saving vaccines in a small fraction of the time considered possible. But the wealthiest countries in North America and Europe closed orders for most of the supply – enough to vaccinate two or three times their population – leaving poor countries struggling to secure their share.
Many developing countries, from Bangladesh to Tanzania and Peru, are likely to have to wait until 2024 before fully vaccinating their populations.
The initiative to provide additional resources to poor countries gained momentum with the inauguration of President Biden. The Trump administration did not contribute to the cause. Biden’s medical director for the pandemic, Dr. Anthony S. Fauci, promptly announced that the United States would join the campaign to share vaccines.
In contrast to the trillions of dollars that rich country governments have spent to rescue companies and workers hurt by the health emergency and the violent economic crisis, developing countries have struggled to respond.
As migrant workers from poor countries lost jobs during the pandemic, they were unable to send so much money home, giving a major blow to countries that depended on these so-called remittances, such as the Philippines, Pakistan and Bangladesh.
The global recession has reduced demand for commodities, decimating copper producers like Zambia and the Democratic Republic of Congo, and oil-dependent countries like Angola and Nigeria. As the Covid-19 cases soared, it depressed tourism, costing jobs and revenues in Thailand, Indonesia and Morocco.
Many poor countries entered the pandemic with debt that absorbed much of the government’s revenue, limiting their spending on health. Private creditors refused to participate in a modest debt suspension program forged by the Group of 20. The World Bank and the International Monetary Fund promised great relief, but failed to produce significant dollars.
This also appears to be changing as new leadership takes over Washington. The Trump administration has opposed a proposed $ 500 million expansion of the so-called IMF special drawing rights, a reserve asset that governments can exchange for hard currency. Biden’s rise has raised hopes among fund members that his government will support the expansion. Democrats in Congress – now in control of both chambers – signaled support for a move that would compel the Treasury to act.
Still, in capitals like Washington and Brussels, the discussion of support for the developing world has been framed in moral terms. Leaders have debated how much they can spend to help the less fortunate communities on the planet while taking care of their own people.
The study challenges this picture. By failing to ensure that people in the developing world have access to vaccines, he concludes, the leaders of the wealthiest nations are hurting their own fortunes.
“No economy, no matter how big, will be immune to the effects of the virus until the pandemic ends everywhere,” said John Denton, secretary general of the International Chamber of Commerce. “Buying vaccines for the developing world is not an act of generosity from the richest nations in the world. It is an essential investment for governments to make if they want to revive their domestic economies. “