September 23, 2021

The value of universal vaccination is so great that even the IMF is being forced to rethink its callousness to the global south

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It could cost as much as $5 trillion if rich countries don’t help vaccinate the rest of the world.



By Prabir Purkayastha / Globetrotter

The world seems to have turned topsy-turvy when the undisputed voices of global capital start talking about the virtues of “cooperation” among nations and “universal distribution of vaccines” to deal with the COVID-19 pandemic.

The International Monetary Fund (IMF), in its January 2021 report, talks about “strong multilateral cooperation” and “universal distribution of vaccines… at affordable prices for all” for the global economy to recover.

Meanwhile, the International Chamber of Commerce (ICC) Research Foundation has commissioned a study that shows that even in their self-interest, rich countries need to share vaccines with poorer countries instead of the vaccine-grabbing they have been doing.

Let us first look at the numbers that the IMF and the ICC, the self-avowed voice of big business, have produced. The IMF’s World Economic Outlook Update says that in 2021, the world GDP will recover from the 3.5 percent fall it suffered in 2020 and is “projected to grow 5.5 percent in 2021.” The GDP will be pulled up largely by a recovery in emerging markets and developing economies, while the recovery will be considerably slower for advanced economies (read: the club of rich countries).

In the United States, the Donald Trump administration had framed the philosophy of selfishness as a virtue in vaccine sharing, comparing it to putting on oxygen masks in the depressurized cabin of an aircraft: “You put on your own first, and then… help others.” According to the ICC study, such a me-first policy will result in the rich countries losing between $203 billion and $5 trillion.

Only a fraction of this cost—$38 billion—will pay fully for the World Health Organization’s entire Access to COVID-19 Tools (ACT)-Accelerator program that is meant to support vaccine procurement, cold chain requirements and delivery costs for everyone. The ICC says, “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.”

In straightforward language, the return on capital is the highest if the rich countries support universal vaccination at the global level. Nothing else that I know can generate an astronomical 166-time return on investments.

Today the global economy is interconnected via supply chains, both for imports and exports. The premise for the ICC model is that no nation is an island. All countries need raw, intermediate and finished goods for industries and to meet the needs of their people and need to export these goods to grow. The composition of these goods differs from country to country, but whether they are advanced or developing, all economies are linked to one another.

Starting with this premise, the ICC report, “The Economic Case for Global Vaccinations,” says its aim is 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… Regarding the pandemic, World Health Organization (WHO) Director Dr. Tedros Ghebreyesus and the President of the European Commission Dr. Ursula von der Leyen noted that ‘None of us will be safe until everyone is safe.’ Our findings extend this argument to the economies by showing that no economy fully recovers until every economy recovers.”

While the WHO has been emphasizing the need for a “world effort” to fight COVID-19, the Trump administration had criticized the organization for “not being aggressive enough in containing the spread” of the virus in April 2020. Now the club of big capital, the ICC, is repeating the WHO’s words not only as public health truth but also as hard-headed economic truth. Strange as it might seem, the path of enlightened self-interest for capitalism is the same as altruism!

The picture on the vaccine front is bleak as vaccine nationalismoverwhelms most countries. I have previously noted how skewed the vaccine-supply scenario is. 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.”

By DGHI’s calculations, the total global population will not have vaccines by even 2024, let alone the end of 2021, as required for a global economic recovery. The figures are even more skewed if we look at individual countries. The United States, the UK, and the European Union have bought two to three times the vaccines they need as insurance; DGHI reports, “Canada has purchased enough to vaccinate its population five times over.”

Contrary to earlier reports, India’s figures are only a small fraction of what it needs, and it is not one of the countries with huge advance orders. In the figures reported by DGHI, India has placed orders for 116.5 million doses, of which 100 million are supposed to be for the Gamaleya National Center of Epidemiology and Microbiology’s Sputnik V vaccine. This vaccine is yet to be cleared by India’s drug regulator, the Central Drugs Standard Control Organization. The only confirmed orders of CDSCO-approved vaccines that India has are 11 million from the Serum Institute for Oxford-AstraZeneca’s Covishield vaccine and 5.5 million of Bharat Biotech’s Covaxin.

The WHO’s Covax platform, launched with the support of philanthropic private funds, meanwhile, has a target of delivering 2 billion vaccine doses by 2021—with about 1.8 billion of those doses going to developing countries, covering one-fifth of each of their populations. Even with these modest targets, the Covax platform will only be able to reach about 50 percent of its target and is woefully short of funds as rich countries focus on securing two to three times what they need.

Bourgeois ideologues have been preaching the virtue of selfishness as a road to prosperity for so long that it is now enthroned as an economic truth in the rich countries. Forget sharing vaccines; large sections of the right in these countries oppose even wearing masks, from a perverted view of selfishness as individual liberty. Therefore, to suggest loosening the purse strings for the benefit of the poor, even if it means saving their economies, smacks to them of dreaded socialism. Or as the old Cold War slogan went in the U.S., “Better dead than red.”

Global capital needed an existential crisis—be it the pandemic or global warming—to make clear to the world what the left has been saying all along. The road to perdition is a common one; we either flourish together or perish as a species. To quote 17th-century poet John Donne, with which the ICC report opens, “No man is an island entire of itself; every man is a piece of the continent, a part of the main… therefore never send to know for whom the bell tolls; it tolls for thee.”

This article was produced in partnership by Newsclick and Globetrotter.

Prabir Purkayastha is the founding editor of Newsclick.in, a digital media platform. He is an activist for science and the free software movement.

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