The global economy stands to lose up to $9.2 trillion if governments fail to ensure developing economies access Covid-19 vaccines, a new study commissioned by the International Chamber of Commerce (ICC) Research Foundation has found.
This means the situation could cost up to over 10 per cent of the $88 trillion global economy.
Titled "The Economic Case for Global Vaccinations”, the study published on January 25 shows that even advanced economies stand to lose trillions of USD through Covid-19 vaccine nationalism.
The Covid-19 pandemic had a devastating effect on lives and livelihoods in 2020, the study said, indicating that the arrival of effective vaccines can be a major game changer in mitigating the economic, social and health consequences of the virus in the year ahead.
However, it said, evidence to date suggests that access to these vaccines is likely to be highly uneven across countries.
It showed that advanced economies have in recent months pursued a policy of securing the global supply of frontrunner vaccines – as a result severely limiting their availability in emerging markets.
Moreover, the Access to Covid-19 Tools (ACT) Accelerator – the proven global platform to enable equitable access to Covid-19 test, treatments and vaccines – remains underfunded by the world’s largest economies, constraining its ability to procure vaccines at scale for the developing world.
The research shows that no economy can recover fully from the Covid-19 pandemic until vaccines are equally accessible in all countries.
It suggested that advanced economies that can vaccinate all of their citizens are shown to remain at risk of a sluggish recovery with a drag on GDP if infection continues to spread unabated in emerging markets, or if their trading partners do not have such access.
These losses, it revealed, dwarf the donor finance needed to enable vaccines to be procured for everyone, everywhere – making a clear "investment case” for full capitalisation of the ACT Accelerator and a coordinated global approach to distribution.
It noted that a US$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 166 times the investment.
"No economy can fully recover until we have global equitable access to vaccines, therapeutics and diagnostics. The path we are on leads to less growth, more deaths, and a longer economic recovery,” said one of the study authors, Ṣebnem Kalemli-Özcan – Neil Moskowitz Endowed Professor of Economics and Finance at the University of Maryland, College Park.
Welcoming this study as latest contribution on the economic impacts of a fully funded ACT Accelerator, Dr Tedros Adhanom Ghebreyesus, Director-General of the World Health Organization (WHO) said that he believes the world faces a catastrophic moral failure in equal access to the tools to combat the pandemic.
"This research shows a potentially catastrophic economic failure. The progress made by the ACT Accelerator shows solidarity in beating this virus,” said.
"The longer we wait to provide vaccines, tests, and treatments to all countries, the faster the virus will take hold, the potential for more variants will emerge, the greater the chance today’s vaccines could become ineffective, and the harder it will be for all countries to recover. Truly, no-one is safe until everyone is safe,” he observed.
So far, over 99.7 million cases of Covid-19 and over 2.1 million deaths caused by this infectious viral respiratory disease have been reported, according to data from Johns Hopkins University.
Currently, Ghebreyesus said, rich countries are rolling out vaccines, while the world’s least-developed countries watch and wait.
Some light at the end of the tunnel
Meanwhile, some good developments have happened, boosting hopes for the global vaccination efforts and economic recovery.
They include the US re-joining the World Health Organization last week under Joe Biden’s administration after the US’s former President Donald Trump pulled this largest economy in the world out of the UN health agency last year. The US is the WHO’s top funder with between $400 million and $500 million, or about 17 percent of WHO’s annual funding.
The COVAX Facility announced on Friday, January 22, that it was on track to deliver at least 2 billion doses of vaccines by the end of the year, including at least 1.3 billion doses to 92 lower income economies, the coalition has said.
The development was confirmed after officials at the facility signed an advance purchase agreement with Pfizer for up to 40 million doses of the Pfizer-BioNTech Covid-19 vaccine candidate, which has already received WHO emergency use listing.
COVAX – which is part of Access to Covid-19 Tools Accelerator (ACT Accelerator) is the global initiative to ensure rapid and equitable access to Covid-19 vaccines for all countries, regardless of income level.