IMF’s top economist says Covid vaccines are the ‘main weapon’ to achieve a faster economic recovery

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A person receives a dose of the Oxford/AstraZeneca coronavirus disease vaccine at the Cacovid isolation centre, Mainland, Infectious disease hospital, Yaba, in Lagos, Nigeria.
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LONDON — With fears over “vaccine nationalism” steadily becoming a reality in 2021, experts have highlighted to CNBC why it’s in everybody’s interests to make sure adequately supplied inoculation programs are rolled out across the globe.  

“Low- and middle-income countries have had the challenge of getting vaccines because of the phenomenon of vaccine nationalism. Most of the developed countries have a lot of the vaccines,” Dr. Faisal Shuaib, CEO of Nigeria’s National Primary Health Care Development Agency, told CNBC last month.

Whereas high income nations have purchased more than 4.6 billion doses of Covid-19 vaccines, low income countries have bought 670 million doses, according to data from the Duke Global Health Innovation Center.

And while many western economies, such as the U.K. and the U.S., hope to vaccinate the vast majority of their populations in the coming months, some countries might not be able to achieve that before 2024, according to the same institution.

“So, if we are going to eradicate Covid-19 as one global community than it is important that every community has access to these vaccines. The virus doesn’t know any borders,” Shuaib said.

Health concerns

The coronavirus is an infectious disease, easy to spread. The latest variants of the virus are said to be even more contagious than the original strain.

“We now live in a global village, before you know it, the infection will go across to even developed countries. So from a scientific point of view it really doesn’t make sense to hold on to vaccines when there is no equity and fairness in the distribution globally,” Shuaib said.

But the issue of supporting low-income nations with vaccine supply goes beyond this. It is also relevant from an economic and geopolitical perspective.

Economic consequences

“The world economy is also interconnected and even countries that have responded fairly effectively to this virus like New Zealand or South Korea have suffered grievously in economic terms from this pandemic,” Thomas Bollyky, director of the global health program at the Council on Foreign Relations, told CNBC.

“That will continue to be the case, if this virus is raging in much of the world,” he said.

The International Monetary Fund had initially forecast a 3.4% rise in global output for 2020. But shortly after the pandemic hit, early in the year, the IMF cut its projection to a contraction of 3%, predicting it would be the worst economic shock since the 1930s.

In more recent calculations, the IMF estimated that global economic activity in fact fell by 3.3% during 2020, with the chances of an immediate recovery in 2021 threatened by renewed waves of infection and further mutations.

“The main weapon we have are vaccines,” IMF chief economist Gita Gopinath told CNBC on Wednesday.

“We are seeing virus mutations happening and for as long as many parts of the world remain unvaccinated, you are going to see many more of these mutations and that is a big concern for the global economy,” she said.

International cooperation

At the same time, the coronavirus crisis has also demanded more international cooperation.

Organizations, such as the World Health Organization and UNICEF, developed the Covax initiative in 2020 to support low-income nations in getting access to vaccines. But this has not been enough to ensure equitable access.

“If you have the money to buy, you’ll get more vaccine; if you have factories; if you have paid for some of the research and development; if you can block exports (or) put in place export bans — all of these factors really favour high income countries, but it is all of these things combined that have led us to the situation where you have the lion share of vaccines (that) does still sit with high income countries,” Suerie Moon, co-director of the Global Health Centre at the Graduate Institute of Geneva, told CNBC.

If we are unable, in the midst of a global crisis, to share a vaccine that is in every nations’ interest to share because it is the fastest way to bring the pandemic under control, what are the prospects of us cooperating on preventing future pandemics.
Thomas Bollyky
director of the global health program at the Council on Foreign Relations

The United States, for example, legislated in favor of vaccinating its population first before sending vaccines abroad. The European Union has also strengthened its policies to restrict the export of vaccines when pharmaceutical firms don’t fulfil deliveries to the bloc. The United Kingdom has not exported any Covid-19 shots. However, all the three regions have contributed to the funding of Covax.

“If we are unable, in the midst of a global crisis, to share a vaccine that is in every nations’ interest to share because it is the fastest way to bring the pandemic under control, what are the prospects of us cooperating on preventing future pandemics, what are the chances of us cooperating on climate change, on nuclear non-proliferation, anything that requires the nations of the world to trust one another and work together to make us all safer,” Bollyky said.

“If we cannot do it in this crisis, we have little hope in doing it in many other areas where we need to see that cooperation,” he said.

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