By monopolizing the supply of vaccines against Covid-19, rich countries threaten 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 most important takeaway from an academic study released on Monday. In the most extreme scenario – with affluent countries fully vaccinated by the middle of this year and poor countries largely excluded – the study concludes that the world economy would suffer losses of more than $ 9 billion, an amount greater than the annual production of Japan and Germany. combined.
Nearly half of the cost would be absorbed by affluent countries such as the United States, Canada and Britain.
In the scenario that researchers are likely to cite, in which developing countries inoculate half of their population by the end of the year, the world economy will continue to pick up between $ 1.8 billion and $ 3.8 billion. More than half of the pain would be concentrated in affluent countries.
Commissioned by the International Chamber of Commerce, the study concludes that fair distribution of vaccines is in each country’s economic interest, especially those that are most dependent on trade. This amounts to a rebuke to the common belief that sharing vaccines with poor countries is merely a form of charity.
“It’s clear that all economies are interconnected,” said Selva Demiralp, an economist at Koc University in Istanbul who previously worked for the Federal Reserve in Washington and one of the study’s authors. “No economy will be fully recovered unless the other economies are restored.”
Ms Demiralp noted that a global philanthropic initiative known as the ACT Accelerator – which aims to provide pandemic resources to developing countries – has secured commitments for less than $ 11 billion to a target of $ 38 billion. The study gives the economic rationale to reduce the gap. The remaining $ 27 billion appears to be a huge amount, but it is a small amount compared to the cost of continuing the pandemic.
The general idea that the pandemic does not respect borders or racial and class divisions has been promoted by corporate executives and experts. This comforting concept is rejected by the fact that Covid-19 trained his death and destruction of livelihoods among low-wage service workers, and especially racial minorities, while white-collar workers were able to work largely safely from home, and some of the richest people in the world can ride out the pandemic on yachts and private islands.
But in the field of international trade, there is no hiding place for the coronavirus as the study brings home. Instead, there are global supply chains that manufacture the parts for the industry, and this will continue to be interrupted as long as the virus remains a force.
A team of economists from Koc University, Harvard University and the University of Maryland examined trade data across 35 industries in 65 states and conducted an extensive study into the economic consequences of unequal distribution of vaccines.
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Answers to your vaccine questions
Although the exact order of vaccine recipients may vary by state, medical workers and residents of long-term care institutions are likely to be first. If you want to understand how this decision is made, this article will help.
Life will only become normal when society as a whole gets enough protection against the coronavirus. Once countries approve a vaccine, they will be able to vaccinate at most a few percent of their citizens in the first few months. The unvaccinated majority will still be vulnerable to infection. A growing number of coronavirus vaccines offer strong protection against disease. But it is also possible for people to spread the virus without even knowing they are infected, because they experience only mild symptoms or not at all. Scientists do not yet know whether the vaccination also blocks the transmission of the coronavirus. For now, even vaccinated people will have to wear masks, crowds inside, and so on. Must avoid. Once enough people are vaccinated, it will be very difficult for the coronavirus to find vulnerable people who can become infected. Depending on how quickly we as a society reach the goal, life by the fall of 2021 could begin to approach something as normal.
Yes, but not forever. The two vaccines that may be approved this month clearly protect people against Covid-19. However, the clinical trials that have yielded these results have not been designed to determine whether people who have been vaccinated can still spread the coronavirus without developing symptoms. It remains a possibility. We know that people who are naturally infected by the coronavirus can spread it while experiencing no cough or other symptoms. Researchers will study this question intensively as the vaccines begin. Meanwhile, even vaccinated people will have to think of themselves as possible distributors.
The Pfizer and BioNTech vaccine is delivered like a shot in the arm, like other typical vaccines. The injection will not be different from what you received before. Tens of thousands of people have already received the vaccines, and none of them have reported serious health problems. But some of them felt transient discomfort, including pains and flu-like symptoms that usually last a day. It is possible that people after the second shot may be planning to take a day off from work or school. Although these experiences are not pleasant, it is a good sign: it is the result of your own immune system that encounters the vaccine and produces a powerful response that will provide long-lasting immunity.
No. The Moderna and Pfizer vaccines use a genetic molecule to replenish the immune system. That molecule, known as mRNA, is eventually destroyed by the body. The mRNA is packaged in an oily bubble that can fuse with a cell so that the molecule can slide. The cell uses the mRNA to make proteins from the coronavirus, which can stimulate the immune system. Each of our cells can contain hundreds of thousands of mRNA molecules at any one time that they produce to make their own proteins. Once those proteins are made, our cells cut the mRNA with special enzymes. The mRNA molecules that make up our cells can only survive for a few minutes. The mRNA in vaccines is designed to resist the cells’ enzymes a little longer, allowing the cells to make extra viral proteins and trigger a stronger immune response. But the mRNA can only take a few days at most before being destroyed.
If people in developing countries stay out of work due to restrictions needed to stop the spread of the virus, they will spend less money, reducing sales to exporters in North America, Europe and East Asia. Multinational companies in advanced countries will also struggle to secure the necessary parts, components and commodities.
The crux 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. According to the Organization for Economic Co-operation and Development, the so-called interim goods traded $ 11 billion in goods traded last year.
The study finds that the continuing pandemic in poor countries is likely to be worst for industries that are particularly dependent on suppliers around the world, including automotive, textile, construction and retail businesses, where sales could fall by more than 5 percent .
The findings add a complicated layer to the basic assumption that the pandemic will leave the world economy more unequal than ever. While this may seem true, one notable form of inequality – access to vaccines – can pose universal problems.
In an extraordinary testament to the innovative capabilities of the world’s most capable scientists, some of the leading pharmaceutical companies have thought of life-saving vaccines in a small fraction of the time possible. But the richest countries in North America and Europe locked up orders for most of the stock – enough to vaccinate two and three times their population – and left poor countries scrambling to secure their share.
Many developing countries, from Bangladesh to Tanzania to Peru, are likely to have to wait until 2024 before fully vaccinating their populations.
The initiative to provide poor countries with additional resources was boosted when President Biden took office. The Trump administration did not contribute to the case. Mr. Biden’s chief medical officer for the pandemic, dr. Anthony S. Fauci, immediately announced that the United States would participate in the campaign to share vaccines.
In contrast to the trillions of dollars spent by governments in affluent countries to rescue companies and workers affected by the health emergency and the weakening economic downturn, developing countries have struggled to respond.
As migrant workers from poor countries lost jobs during the pandemic, they could not send as much money home, which dealt a huge blow to countries that relied on these so-called money payments such as the Philippines, Pakistan and Bangladesh.
The global recession has reduced demand for commodities, reducing copper producers such as Zambia and the Democratic Republic of Congo, and oil-dependent countries such as Angola and Nigeria. As Covid-19 cases skyrocketed, it suppressed tourism, which cost jobs and incomes in Thailand, Indonesia and Morocco.
Many poor countries have entered the pandemic with debt burdens that have taken up much of their government revenue, limiting their spending on health care. Private creditors refused to participate in a modest debt-suspension program by the Group of 20. The World Bank and the International Monetary Fund both promised great relief, but could not yield a significant dollar.
It also appears to be changing as new leadership takes over Washington. The Trump administration has opposed a proposed $ 500 million expansion of so-called special drawing rights with the IMF, a reserve asset that governments could trade for hard currency. The rise of mr. Biden has bolstered hopes among fund members that his administration will support the expansion. Democrats in Congress – who are now in charge of both chambers – have shown support for a measure that will force the Treasury to act.
In capitals such as Washington and Brussels, the discussion on support for the developing world is still set in moral terms. Leaders have debated how much they can save to help the planet’s less privileged communities while mostly caring for their own people.
The study challenges the framework. Failure to ensure that people in the developing world have access to vaccines leads to the conclusion that leaders in the richest countries are damaging their own happiness.
“No economy, no matter how large, will be immune to the effects of the virus until the pandemic comes to an end everywhere,” said John Denton, secretary general of the International Chamber of Commerce. ‘Buying vaccines for the developing world is not an act of generosity by the richest countries in the world. It is an essential investment that governments must make if they are to revive their domestic economy. ”