Unequal COVID-19 vaccine distribution is a humanitarian crisis and an economic loss for rich countries
January 25, 2021: The Paris-based International Chamber of Commerce has commissioned a team of economists affiliated with Harvard University, the University of Maryland and Istanbul’s Koc University, to examine trade data across 35 industries in 65 countries, which explores the economic impacts of unequal COVID-19 vaccine distribution.
In the study’s most likely scenario, in which developing countries vaccinate half their populations by the end of 2021, the world economy would still absorb a blow of between $1.8 trillion and $3.8 trillion. More than half of the pain would be concentrated in wealthy countries, like the USA, Europe and Canada. These findings rebut the popular notion that sharing vaccines with poor countries is merely a form of charity.
Many developing countries, from Bangladesh to Tanzania to Peru, will likely have to wait until 2024 before fully vaccinating their populations. This is a humanitarian crisis that will cost thousands of lives and cause economic pain in both poor and rich countries. If people in developing countries remain out of work because of lockdowns required to choke off the spread of the virus, they will have less money to spend, reducing sales for exporters. Multinational companies in rich nations will also struggle to secure required parts, components and commodities.
Most international trade involves parts that are shipped from one country to another. Of the $18 trillion worth of goods that were traded in 2020, so-called intermediate goods represented $11 trillion, according to the Organization for Economic Cooperation and Development. The study finds that the continued pandemic in poor countries is likely to be worst for industries that are especially dependent on suppliers around the world, among them automotive, textiles, construction and retail, where sales could decline more than 5 percent.
As migrant workers from poor countries have lost jobs during the pandemic, they have not been able to send as much money home, a major blow to countries that have relied on these so-called remittances like the Philippines, Pakistan and Bangladesh.
The global recession has slashed demand for commodities, decimating copper producers like Zambia and the Democratic Republic of Congo, and countries dependent on oil like Angola and Nigeria. As Covid-19 cases have soared, that has depressed tourism, costing jobs and revenue in Thailand, Indonesia and Morocco.
The study reinforces call for rich countries to act to make vaccines available to low-income countries.