Vaccine inequality could cost the global economy trillions: report

Vaccine inequality could cost the global economy trillions: report

A woman reacts with a dose of the Kovidshield vaccine against Covid-19 at a vaccination center in Mumbai on August 12, 2021.

Puneet Paranjpe | AFP | Getty Images

The Economist Intelligence Unit said in a report that the global economy is expected to lose trillions of GDP due to the delay in the vaccination deadline, with developing economies suffering most of the losses due to the uneven deployment.

Countries that are unable to immunize 60% of their population by mid-2022 will lose $ 2.3 trillion between 2022 and 2025, as predicted by the EIU.

“Emerging countries will bear about two-thirds of these losses, and their economic convergence with more developed countries will be delayed,” wrote Agathe Demarais, director of global forecasts at EIU.

The vaccine access gap is unlikely to ever be closed.

agathe demarais

Economist Intelligence Unit Director of Global Forecasts

Asia in absolute terms will be “by far the most severely affected continent”, with losses estimated at $ 1.7 trillion, or 1.3% of the region’s estimated GDP. Sub-Saharan African countries will lose around 3% of their projected GDP, the highest in percentage terms, according to the report.

“These estimates are striking, but they only partially capture the missed economic opportunities, especially in the long term,” the EIU said, noting that the forecast did not take into account the impact of the pandemic on education. was gone. Rich countries turned to distance learning during the lockdown, but many developing countries did not have that option.

Data compiled by Johns Hopkins University showed that more than 213 million people have been infected with COVID-19, and at least 4.4 million have died during the pandemic.

rich-poor divide

Rich countries are way ahead in their COVID vaccination rates, switching to booster doses and reopening their economies, while poor countries are far behind in the vaccination race.

According to Our World in Data, around 5 billion doses of the vaccine have been administered worldwide as of August 23, but only 15.02 million of those doses have been administered in low-income countries.

“Vaccination campaigns in low-income economies are progressing at an icy pace,” the EIU report said.

The report indicates that the disparity in vaccines is due to hesitation due to global shortages of production capacity and vaccine raw materials, logistical difficulties in transporting and storing vaccines and mistrust of vaccines.

Many developing countries also cannot afford vaccines for their residents and turn to donations from rich countries, but the global initiative has not been entirely successful in getting the vaccines to those in need.

“The vaccine access gap is unlikely to ever end,” EIU’s Demaris said in a statement. COVAX, a WHO-sponsored initiative to ship vaccines to emerging economies, has fallen short of expectations (moderately). “

“Despite flattering press releases and generous pledges, even rich country charities meet only a fraction of the need – and often they are not even distributed,” she wrote.

According to the UNICEF tracker, Covax aims to deliver around 2 billion doses of vaccine this year, but has only shipped 217 million doses so far.

The Associated Press reported that part of the supplies went to developed countries such as the United Kingdom, Canada, Australia and New Zealand.

effect of inequalities

The EIU said poorer countries are likely to recover slowly from the pandemic, especially if restrictions were to be reimposed due to low vaccination rates.

The report says tourists may also avoid countries with large unaffiliated populations due to security concerns, while political outrage is likely to grow. Residents may be unhappy that their local governments have not been able to provide vaccines and view wealthy states as vaccine grabbers.

“Social unrest is very likely in the months and years to come,” Demaris wrote.

Additionally, as the viral situation continues to evolve, herd immunity is out of reach due to the highly transmissible delta variant, and vaccinations to reduce severe cases, hospitalizations and deaths are “more modest”. according to the report. “requests.

Political leaders were busy responding to short-term emergencies such as a rapid surge in infection rates, but a longer-term strategy is now needed, Demaris wrote.

“Here, again, the opposite of the rich and the poor will occur: rich and vaccinated states will have options, while the uneducated poor will not,” she said.

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