One Vaccine Side Effect: Global Economic Inequality

LONDON — The end of the pandemic is finally in view. So is rescue from the most traumatic global economic catastrophe since the Great Depression. As Covid vaccines enter the bloodstream, recovery has become reality.

But the benefits will be far from equally apportioned. Wealthy nations in Europe and North America have secured the bulk of limited stocks of vaccines, positioning themselves for starkly improved economic fortunes. Developing countries — home to most of humanity — are left to secure their own doses.

The lopsided distribution of vaccines appears certain to worsen a defining economic reality: The world that emerges from this terrifying chapter in history will be more unequal than ever. Poor countries will continue to be ravaged by the pandemic, forcing them to expend meager resources that are already stretched by growing debts to lenders in the United States, Europe and China.

The global economy has long been cleaved by profound disparities in wealth, education and access to vital elements like clean water, electricity and the internet. The pandemic has trained its death and destruction of livelihood on ethnic minorities, women and lower-income households. The ending is likely to add another division that could shape economic life for years, separating countries with access to vaccines from those without.

“It’s clear that developing countries, and especially poorer developing countries, are going to be excluded for some time,” said Richard Kozul-Wright, director of the division on globalization and development strategies at the United Nations Conference on Trade and Development in Geneva. “Despite the understanding that vaccines need to be seen as a global good, the provision remains largely under control of large pharmaceutical companies in the advanced economies.”

International aid organizations, philanthropists and wealthy nations have coalesced around a promise to ensure that all countries gain the tools needed to fight the pandemic, like protective gear for medical teams as well as tests, therapeutics and vaccines. But they have failed to back their assurances with enough money.

The leading initiative, the Act-Accelerator Partnership — an undertaking of the World Health Organization and the Bill and Melinda Gates Foundation, among others — has secured less than $5 billion of a targeted $38 billion.

A group of developing countries led by India and South Africa sought to increase the supply of vaccines by manufacturing their own, ideally in partnership with the pharmaceutical companies that have produced the leading versions. In a bid to secure leverage, the group has proposed that the World Trade Organization waive traditional protections on intellectual property, allowing poor countries to make affordable versions of the vaccines.

The W.TO. operates on consensus. The proposal has been blocked by the United States, Britain and the European Union, where pharmaceutical companies wield political influence. The industry argues that patent protections and the profits they derive are a requirement for the innovation that yields lifesaving medicines.

Proponents of suspending patents note that many blockbuster drugs are brought to market via government-financed research, arguing that this creates an imperative to place social good at the heart of policy.

“The question is really, ‘Is this a time to profit?’” said Mustaqeem De Gama, councilor at the South African mission to the W.T.O. in Geneva. “We have seen governments closing down economies, limiting freedoms, yet intellectual property is seen to be so sacrosanct that this cannot be touched.”

Many economists assume that as the vaccines ease fear, people will surge toward experiences that have been off limits, thronging restaurants, sporting events and holiday destinations. Households have saved up as they have canceled vacations and entertained themselves at home.

“If people’s spirits are eased, and some of the restrictions are lifted, you could see a spending splurge,” said Ben May, a global economist at Oxford Economics in London. “A lot of this will be about the speed and degree to which people go back to more normal behaviors. That’s very hard to know.”

“The international response to the pandemic has essentially been pitiful,” said Mr. Kozul-Wright at the U.N. trade body. “We are worried that as we move into the distribution of the vaccines, we are going to see the same again.”

One element of the Act-Accelerator partnership, known as Covax, is meant to allow poor countries to buy vaccines at affordable prices, but it collides with the reality that production is both limited and controlled by profit-minded companies that are answerable to shareholders.

“Most people in the world live in countries where they rely on Covax for access to vaccines,” said Mark Eccleston-Turner, an expert on international law and infectious diseases at Keele University in England. “That is an extraordinary market failure. Access to vaccines is not based on need. It’s based on the ability to pay, and Covax doesn’t fix that problem.”

On Dec. 18, Covax leaders announced a deal with pharmaceutical companies aimed at providing low- and middle-income countries with nearly two billion doses of vaccines. The arrangement, which centers on vaccine candidates that have not yet gained approval, would provide enough doses to vaccinate one-fifth of the populations in 190 participating countries by the end of next year.

India is home to pharmaceutical manufacturers that are producing vaccines for multinational companies including AstraZeneca, but its population is unlikely to be fully vaccinated before 2024, according to TS Lombard, an investment research firm in London. Its economy is likely to remain vulnerable.

Even if masses of people in poor countries do not gain access to vaccines, their economies are likely to receive some spillover benefits from wealthier nations’ return to normal. In a world shaped by inequality, growth can coincide with inequity.

As consumer power resumes in North America, Europe and East Asia, that will drive demand for commodities, rejuvenating copper mines in Chile and Zambia, and lifting exports of soybeans harvested in Brazil and Argentina. Tourists will eventually return to Thailand, Indonesia and Turkey.

Source link Most Shared

Be the first to comment

Leave a Reply

Your email address will not be published.