If poor countries go unvaccinated rich ones will pay, a study says

In monopolizing the supply of vaccines against Covid-19, wealthy nations are threatening more than a humanitarian catastrophe: The resulting economic devastation will hit affluent countries nearly as hard as those in the developing world.

This is the crucial takeaway from an academic study to be released Monday. In the most extreme scenario — with wealthy nations fully vaccinated by the middle of this year, and poor countries largely shut out — the study concludes that the global economy would suffer losses exceeding $9 trillion.

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Nearly half of those costs would be absorbed by wealthy countries like the United States, Canada and Britain.

In the scenario that researchers term most likely, in which developing countries vaccinate half their populations by the end of the year, 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.

Commissioned by the International Chamber of Commerce, the study concludes that equitable distribution of vaccines is in every country’s economic interest, especially those that depend most on trade. It amounts to a rebuke to the popular notion that sharing vaccines with poor countries is merely a form of charity.

“Clearly, all economies are connected,” said Selva Demiralp, an economist at Koc University in Istanbul who previously worked at the Federal Reserve in Washington, and one of study’s authors. “No economy will be fully recovered unless the other economies are recovered.”

In the realm of international commerce, there is no hiding from the coronavirus. Global supply chains that are vital to industry will continue to be disrupted so long as the virus remains a force.

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 in North America, Europe and East Asia. Multinational companies in advanced nations will also struggle to secure required parts, components and commodities.

“No economy, however big, will be immune to the effects of the virus until the pandemic is brought to an end everywhere,” said John Denton, secretary-general of the International Chamber of Commerce. “Purchasing vaccines for the developing world isn’t an act of generosity by the world’s richest nations. It’s an essential investment for governments to make if they want to revive their domestic economies.”