Vaccine inequality could cost the global economy trillions, report finds

The world economy is set to lose trillions in GDP because of delayed vaccination timelines, with developing economies bearing most of the losses due to the uneven rollout, the Economist Intelligence Unit said in a report.

Countries that are not able to inoculate 60% of their population by mid-2022 will lose $2.3 trillion between 2022 and 2025, the EIU predicted.

“Emerging countries will shoulder around two-thirds of these losses, further delaying their economic convergence with more developed countries,” wrote Agathe Demarais, the EIU’s global forecasting director.

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

“These estimates are striking but they only partially capture missed economic opportunities, especially in the long term,” the EIU said, noting that the pandemic’s effect on education was not taken into account in this forecast. Richer countries pivoted to remote learning during lockdowns, but many in the developing world did not have that option.

More than 213 million people have been infected with Covid-19, and at least 4.4 million have died during the pandemic, data compiled by Johns Hopkins University showed.

Wealthy nations are pulling far ahead in their Covid inoculation rates, moving toward booster doses and reopening their economies, while poorer countries are lagging drastically behind in the race to get vaccinated.

Around 5 billion doses of the vaccine have been administered globally as of Aug. 23, but only 15.02 million of those doses were in low-income countries, according to Our World in Data.

“Vaccination campaigns are progressing at a glacial pace in lower-income economies,” the EIU report said.

The report said vaccine inequity emerged because of a global shortage of production capacity and vaccine raw materials, logistical difficulties in transporting and storing the vaccines, and hesitancy because of mistrust of the shots.

Many developing countries also cannot afford the vaccines for their residents and looked to donations from richer countries, but global initiatives have not been entirely successful in supplying shots to those who need it.

“There is little chance that the divide over access to vaccines will ever be bridged,” the EIU’s Demarais said in a statement. “COVAX, the WHO-sponsored initiative to ship vaccines to emerging economies, has failed to live up to (modest) expectations.”

“Despite flattering press releases and generous promises, donations from rich countries have also covered only a fraction of requirements—and, often, they are not even delivered,” she wrote.

Covax aimed to deliver around 2 billion doses of vaccine this year, but has only shipped 217 million doses so far, according to UNICEF’s tracker.

Some of the supplies went to developed countries such as the U.K., Canada, Australia and New Zealand, the Associated Press reported.

Poorer countries are likely to recover from the pandemic more slowly, especially if restrictions need to be reimposed because of lower vaccination rates, the EIU said.

Tourists may also avoid countries with large unvaccinated populations due to safety concerns, while political resentment will likely grow, the report said. Residents could be unhappy that their local governments were unable to provide vaccines, and see richer states as hoarders of the shots.

“Bouts of social unrest are highly likely in the coming months and years,” Demarais wrote.

Additionally, the virus situation continues to evolve, with herd immunity likely out of reach because of the highly transmissible delta variant, and vaccination seeking “more modestly” to reduce severe cases, hospitalizations and deaths, the report said.

Political leaders were busy responding to short-term emergencies such as rapid accelerations in infection rates, but now need to design a longer-term strategy, Demarais wrote.

“Here, again, the rich-poor contrast will be stark: vaccinated, richer states will have choices, while unvaccinated, poorer ones will not,” she said.