With more than 50% of all COVID-19 vaccines produced so far being purchased by a small group of high-income countries (HICs), many of the world’s poorest countries with developing economies will have less than a fifth of their population vaccinated by the end of 2021. An International Chamber of Commerce study determined that the unequal distribution of COVID-19 vaccines will cost between $1.8 trillion and $3.8 trillion globally, while vaccinating the most vulnerable fifth of the world’s population, covering health care workers and the elderly, would cost less than $40 billion.
Vaccinating everyone on earth would therefore cost less than $200 billion. Further, over 50% of the cost of not vaccinating everyone would be paid for by HICs due to decreases in trade with developing economies. While bilateral agreements have resulted in HICs receiving the majority of COVID-19 vaccine doses, it is in the best economic interest of HICs to support COVID-19 vaccine distribution in developing nations.
High vaccination rates in only HICs will not engender a successful economic recovery, as HICs depend on developing countries for what economists call intermediate goods, goods that are used in the process of production, and as a market for exports and cheap imports. If developing countries face decreases in production and consumption due to COVID-19 illness and restrictions, HICs will also face negative economic effects. In a world of globalization and world trade, the vaccine must be distributed at an affordable price and in a way that maximizes global public health if developed countries expect to make a robust economic recovery.
Economists often use cost-benefit analyses to determine the most efficient course of action. The predicted costs to HICs of unbalanced distribution are much higher than the costs of investing in equal vaccine distribution. Vaccinations benefit more than just the individual who is vaccinated because they lower the rate of transmission for others as well as protect the individual from the virus. This cost-benefit analysis of an investment in COVID-19 vaccine distribution emphasizes the benefits of supporting vaccine distribution in developing countries.
It is reasonable to expect HICs to prioritize vaccinating their own citizens first. However, even if HICs receive the first doses, their investment in increasing vaccine production and distribution in developing countries still results in a positive outcome for developing nations because vaccines will be produced faster and can then be distributed faster and more fairly. HICs have made bilateral agreements with vaccine manufacturers that prioritizes wealthy nations in vaccine access, threatening global herd immunity and a return of international economic activity.
To maximize total social benefit globally and minimize costs, HICs should make bilateral agreements that also benefit developing countries. For example, when investment accelerates the quantity and speed of production, this benefits both wealthy nations and other nations. Similarly, increased optionality can result from bilateral deals that identify backup options which also benefit the entire global population.
HICs can also invest in efforts such as The COVID-19 Vaccine Global Access Facility, which works towards rapid, fair and equitable access to COVID-19 vaccines worldwide. When HICs invest in COVAX they make an upfront payment to support vaccine production in return for enough vaccines for 10-50% of their population. The more HICs that participate, the less risky the investment is because the more likely COVAX is to succeed in producing enough vaccines. HICs can decrease their total costs and maximize the total social benefit by promoting the production and distribution of COVID-19 vaccines through financially supporting COVAX’s efforts and by making bilateral deals that will ultimately benefit developed countries.
Lizzy Peppercorn is an Opinion Columnist and can be reached at email@example.com.