Vaccine Nationalism Threatens Future of US and Global Economy
"World leaders should remember that there can be rational self-interest in global solidarity."
By John W.H. Denton AO and Hugh Evans
Those hoping for a rapid recovery from the turmoil of recent months will, no doubt, take heart from near daily reports of new progress made by scientists in combating COVID-19. From new methods to detect the novel coronavirus to trials of multiple promising treatments and vaccines, the pace of innovation is — quite understandably — cause for some optimism that light may soon be at the end of the tunnel.
But the extraordinary progress made in laboratories across the world is just one side of the puzzle in halting the human and economic toll of the crisis. A yet bigger task lies ahead: How to manufacture, distribute, and deploy enough of these life-saving tools to benefit everyone, everywhere?
There is, to be sure, a clear moral imperative at the heart of this question. If the initial impacts of the pandemic have exposed a fundamental divide between rich and poor, inequitable access to a future vaccine risks creating a deep schism between the haves and have-nots — both within societies and, perhaps more perniciously, among nations.
But recent experience has shown that the moral case for global solidarity in the face of COVID-19 can quickly dissolve when there is trouble at home. In April, the Trump administration provoked international uproar by redirecting surgical masks back to the United States, but it was arguably late to an already rampant game of sicken-thy-neighbor. By end-March, more than 50 countries had already introduced asinine curbs on trade in products needed to fight the spread of the virus.
So, here’s a different way of looking at the case for ensuring universal access to tests, treatments, and vaccines: What chance does any government have of reversing its domestic economic fortunes if the pandemic continues to spread beyond its borders?
A careful read of any optimistic national recovery scenario — whether it’s a classic “V” or the in-vogue “swoosh” — reveals a baked-in assumption that global demand and cross-border trade will be back to some semblance of normality by end-2021. This is not to critique the work of worthy economists; rather to emphasize that, in an interdependent world, no government can protect the livelihoods of its citizens without having regard to the welfare of those in other nations.
Early evidence shows that mere fear of the virus places a severe drag on the animal spirits of demand. In China, the specter of a new wave of infection has continued to suppress consumer spending after the reopening of many cities — with the latest outbreak in Beijing likely to blunt recent efforts by officials to stoke demand in the world’s largest consumer market. Sweden may have eschewed orthodoxy in its decision to keep shops and restaurants open in the face of the virus, but consumer confidence has nonetheless plunged to its lowest level since the global financial crisis.
While the United States and other advanced economies will inevitably win out in any scramble for limited vaccine supplies, where does that leave their businesses who have become increasingly reliant on exports to developing markets over the last 25 years? Mass vaccination may symbolically liberate the United States from the virus, but a cloud of economic uncertainty will hang over the families of the 10 million Americans whose jobs rely directly on exports if the pandemic still runs rampant in foreign markets.
To put it another way: The livelihoods of autoworkers in Michigan will not be truly freed from the effects COVID-19 until lives in the key markets of Mexico, Brazil, and Chile are returned to normal.
Some globally dependent sectors risk severe long-term damage if countries do not embrace a collective approach — tourism, in particular. Earlier this month, New Zealand became the first nation to declare itself “virus free,” but recapturing the near 6% of its GDP earned from international tourists is not just a matter of getting locals immunized and welcoming back the long-haul flights. Prospective visitors will need the confidence to travel without fear of infection.
On the flipside of the same coin comes the risk that continued disruptions in overseas production will severely restrict the ability of companies to import essential inventory and intermediate goods. Consumers experiencing a post-vaccine boost in confidence may instinctively hit the high-street, but the net economic impact will be marginal if retail stores are only half-stocked.
But what, you might ask, about the promised “golden age” of reshoring in the wake of the virus? Well, good luck substituting overseas supplies with home grown ones in the short term. This is not a matter of economic theory, it’s a physical reality. Wish as you might but production lines don’t appear out of thin air, workers can’t instantly learn new skills, and raw materials won’t magically appear in American soils.
Some governments have already started to grasp the imperative to ensure the tools needed to fight COVID-19 are affordable, available, and accessible to everyone. The Coronavirus Global Response Initiative, launched in May, raised US$8 billion from more than 40 countries on its first day. An impressive start, but five times this amount will likely be required to get vaccines to market and ensure access to pandemic-busting tools wherever they are needed.
This weekend, Global Citizen and the European Union will host the Global Goal: Unite for Our Future pledging summit, providing an opportunity for governments to put the funds needed on the table. President Trump is not expected to dial in, nor his Chinese counterpart Xi Jinping. Absent the world’s two largest economies, the risk is other governments with the necessary resources will balk at the prospect of bridging the funding gap.
They should really think again. From a business perspective, it’s increasingly clear that the “V” in any future economic rebound will ultimately stand for vaccine — and that a sustained recovery will only come if everyone, everywhere has the prospect of being free from COVID-19.
World leaders should remember that there can be rational self-interest in global solidarity. Every dollar pledged on June 27 to countries in need will deliver multiple returns at home.
John W.H. Denton AO is Secretary General of the International Chamber of Commerce — the institutional representative of over 45 million businesses around the world.
Hugh Evans is co-founder and CEO of Global Citizen.