AIRLINK 69.92 Increased By ▲ 4.72 (7.24%)
BOP 5.46 Decreased By ▼ -0.11 (-1.97%)
CNERGY 4.50 Decreased By ▼ -0.06 (-1.32%)
DFML 25.71 Increased By ▲ 1.19 (4.85%)
DGKC 69.85 Decreased By ▼ -0.11 (-0.16%)
FCCL 20.02 Decreased By ▼ -0.28 (-1.38%)
FFBL 30.69 Increased By ▲ 1.58 (5.43%)
FFL 9.75 Decreased By ▼ -0.08 (-0.81%)
GGL 10.12 Increased By ▲ 0.11 (1.1%)
HBL 114.90 Increased By ▲ 0.65 (0.57%)
HUBC 132.10 Increased By ▲ 3.00 (2.32%)
HUMNL 6.73 Increased By ▲ 0.02 (0.3%)
KEL 4.44 No Change ▼ 0.00 (0%)
KOSM 4.93 Increased By ▲ 0.04 (0.82%)
MLCF 36.45 Decreased By ▼ -0.55 (-1.49%)
OGDC 133.90 Increased By ▲ 1.60 (1.21%)
PAEL 22.50 Decreased By ▼ -0.04 (-0.18%)
PIAA 25.39 Decreased By ▼ -0.50 (-1.93%)
PIBTL 6.61 Increased By ▲ 0.01 (0.15%)
PPL 113.20 Increased By ▲ 0.35 (0.31%)
PRL 30.12 Increased By ▲ 0.71 (2.41%)
PTC 14.70 Decreased By ▼ -0.54 (-3.54%)
SEARL 57.55 Increased By ▲ 0.52 (0.91%)
SNGP 66.60 Increased By ▲ 0.15 (0.23%)
SSGC 10.99 Increased By ▲ 0.01 (0.09%)
TELE 8.77 Decreased By ▼ -0.03 (-0.34%)
TPLP 11.51 Decreased By ▼ -0.19 (-1.62%)
TRG 68.61 Decreased By ▼ -0.01 (-0.01%)
UNITY 23.47 Increased By ▲ 0.07 (0.3%)
WTL 1.34 Decreased By ▼ -0.04 (-2.9%)
BR100 7,399 Increased By 104.2 (1.43%)
BR30 24,136 Increased By 282 (1.18%)
KSE100 70,910 Increased By 619.8 (0.88%)
KSE30 23,377 Increased By 205.6 (0.89%)

Moreover, vaccine inequality, whereby rich countries are significantly outpacing poorer countries in terms of vaccine administration, have also very damaging consequence in terms of economic inequality between countries. For instance, a recent Bloomberg published article ‘The best and worst places to be in Covid: U.S. stages a comeback’ by Jinshan Hong, Rachel Chang, and Kevin Varley based on ‘Bloomberg Covid Resilience Ranking’ argued: ‘Major western economies are gaining ground faster than developing nations, fueling a rich-poor disparity. … The domination of vaccine supply by richer countries – which the World Health Organization Director-General Tedros Adhanom Ghebreyesus called a “catastrophic moral failure” – will likely prevent poorer nations from moving up the ranks in the coming months. Mexico remains at No. 53, the last of the ranked economies.’ Hence, as per the article, ‘India, which to the puzzlement of scientists seems to have evaded the worst of Covid-19 despite its huge outbreak, moved up two spots to 16th as fatalities continued to fall.’ At the same time, Pakistan has been ranked at 47th position in terms of Covid resilience, where pandemic was managed quite well, has not had the same access to vaccine than richer countries.

The WTO and the IMF have an important role to play indeed in supporting a global vaccine drive, and with a more equal level of access to vaccines by countries. As per a recent article ‘Patently unfair: can waivers help solve Covid vaccine inequality’ by Virginia Pietromarchi, ‘The World Trade Organization (WTO) General Council gathered virtually on Monday for the first of two days of talks amid increasing calls from civil society, states and nongovernmental actors to temporarily waive patents for COVID-19 vaccines and other coronavirus-related medical products. … The strikingly unequal distribution of vaccines has boosted support for India and South Africa’s proposal, which now counts 100 supporters among WTO members, including 58 official sponsors. … Several high-income countries – including the US, the United Kingdom and members of the European Union – pushed back at the WTO, arguing that waiving patents would hamper scientific innovation… Supporters of the plan disagree that a waiver would hamper scientific development, and point out that vaccine developers received about $10bn in public and non-profit funding for their vaccine candidates, with five top companies securing between $950m and $2.1bn in funding commitments, mostly from the Coalition for Epidemic Preparedness Innovations (CEPI) and the US government, as reported by The Lancet medical journal.’

Hence, while it is important that a patent-related waiver is crucial for bringing much needed greater vaccine justice globally, support from the IMF and other multilateral institutions would be needed in helping poorer countries in terms of meeting public health capacity needs, and overall vaccine-purchasing fiscal needs. For instance, in the same article Virginia Pietromarchi pointed out: ‘A waiver would not just enable the establishment of a practical framework to scale up production amid a pandemic, but would send a strong public health message, according to Fatima Hassan, founder and director of the Health Justice Initiative.’

That IMF has an important role to play cannot be over-emphasized, but sadly it has seriously fallen short of expectations during the pandemic, even by its own standards in terms of its own response during the Global Financial Crisis. A former official of the IMF, Ousmène Jacques Mandeng, in his recent article for Financial Times ‘The IMF no longer functions as the world’s safety net’ pointed towards a lack of support of the IMF towards member countries during the pandemic, and indicated: ‘The most severe economic crisis since the Depression should have been a moment for the IMF to shine. While the fund has approved a large number of borrowing arrangements since the start of the pandemic, these have amounted to less than 10 per cent of its $1tn resources.This is despite the fund saying that it has “substantial space” in its lending capacity and is “ready to help evenmore”. This begs the question, does the IMF provide help no one wants any more? … The IMF has repeatedly said it needs more resources to be able to act credibly in times of crisis. Yet it struggles to deploy the resources it has.Between the end of January 2020, when Covid-19 was declared a global public health emergency, and January 2021, by my calculations using IMF datathe fund extended lending commitments by gross $97bn to $288bn and approved 111 arrangements. Excluding flexible credit lines, which are normally not activated, total new lending commitments were $52bn.The average loan amount approved in per cent of IMF quota – the member countries’ share in the institution – has been 76 per cent, or $481m excluding FCLs.Compared with the global financial crisis, the IMF has offered significantly less during Covid and through smaller arrangements. In the year to September2009, the IMF approved new lending commitments of $75bn excluding FCLs. Thirty-fourarrangements were approved with the average amount representing 340 per cent of quota, or $2.4bn.’

Developing countries, especially those with low foreign exchange reserves and histories of frequent balance of payments crises, needed all the more support from the IMF. Unfortunately, however, these countries have not received much support till now in this regard, whereby, for instance, in terms of its enhanced Special Drawing Rights (SDRs) allocations to member countries, where a plea was made by countries to increase it by $500 billion at the earliest possible, in an overall support from the IMF in helping the countries purchase the Covid vaccine.

This has not happened yet. Moreover, it has not even reduced its surcharges on loans during the pandemic, whereby a recent Financial Times article ‘The IMF’s surcharges are unfit for purpose’ pointed out the following in this regard: ‘In response to the COVID-19 pandemic, the IMF has already approved 119 programs to 85 countries at a cost of over $100bn. But, as it turns out, the countries that need the most from the IMF will have to pay over $4bn in extra surcharges on top of interest payments and fees from the beginning of the crisis through the end of 2022. What’s more, the IMF estimates the surcharges have become the Fund’s largest source of revenue, accounting for almost half of revenues during this period. At exactly the same time, developing countries need every penny they can muster to fight the virus, protect the vulnerable,and mount an inclusive and green recovery. Something has gone horribly wrong with the policy. …These surcharges can often lead to debt costs as much as tripling. Currently, 30 per cent of the countries with IMF funding face surcharges in the midst of the crisis, including Angola, Argentina and Georgia. And more are due to begin paying. This is just when many middle-income countries still don’t have access to vaccines and will continue to suffer the health, economic, and financial pain of the crisis.’

It is, therefore, indeed high time that these issues are addressed in a concerted and timely manner. At the same time, the WHO needs to take the leadership on getting resolved all issues in the way of administering Covid vaccine globally in a just way. Lack of needed level of multilateralism holds the potential to serious damage agenda of liberal politics, and could cause immense economic misery to the already economically suffering masses during the Covid-induced recession.

(Concluded)

(The writer holds PhD in Economics degree from the University of Barcelona, and previously worked at International Monetary Fund). He tweets @omerjaved7

Copyright Business Recorder, 2021

Dr Omer Javed

The writer holds a PhD in Economics degree from the University of Barcelona, and has previously worked at the International Monetary Fund. His contact on ‘X’ (formerly ‘Twitter’) is @omerjaved7

Comments

Comments are closed.