Covid-19: The pandemic is far from being over

Céline Boulenger - Economist

In Belgium and most European countries, the economy is recovering from the Covid-19 pandemic. The vaccination campaigns are on track, and the number of daily contaminations and deaths keeps decreasing. It seems we start to see the end of the tunnel. But is this positive evolution happening all around the world? A subject to discuss with Céline Boulenger, macro-economist at Degroof Petercam.

Light at the end of the Corona tunnel, but not everywhere

We see that vaccination campaigns have picked up fast in developed economies: European countries, the US, the UK, etc. For many rich nations, herd immunity could be reached by the end of the year as a significant part of the population will be vaccinated. So, many of us are pretty optimistic about the future as it seems that the return of “life as we used to know it” is not far away. But, what is tricky is that we live in a world that is hyper-connected in every possible way. And as long as Covid-19 is still spreading in other nations, it is a danger for our countries as well.

Big gap between rich and poor

The problem is that vaccination campaigns are extremely slow in poor countries. And it’s a topic we don’t talk about enough. To give you an example: in the US, half of the population is vaccinated, while in India (a country that is still struggling amid a terrible second wave), only around 3% of the population is vaccinated. In Africa, it’s in the order of 1%. It is partly because rich countries hoarded vaccine doses from the get-go. Vaccines weren’t even made yet that they ordered more than what was needed to vaccinate their populations. This “vaccine nationalism” has led to a great divide between rich and poor countries. In March, 90% of vaccines that were delivered had gone to rich countries.

The slow pace of vaccination: a risk for rich countries

For emerging countries, the slower they vaccinate their populations, the more they will face new waves of Covid, and the slower their economies will recover. Some talk about herd immunity being reached in the poorest countries only in 2023! That’s in two years. It is terrible for rich nations for several reasons: economically speaking, as emerging markets face new waves of Covid and struggle to recover, this can impact global trade through disruptions to supply chains and affect worldwide demand and financial markets.

Fear of new variants

In terms of the pandemic, it can also put our fight against Covid at threat. This is because the more Covid-19 continues to spread in other parts of the world, the higher the chance of new variants being born. These new variants could more dangerous and even resist existing vaccines. So vaccinating people in poor countries would truly be a win-win for those nations but also us.

Problems in India detrimental to COVAX

Thus, the most important thing is for developed nations to help poor countries with their vaccination campaigns. Right now, they highly depend on the mechanism of COVAX, whose mission is to deliver vaccines to 92 middle and low-income countries. Unfortunately, their mission has been compromised because their main supplier is the Serum Institute of India. Still, their deliveries have been put on hold as the Indian government has asked for no more exportations of vaccines. In addition, they are dealing with a problematic sanitary situation at home and a low rate of vaccination at home. COVAX has made new deals with other supplies, and some developed nations have committed to sending additional vaccines to the poorest countries, but it will be far from enough.

Commitment to global group immunity

As uncertainty is still extremely high, we should focus on reaching herd immunity in every nation, not just rich countries. The pandemic won’t be beaten until it’s beaten everywhere.

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