This article is part of a series in which OECD experts and thought leaders — from around the world and all parts of society — address the COVID-19 crisis, discussing and developing solutions now and for the future.
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As advanced economies deploy ambitious recovery policies in the trillions of dollars and amass vaccines for their populations, developing countries are being left behind at the peril of a sustainable global recovery. There is no such thing as a partial recovery from a pandemic, and advanced economies have a health, economic and moral imperative to support vaccines and recovery for all.
As COVID-19 rages on, developed and developing countries are experiencing different realities. While advanced economies adopt trillion-dollar recovery packages, the story is different for developing countries, which lack the policy tools and fiscal space to respond with comparable strength. Low-income countries spend on average USD 4 per capita on social protection compared to USD 695 in high-income countries. While total global financial assets held by banks, institutional investors and asset managers are valued at more than USD 379 trillion, having grown at 6% year on year since 2012, the poorest developing countries—home to more than 80% of the world’s population—hold less than 20% of global assets. Compounding this, OECD predicted a USD 700 billion decline in external investment to developing countries in 2020, a drop in foreign direct investment flows of more than 60% when compared to the decline suffered by developing countries during the Global Financial Crisis. Stimulus measures are also far from equal. Our latest Global Outlook on Financing for Sustainable Development finds that recovery spending in developing countries was USD 1 trillion less than in OECD countries in 2020.
For the most vulnerable, the crisis has pushed progress so far back that it becomes a question of if and how they can recover, not when. The Development Co-operation Report 2020: Learning from crises, building resilience, found that the COVID-19 crisis added a crippling layer to already life-threatening situations for the world’s poorest. As many as 150 million additional people will fall into extreme poverty in 2021, and 270 million are facing hunger. Some estimate that the crisis will erode all the human development gains of the last decade.
Find out more in the OECD Development Co-operation Report 2020: Learning from Crises, Building Resilience
“Building back better” starts to look like a luxury reserved for advanced economies in 2021, while developing countries will struggle to simply survive. Beyond humanitarian and inequality concerns, the problem is that there is no such thing as a half-global recovery. A recovery in OECD countries will only last if all countries are healthy and stable. Prolonging the global pandemic will escalate inequalities within and between countries, and delay the global economic return.
The absence of a comprehensive global strategy to ensure vaccine access in developing countries poses the greatest current threat. Based on the current trajectory, it is estimated that mass global immunisation efforts for poorer countries could be delayed until 2024 or beyond, prolonging human and economic suffering for all countries in the process. While new collaborative efforts such as ACT Accelerator and its COVAX initiative have emerged to help bridge current gaps, these are not enough. COVAX’s initial goal is to make 2 billion doses of COVID-19 vaccines available by the end of 2021, with the majority going to 92 low- and middle-income countries. Yet it is struggling to secure an additional USD 5 billion to fund vaccines for these developing countries this year—a tiny proportion of the trillions already spent in economic stimulus packages for G20 countries. Even if COVAX meets its goal, self-financing countries will receive volumes sufficient for between 10-50% of their populations in proportion to their contributions, while the 92 lower-income countries are promised volume for up to 20% of their populations, subject to funding availability.
Even if enough vaccine doses are eventually made available through multilateral and other channels, success will also be constrained by challenges in the health systems of many developing countries. This ranges from a lack of trained medical personnel and inadequate health infrastructure, including adequate vaccine storage facilities, to limited tracking mechanisms. Despite the clear evidence of the importance of a more holistic approach, as of January 2021 the ACT Accelerator’s pillar on strengthening health systems had received less funding than any other area, with a current shortfall of USD 7.8 billion and new funding calls expected to be USD 9.7 billion. Beyond increased development finance, policymakers in advanced economies have a role to adopt more coherent approaches on the speed and scale of vaccination efforts. This includes ensuring more effective and efficient multilateral co-operation on access, putting developing countries in the driver’s seat to determine the best way to administer and communicate around vaccines, and broader efforts to strengthen health systems. More official development assistance is needed to fill these gaps, but not at the expense of other supported sectors where progress towards many of the Sustainable Development Goals has been set back significantly by the crisis.
With promising signs of recovery emerging in the world’s biggest and wealthiest economies, now is the time to invest in support for developing countries for vaccine supply and roll out and beyond. This crisis opens a window to invest better in our common future. Better investment means that which is sustainable, shared, and equitable. This is the year the world starts to move beyond the COVID-19 crisis, and advanced economies have a responsibility to make sure we do so without leaving the most vulnerable populations behind.
Find out more about the OECD’s work on The race to vaccinate
|Tackling COVID-19||Health||Sustainable Development Goals||Vaccines|
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