Wealthy nation backing for a $50bn (£35bn) mass global vaccination drive could provide a $9tn boost to the world economy, the head of the International Monetary Fund has said.
Putting pressure on the G7 countries ahead of their summit in Cornwall, England, next month, Kristalina Georgieva said richer nations would see the best return on investment in modern times if they dug deeper to help tackle the pandemic in poorer parts of the world.
The IMF’s managing director, speaking at a G20 health conference in Rome, said rich countries would receive 40% of the GDP gains from more rapid economic activity, and that their public finances – hard hit by the pandemic – would benefit.
“By now we all know there is no durable end to the economic crisis without an end to the health crisis,” Georgieva said as she released details of new IMF proposals for ending the Covid-19 crisis. “That means pandemic policy is economic policy; highly relevant for the work of the IMF.”
Georgieva said the fund’s plan had three elements:
Vaccinating at least 40% of the global population by the end of this year and at least 60% by the first half of 2022. To do so would require extra grants to Covax, the global vaccine initiative, donating surplus doses, and free cross-border flows of raw materials and finished vaccines
Preparing for the possibility that new variants of the virus will require booster shots will demand investment in extra vaccine production capacity by 1bn doses
Managing the interim period where vaccine supply is limited with widespread testing and tracing, therapeutic and public health measures, and, at the same time, ramping up preparations for vaccine deployment together with any approved dose-stretching strategies.
Georgieva said the IMF estimated the cost of the three-point plan at $50bn – of which the G20 group of developed and emerging market economy countries were expected to find $22bn. A further $15bn was available from Covid-19 facilities set up by multilateral development banks, leaving a shortfall of $13bn that the IMF is hoping for rich countries to cover.
“As we have been stressing, a faster end to the pandemic not only saves lives, but also could inject the equivalent of $9tn into the global economy by 2025 due to a faster resumption of economic activity. And advanced economies – asked to contribute most to this effort – would likely see the highest return on public investment in modern history, capturing 40% of the GDP gains and roughly $1tn in additional tax revenues.
“With strong and coordinated action now – and with little in terms of financing relative to the outsized benefits – the world can durably exit this unprecedented health and economic crisis.”
The IMF’s call for action further pressures wealthy countries to do more. The former UK prime minister Gordon Brown has been heading an international campaign calling on the G7 – the UK, the US, France, Canada, Italy, Germany and Japan – to agree a burden-sharing plan that would allow a much more rapid deployment of vaccines in poorer countries.
Research by Save the Children released this week showed that for every £1 invested the G7 would collectively avoid £35 in pandemic related losses. The study said it would cost the UK 50p a week per person person to supply the poorest countries with vaccines.
Kirsty McNeill, Save the Children’s director of policy and campaigns, said: “The question isn’t whether rich countries can afford to fund a fair rollout of Covid-19 vaccines, but whether they can afford not to. It’s an investment that will pay off 35 times over.
“For just the price of a chocolate bar a week per citizen, rich countries can stave off huge economic losses resulting from prolonging the pandemic. The UK alone risks losing more than £70bn. That’s enough to pay the salaries of more than 210,000 nurses for 10 years.”