Weak G7 commitments on vaccines pose major downside risk to world economy

Reports ahead of the Carbis Bay summit have indicated that the UK and the United States will pledge in the region of 600 million doses of proven vaccines to emerging economies over the next two years. But ICC – the institutional representative of more than 45 million businesses – has cautioned that these commitments still fall short of the major collaborative effort needed to lift the grip of the virus on the global economy.

ICC Secretary General John W.H. Denton AO said: “The signals from the UK and US ahead of the summit are most certainly welcome but, when viewed from a global perspective, little more than baby steps towards getting the spread of the virus under control.

“Simply put, the figures being quoted are a drop in the ocean set against anticipated global production of 12 billion doses of proven vaccines this year alone. We see a clear risk that the world’s richest nations will continue to hoard vaccines for booster shots at home – in doing so, leaving their own citizens exposed to the boomerang effect of COVID-19 variants and the costs of continued disruption across global supply chains.”

ICC has made a last ditch appeal to G7 leaders to commit to a clear and holistic road map to progressively bring the pandemic under control and get vaccines to everyone, everywhere.

Mr Denton added: “If the G7 wants to show real solidarity with the developing world there’s an obvious place to start: a cast iron commitment this weekend to share all available excess supplies of vaccines and dismantle the trade barriers that continue to impact the supply of the tools needed to end the pandemic – including tests and treatments.

“This should be coupled with a clear commitment to provide up-front financing to support a further scaling of vaccine production capacity and accelerate roll-out across the developing world. The IMF has estimated that US$50 billion is required to do this – a minor investment compared to the potential returns from expeditiously defeating the pandemic.”

The global business institution again cautioned on the downside risks to advanced economies of a prolonged pandemic – following on from the ICC study published in January that warned of possible losses of some US$4.5 trillion to the world’s richest nations.

Mr Denton concluded: “G7 leaders are taking a huge gamble with their domestic economic fortunes if they fail to take concerted action to vaccinate the world. As demand rebounds in many western economies, we’re already seeing damaging supply shortages in many important sectors – fueling domestic inflationary pressures. The only way for G7 governments to guarantee a durable economic recovery from the Covid-19 crisis is to invest in a major collaborative effort to vaccinate the world. The business cases for this is crystal clear.”