Virus Variants Stoke Need for Vaccine Cash, Rockefeller Says

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A plan to end the Covid-19 pandemic by speeding up immunizations could be financed through a record asset allocation via the International Monetary Fund, according to the Rockefeller Foundation.

The IMF should approve and swiftly distribute $650 billion in additional reserve assets to help developing economies vaccinate as much as 70% of their populations by the end of next year, the Rockefeller Foundation said in a report Monday.

Delaying immunizations raises the likelihood new variants will emerge that could cause “rolling outbreaks resulting in further economic shutdowns,” according to the 22-page report, whose contributors include former U.K. Prime Minister Gordon Brown and Jeffrey Sachs, a professor of economics at Columbia University in New York.

“Vaccine-resistant variants that mutate in one under-vaccinated country can quickly spread to one that’s been immunized,” said Rajiv J. Shah, president of the New York-based foundation, in the report. “Current vaccination plans and the funding behind them are simply not enough to protect us all.”

The report details ways to leverage a large issuance and reallocation of IMF special drawing rights -- an international reserve asset created in 1969 -- which can be exchanged for freely-usable currencies. The report calls for wealthier countries to commit to voluntarily reallocating at least $100 billion of their unneeded drawing rights to provide further support to the developing world.

‘Liquidity Boost’

If approved, the new allocation would add a substantial, direct liquidity boost to countries without swelling debt burdens, IMF Managing Director Kristalina Georgieva said last month. A formal proposal is slated to be presented to the IMF board in June.

Financing from the World Bank, the IMF and regional development banks, including mobilized private capital, needs to increase by $400 billion to $500 billion a year as the world recovers from the pandemic to help assure a broad and sustainable rebound in emerging and developing countries, according to the report.

If the virus is allowed to spread in countries with low vaccination rates, it’s likelier to mutate and generate variants that could bypass protection from inoculations, the report said. As a result, even countries with high vaccination rates would be vulnerable.

The world is 4-to-6 times more likely to get a new variant from an under-vaccinated country that isn’t a member of the Organization for Economic Cooperation and Development than from a fully protected OECD country, it said.

For every $1 spent on supplying poorer countries with vaccines, high-income countries would get back about $4.80, Rand Corp. said in a research brief last year.

Any plan should incorporate strategies to mitigate the risk of future pandemics by addressing ongoing microbial threats, including antimicrobial resistance, said Olga Jonas, a senior fellow at the Harvard Global Health Institute, in an email.

“What is really needed is an urgent plan for robust core veterinary and human public-health systems in all low- and middle-income countries,” said Jonas, who worked for more than three decades at the World Bank, including as an economist specializing in pandemics.

Without such systems, any recovery will disappear when another outbreak isn’t controlled and becomes the next pandemic, she said. “The likelihood that it happens next year or in five years has not decreased because we already had a pandemic,” Jonas said. “There will be another one.”

©2021 Bloomberg L.P.

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