Sushma Ramachandran

Senior Financial Journalist

International financial institutions are aware that defeating the Covid-19 virus is the first step towards global economic recovery. It is therefore not surprising that the International Monetary Fund (IMF) presented an action plan to defeat the pandemic with vaccination as a cornerstone. The proposal envisages vaccinating at least

40% of the population in all countries by the end of 2021 and at least

60% by the first half of 2022. The cost of vaccinations and related health measures is considered affordable at $ 50 billion, given that the benefits are approximately $ 9 trillion. This is a strategy that rightly awaits global cooperation to resolve a global crisis, even though the international response to the pandemic has been largely uncoordinated.

The plan was presented against the backdrop of the IMF’s healthy 6% growth projection for 2021 after the 3.5% contraction in 2020. But most of this upgrade is due to reviving economies. advances. Even in this group, only the United States is expected to experience a significant rebound while the Eurozone is expected to recover more slowly. The link between vaccinations and higher growth is well established. The United States, for example, is on the cusp of faster growth, as it has managed to fully immunize about 39% of its population. Likewise, the UK quickly covered around 34% of its population. On the other hand, even rich countries like Germany and France, with relatively smaller populations, only reached around 14 percent. Other developing economies, including those in Africa, are lagging behind in the vaccination race. And while advanced economies may feel comfortable stepping up the immunization curve, the virus does not recognize geographic boundaries. Few countries will stay safe if the rest of the world is not vaccinated.

Regarding India, the IMF warned that things could not go on as usual. The government will be well advised to heed these warnings. If vaccination policies are not changed, he expects less than 35% of the population to be covered by the end of 2021. He has therefore proposed to buy a billion doses of vaccines to allow at least 60% of the population to be covered by this weather. Although the central government suggests that states make their own purchases, the IMF is confident that the former has sufficient resources to make these purchases without external support.

The IMF’s comments come at a time when the entire immunization program in the country appears to be coming to a standstill. Despite claims made by the Covid task force on adequate stocks when the program was rolled out in January, it appears that plans to deliver vaccines to the whole country have failed to take into account the need to switch advance orders to manufacturers or provide funds to accelerate increase capacity. One of the reasons for this seemingly nonchalant approach is the country’s notorious reluctance to invest in areas that require research and development. In stark contrast to this attitude, many countries have undoubtedly invested billions of dollars in highly successful Covid vaccination programs over the past year. Another factor is the deeply rooted historical distrust of private industry in the bureaucracy that seems to have penetrated deeper into the Modi government than even in previous administrations. There were reports of an antagonistic approach by officials of the Ministry of the Economy during preliminary meetings with business leaders after the government’s takeover. This suspicious state of mind may have been the reason why the funds sought to build capacity were not immediately granted to the two major vaccine makers, as one would expect during a crisis of such epic scale.

The political response to criticism of the vaccine strategy has also been overwhelmingly responsive and has opened up policymakers to even greater censorship after changes were made to the initial approach. The charge of excessive centralization was met with the decision to allow states to purchase their own vaccines. This was clearly not a viable strategy, as evidenced by the fact that global manufacturers like Pfizer and Moderna have pushed back state governments, now that they only deal with central governments. It is also not ideal for individual states to participate in global tenders for vaccines.

A recurring request was also made to involve the private sector in the distribution of vaccines. The answer has been to allow private hospitals to buy vaccines and to allow significantly higher prices for vaccinations. This is not a proposal we should have adhered to given that the Covid pandemic is a public health crisis. Offering vaccines at higher prices to those who can afford to pay clearly creates a situation of inequity. Such inequality should not be allowed to enter the arena of public health. In the current situation of scarcity, supplies will naturally flow to the highest bidder, so the rich will have faster access to vaccines than the poor. The initial system of delivering vaccines through private sector medical facilities, but at a slightly improved pace, should have remained in place. Allowing the private sector to buy and sell vaccines is only a viable long-term plan when vaccines are plentiful, and providing multiple options to consumers is useful.

The IMF’s global plan comes as a timely reminder of the critical interdependence among nations during this unprecedented health emergency. India would do well to follow advice on buying or building enough production capacity to make a billion doses available this year. The policy must also be adapted to keep purchases in the hands of the central government and distribute to states. In addition, direct financial support should be given to domestic manufacturers so that production capacities can be increased to meet the country’s needs. The IMF’s comment that pandemic policy is economic policy should be kept in mind. Unless the vaccine tangle is resolved, economic recovery will be a distant dream.



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