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A place of greater safety

Poorer countries remain a long way behind in the rollout of Covid-19 vaccines. Greater international cooperation is essential to ensure that everyone is safe – and to address the big post-pandemic challenges, notably global warming.

Newsletter from 3 September 2021

‘A global pandemic requires a world effort to end it – none of us will be safe until everyone is safe. Global access to vaccines, tests and treatments for everyone who needs them, anywhere, is the only way out.’

This observation by the World Health Organization’s director-general Tedros Adhanom Ghebreyesus and European Commission president Ursula von der Leyen made in September last year remains just as powerful a year later.

While over 5.4 billion doses of coronavirus vaccines have now been administered around the world, distribution across countries is highly uneven – from 187.2 doses per 100 residents in the United Arab Emirates to 0.1 in the Democratic Republic of Congo.

Over the summer, the Economics Observatory has been examining what lies behind these inequalities, as well as the impact of the pandemic and the policy response on developing countries.

In a piece on the value of international cooperation in the vaccine rollout, Flavio Toxvaerd (University of Cambridge) and colleagues show how the countries with the highest GDP per capita continue to be the most advanced in terms of delivering doses. They call for a renewed global commitment to the Covid-19 Vaccines Global Access (COVAX), an initiative set up in April 2020 with the goal of providing equitable access to vaccines, by reducing ‘vaccine nationalism’ and encouraging countries to purchase their vaccines in partnership.

Figure 1: Vaccination rate versus GDP per capita, March 2021 and July 2021

Panel A: March 2021

Panel B: July 2021

Source: Our World in Data
Note: GDP in thousands of 2019 US dollars; blue lines show linear best fit

Asad Islam (Monash University) and colleagues also explore policy solutions in a piece on the high mental health costs of the pandemic in low- and middle-income countries. In particular, they discuss the unmet needs of one of the groups most vulnerable to the effects of Covid-19: women living in rural areas, who face heavier burdens of daily chores, managing household food shortages and caring for children and elderly relatives. Low-cost interventions using accessible technology may provide some solutions.

Aid from the UK is unlikely to contribute to such initiatives given the government’s July confirmation that it will be reducing the size of its budget for official development assistance from the United Nations target of 0.7% of gross national income to 0.5%. As an Observatory piece on the aid cuts by Marcus Manuel (ODI) explains, the process of assessing their likely direct impact is only just starting but they will affect tens of millions of people. The cuts are also likely to have indirect effects on both global aid and global climate finance – with perhaps the most striking outcome being the missed opportunity of vaccinating all of Africa.

Interactions between health, climate and development are at the heart of our most recent piece: a look at the role of coal in the Industrial Revolution by John Turner (Queen’s University Belfast), one of our lead editors. John notes that as lower-income countries seek to grow, fossil fuels will continue to be important unless there is a great leap forward in renewable technologies. We will be doing much more on these big issues around the economy and the environment over the coming months.

Talking economics

As the new school and university year gets underway, so too does the circuit of events to discuss economic research and policy-making. Despite the lifting of many pandemic restrictions, most remain virtual, including the annual meeting of the American Economic Association next January; but some, not least our Talking Economics event with the Bristol Festival of Economics in November, plan on happening in person.

Last week, the annual gathering of central bankers, policy-makers and top research economists hosted by the Kansas City branch of the US Federal Reserve System missed out on the mountain delights of Jackson Hole, Wyoming, for a second successive summer, staying virtual to discuss ‘Macroeconomic policy in an uneven economy’.

The annual congress of the European Economic Association also took place last week and, as with the Jackson Hole symposium, videos of all of the keynote presentations are freely available online – many on issues close to our heart, including climate change, development, inequality and the economic consequences of the pandemic:

  • Climate change pledges made in international agreements: Silvana Tenreyro (London School of Economics and the Bank of England’s Monetary Policy Committee) assessed countries’ compliance with targets set in the Kyoto Protocol, the Copenhagen Accord and the Paris Agreement – and the overall impact on greenhouse gas emissions.
  • Economic development in a less globally integrated world: Penny Goldberg (Yale University and former World Bank chief economist) explained that while many of the success stories of economic development during the last century, especially in East Asia, coincided with growth in exports and trade surpluses, in the future, developing countries may have to rely increasingly on their domestic demand.
  • World inequality: Thomas Piketty (Paris School of Economics) looked back at a century of data to show that the level of global income inequality has always been very large, reflecting the persistence of a highly hierarchical world economic system. Within-country inequality dropped between 1910 and 1980 (while between-country inequality kept increasing) but rose over the four decades to 2020 (while between-country inequality started to decline).
  • Inequality and fairness: Stefanie Stantcheva (Harvard University), who has written for the Observatory about ways that policy-makers can address inequality after the pandemic, explored public attitudes to fairness.
  • Gender norms that restrict women’s work opportunities: Given her topic, Rohini Pande (Yale University) renamed the Alfred Marshall lecture she was delivering in honour of his wife, Mary Paley Marshall, who as one of our lead editors, Sarah Smith (University of Bristol), has noted, was a pioneering economist in her own right as well as the first woman lecturer at what was then University College Bristol.
  • Macroeconomic consequences of the pandemic: This panel discussed the latest thinking on many policy debates we’ve covered on the Observatory, including the dramatic extension of the role of the state since early 2020, the implications of fiscal and monetary choices for inflation, the burden of public debt and the rapid evolution of digital currencies.

Our friends at the Economics Network held their Developments in Economics Education conference this week – also online, mirroring how much of the past year's university teaching has been conducted. Unsurprisingly, many presentations focused on how teaching, learning and assessment have been affected by the pandemic, highlighting how Covid-19 has accelerated change already on the horizon. In the keynote address, Dame Frances Cairncross discussed the future of the news business: the video will be available next week.

Upcoming events likely to interest readers of this newsletter include:

  • COVID-19 and development – effects and new realities for the Global South: Next week’s annual conference of the United Nations University World Institute for Development Economics Research will examine the effects of the pandemic on the prospects for making progress on the Sustainable Development Goals.
  • The common good after Covid: Economics Nobel laureate Jean Tirole (Toulouse School of Economics) will deliver the Institute for Fiscal Studies (IFS) annual lecture, focusing on the long-term challenges of climate change, economic inequalities and demographic shifts.
  • UK productivity: Jagjit Chadha, director of the National Institute of Economic and Social Research (NIESR), a lead editor of the Observatory and chair of the Productivity Commission, will be launching this new initiative of the Productivity Institute.
  • Sustainable finance: The line-up for the Money Macro and Finance Society’s annual monetary and financial policy conference at the end of September includes former Bank of England governor Mark Carney on the economics of the United Nations Climate Change conference, COP 26, which will take place in Glasgow in November.

The Economics Observatory will be co-hosting a public event on climate change with the University of Glasgow on 3 November – details to be announced soon. And our Talking Economics event starting two weeks later will include a session looking to climate as the next crisis alongside our wide-ranging discussions of the effects of Covid-19 on work, education, mental health, inequality and the national and international economies.

Lastly, we would love to hear your thoughts on our work. Please follow this link to complete a short survey on our work. It shouldn't take more than 5-10 minutes and will be incredibly helpful as we continue to grow and develop our project.

Author: Romesh Vaitilingam, Editor-in-Chief
Image by David Mark from Pixabay
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