In early June, the widely respected World Bank (WB) published its half-yearly Global Economic Prospects report which predicted growth in the world economy of 5.6% this year, a significant upgrade from the 4.1% its experts were forecasting only in January. If they prove right, it will represent the fastest rate of recovery from a recession in 80 years.
Credit for this remarkable turnround is attributed mainly to the success of the COVID-19 vaccination programme. So, good news for the UK and other leading economies, but bad news for the developing nations still struggling with the virus because they have insufficient supplies of vaccines. The WB report estimated that, because of this variation between the top and bottom nations, the world economy “would remain about 2% below where it would have been without the pandemic by 2022.”
Calling for wider distribution of the vaccines, the report estimates that around 90% of the richest nations’ GDPs are expected to regain their pre-COVID levels by 2022, compared with only a third of the low-income nations. The authors argue that the pandemic “has reversed years of poverty reduction gains, aggravated economic insecurity in poorer nations, and worsened other long-standing challenges.” By the end of this year, they expect that 100m people across the world will have fallen back into extreme poverty.
Such harsh reality has prompted over 100 former Prime Ministers, Presidents and Foreign Ministers – including Gordon Brown and Tony Blair – to sign a letter demanding that the largest Western economies should agree to provide two-thirds of the $66bn (£46.6m) needed to supply COVID vaccines to the poorest nations. With the G7 leaders meeting in Cornwall between June 11-13 (i.e., only a few days after the report appeared), the recommendation could not have come at a more opportune time.
The G7 leaders subsequently pledged 870m vaccine doses – including 500m from the US, 100m from the UK – for developing nations over the next year. Given that COVID-19 has killed 3.7m people and wrecked whole economies since the last G7 meeting (two years ago), this has to be welcomed. However, the boss of the World Health Organisation put real perspective on the scale of the task ahead when he pointed out that it would take 11bn doses to vaccinate 70% of the world’s population. So, decent start, but still a very long way to go.