Kiran Mathur Mohammed & Justin Ram
Caribbean countries must join forces now to buy 20 million vaccine doses for the entire region, or the pandemic will continue to devastate our lives and economies for another two years.
There are 18.5 million people in Caricom. To achieve herd immunity: we must buy enough for 90 per cent of our population, plus spillage and usage, as well as hold some for future use. That means ordering at least 150 per cent of what we need: at least 19.4 million vaccines.
To save lives and prevent hospitals from being overwhelmed, Caribbean countries have imposed lockdowns, border closures, restricted movements and quarantines for almost a year. These, alongside our own physical distancing we have adopted ourselves – necessary to protect against the virus – have resulted in job losses, school closures, and triggered domestic violence, abuse and mental health crises.
We must escape from this constant, crippling cycle of lockdowns and fear, and get people back to work so we can start adjusting to our new post-covid19 lives.
The vaccine is the only way. Governments have accessed vaccines through a global vaccine programme for developing countries called Covax. Individual countries have also started some bilateral discussions with vaccine providers already approved by the WHO. This is good.
But even those governments have recognised that it will take far too long. By the time a vaccine is WHO-approved, its manufacturers are immediately flooded with orders. Distributors in Mexico have said that AstraZeneca, for example, has said that nothing will be available to them until mid-2022.
There is huge competition to obtain vaccines and the simple market reality is that smaller players have less clout. Counterintuitively, it is actually easier to procure a larger order than a smaller one.
We will only land vaccines and achieve herd immunity in the next few months if Caricom pre-orders vaccines now from candidates whose WHO approval is expected in the next month or two. Large numbers of other countries are already taking this approach. We must do so or we will end up living like this until 2023.
Taken together on average, we are not poor countries. We can afford this.
The population of Caricom is about 18.5 million, with a total annual GDP of approximately US$91.5 billion. If we assume that Covax will provide enough vaccines for 20 per cent of our population in 2021, and that we need to vaccinate 90 per cent of our population, that means 13 million people still need to be vaccinated. Multiplied by 150 per cent, that makes 19.4 million vaccines.
With vaccines ranging between US$4 and US$37 per dose and with most vaccines requiring two doses, if we take the median price of US$21 per dose multiplied by two doses and we add 30 per cent for transport, storage, and the cost of procurement, the total cost to inoculate one person is about US$55.
US$55 multiplied by 19.4 million people is just over US$1 billion, or 1.2 per cent of total Caribbean GDP.
How should this cost be allocated? The fairest allocation might seem to be by population size.
However, this would leave the poorest country in Caricom, Haiti, with the largest bill of about US$652 million, because it is the country with the biggest population.
A better allocation formula would be by share of GDP, to spread the burden. Traditionally the Caribbean has supported multilateralism and fairness, principles that Caribbean citizens should all be proud of. TT’s bill under this would be US$251 million, just 3.4 per cent of its national budget. Jamaica’s would be less – US$182 million– while Barbados and Guyana would pay US$64 million each.
This is a vast return, considering covid19 cost TT alone a conservative US$1.3 billion last year alone.
To finance this, Caricom countries can collectively raise a bond for US$1 billion and split the repayments bond between countries, based on their share of GDP. Bond repayments can also be funded by, for example, an increase in common external tariff (CET) rates on certain products, incentivising local industries.
According to an editorial in the Economist magazine: "the countries that have done well with covid19 are most aware that the world is a competitive place." In the Caribbean, we must recognise this reality as well.
Our most important competitive asset, whether it be for nation-building, commerce or sport, is human capital. Our people’s welfare must come before every other priority. Caricom must come together and act now.
Kiran Mathur Mohammed is an economist and co-founder of medl, an IDB lab-backed social impact health tech company. Justin Ram is an economist and consultant, and the former director of economics at the Caribbean Development Bank.
Table compiled by
Justin Ram, economist, former director of economics at the Caribbean Development Bank.