Medical student Aisa Ismailova, 23, administers a shot on a “vaccine bus” in Tbilisi, Georgia. (photo: IMF Photo/Daro Sulakauri)

Efforts to increase the supply of vaccines available worldwide got a booster shot of sorts this week after a global COVID-19 summit of world leaders hosted by the US. The summit pushed for more ambitious global targets to end the pandemic and created high-level accountability to help meet these targets. Among other pledges, the US announced donation of an additional half a billion vaccine doses to low and middle-income countries. Additional dose donations were pledged from Italy, Japan, Spain, New Zealand, and Denmark, while India conveyed exports of vaccines will resume soon.

One key takeaway: It’s not too late to bring the pandemic under control.

“I think (ending the pandemic) is still a solvable problem and that it can be done, as long as you can get the countries and the vaccine manufacturers to come together and deliver on these targets,” IMF Chief Economist Gita Gopinath said in an interview with Reuters this week before the meeting.

A proposal laid out by Gopinath and IMF economist Ruchir Agarwal set a target of vaccinating 40 percent of the population in all countries with at least one dose by the end of this year and 60 percent of the population in each country by the middle of 2022.

Good news, bad news: The good news is that the world this week reached an overall 40 percent vaccination rate of at least one dose. The bad news: Only about 2 percent of people in low-income countries have received the vaccine.

The wealthy Group of Seven countries have delivered only about 14 percent of the total vaccine doses promised to COVAX. Increasing that to 50 percent would be needed to reach the global target for 2021, Gopinath said in her interview. As the map below shows, large swaths of the world will not reach the target under the status quo.

Three big things: Reaching the goal of vaccinating 40 percent of the population in all countries by the end of 2021 is still feasible, but to do so vaccine manufacturers and high-income countries must urgently:

1. Ramp up the supply and sharing of vaccines with developing countries. The IMF estimates that COVAX, a global effort to broaden vaccine coverage to poorer countries, will need approximately 1.75 billion doses to reach the 40 percent target in all countries by the end of the year. 

2. Remove trade barriers on vaccines and related materials.

3. Save lives in the interim while vaccine supplies remain scarce by providing grant financing to close financing gaps, including an urgent appeal by the World Health Organization to help fight the Delta variant.

📚 READ

Read the outcome of a recent meeting of the Multilateral Leaders Task Force on Scaling COVID-19 Tools

Global Trade

How Countries Can Diversify Their Exports

Chile may be best known for its significant copper exports but this Andean economy’s trade flows are more varied and complex than they may appear, with significant exports of vehicles, pharmaceuticals and telecommunications equipment. In fact, a recent IMF staff paper, finds that the South American nation provides an excellent example for diversification policies, the IMF’s Gonzalo Salinas writes in a new blog.

By looking beyond commodities, the research shows that economy-wide policies such as governance and education help foster diverse exports more than narrowly targeted industrial policies, a finding that can better guide nations aiming to expand their international trade.

📚 READ

Read the Blog

Read the IMF Working Paper

Finance & Development Magazine

F&D: Asia’s Climate Emergency

Asia is one of the hardest hit regions when it comes to the effects of climate change. It also produces about half of the world’s carbon dioxide (CO₂) emissions and contains five of the largest greenhouse-gas-emitting countries. In our latest issue on climate, produced in partnership with COP 26, the IMF’s Era Dabla-Norris, James Daniel, and Masahiro Nozaki explain what’s at stake and how fiscal policy can help address climate change in the region.

Read the full article on the web, or download the PDF.

📚 READ

Read the Full September Finance & Development Issue

Want to get a print copy delivered to your home or office? Click here.

📣WE WANT YOUR INPUT

On September 30, the IMF and Indonesia’s Ministry of Finance will jointly host a virtual, high-level dialogue on Embedding Climate Change into Asia’s Recovery Strategy.

The event will bring together economic policymakers in the ASEAN region—Sri Mulyani Indrawati, Minister of Finance, Indonesia; Ravi Menon, Managing Director, Monetary Authority of Singapore; Benjamin E. Diokno, Governor, Bangko Sentral ng Plipinas; and Arkhom Termpittayapaisith, Minister of Finance, Thailand—and ask them how they plan to turn their climate ambitions into action.

Do you have questions you would like to pose to them? Please send them to me.

**FINAL REMINDER**

The September 30 deadline for the IMF’s Climate Innovation Challenge is less than a week away. Click here to submit your proposal for enhancing the IMF’s capacity development, policy advice, and operational impact in areas where economic and financial policies intersect with climate change.

Quote of the Week

It’s not enough to make announcements and pledges. You have to come through on it.

—IMF Chief Economist Gita Gopinath calling for coordinated action and accountability in the global effort to increase global vaccine supply.

WEEKLY ROUND-UP

01. Podcast: Women in Economics

In a new podcast, economist Lisa Cook talks about her work using data on lynching and racial violence in the US to study the impact of violence on innovation and economic growth. Cook has made her mark not only as a black woman economist in a field dominated by white men, but for her ground-breaking research on how racism, sexism and violence prevent economies from achieving their potential. The podcast is the first in a series of IMF podcasts that will showcase extraordinary work by extraordinary women in economics. Cook was also the subject of a profile in a recent issue of F&D Magazine.

02. A New Agenda for Macroeconomic Stability

IMF Deputy Managing Director Antoinette Sayeh spoke this week at a virtual event hosted by Harvard University’s Growth Lab about the key tenets for a new agenda for macroeconomic stability. In her remarks she discussed the need for urgent, collective action on vaccines; strengthening economic systems and institutions; a recovery that is fair to all segments of society; transitioning to a stronger digital economy; and building a resilient and sustainable planet.

03. China’s Post-Pandemic Growth

China’s economic recovery is taking hold. The not-so-good news is that the growth momentum is slowing, IMF First Deputy Managing Director Geoffrey Okamoto said in a speech this week Forum on National Affairs hosted by China’s Counsellors’ Office of the State Council. Okamoto discussed how China can navigate the headwinds of an aging population, declining productivity growth, and pandemic-related setbacks in rebalancing towards high-quality growth.

04. Revisiting State-Owned Enterprises

State-owned enterprises have a sizeable footprint in the Middle East, North Africa and Central Asia region. Amid spending demands due to the pandemic and the increased need to support the recovery, IMF Middle East and Central Asia Director Jihad Azour, discussed during an event this week the need to revisit the SOE sector to help open fiscal space and look for growth opportunities. “At the end of the day, what matters is growth, employment, and providing an equal playing field. And last but not least, be transparent, because this is public money that you are using,” he said.

The event, with a panel of policymakers and experts from the region, discussed the findings of a new IMF departmental paper on the size, costs and challenges of SOEs in the region.