The Rockefeller Foundation has offered a new roadmap for financing the end of the Covid-19 pandemic by the end of 2022 and kick-starting a just and sustainable global recovery.
An Action Plan for Financing Global Vaccination and Sustainable Growth issues a call to action to leverage $44 billion in special drawing rights (SDRs) through the International Monetary Fund (IMF) in order to achieve a 70% vaccination rate in low- and middle-income countries (LMICs) by the end of 2022. These special drawing rights would be a part of a broader issuance of $650 billion in SDRs to jump start a more inclusive, sustainable recovery in LMICs at no additional cost to wealthy nations, which have spent heavily on their own recoveries.
The Foundation's financing roadmap calls for this new allocation to be finalized and distributed as swiftly as possible. Arguing that without it, the pandemic will rage on in these countries, giving rise to variants and supply chain disruptions that threaten efforts to defeat the virus in every country. The roadmap also cites the need for a re-allocation of no less than $100 billion in wealthy countries' SDRs to further support pandemic response and recovery in LMICs with relatively low cost to donors.
"At a moment when countries are facing populism and vaccine nationalism, this plan provides initial proposals on financing options to end the pandemic in 20 months and requires minimal additional dollars from individual nations," said Dr. Rajiv J. Shah, President of The Rockefeller Foundation. "Leveraging $44 billion in special drawing rights through the IMF can fund the vaccination of up to 70% of developing countries' populations and stop the pandemic everywhere, for all of us."
$44 billion is needed to bridge the financing gap and end the pandemic in the next 20 months. The fact is that, as of the end of March 2021, high- and upper-middle-income countries accounted for an estimated 86% of Covid-19 shots administered worldwide.
The price of achieving 70% vaccination among lower- and middle-income countries by the end of 2022 is estimated to be $44 billion, considering costs of the vaccine and the logistics and staffing to vaccinate these populations. The roadmap notes even some additional donor commitments would be unlikely to cover these costs in the short term. At the same time, a dozen of the world's Covid-19 vaccine manufacturers, collectively, have the facilities to produce up to 12 billion doses in 2021 alone.
"Right now, the supply side of a global vaccination effort of this kind is projected to be ahead of the operational and financing side," said Dr. Rick Bright, SVP of Pandemic Response and Prevention at The Rockefeller Foundation. "We know how to stop this virus, but the funding behind current global vaccination plans and the commitment required to drive supply and vaccine administration are simply not enough to get the vaccine into the arms of the majority of the world's population – and as the virus continues to spread unchecked, it's likely that even more dangerous variants will emerge."
"At a moment when countries are facing populism and vaccine nationalism, this plan provides initial proposals on financing options to end the pandemic in 20 months and requires minimal additional dollars from individual nations." - Dr. Rajiv J. Shah, President of The Rockefeller Foundation
"We know how to stop this virus, but the funding behind current global vaccination plans and the commitment required to drive supply and vaccine administration are simply not enough to get the vaccine into the arms of the majority of the world's population." - Dr. Rick Bright, SVP of Pandemic Response and Prevention at The Rockefeller Foundation
In addition to bridging the critical financing gap, successfully utilizing special drawing rights to ensure equitable access to Covid-19 vaccines globally can pave the way for future creative use of SDRs.
$650 billion to kick-start a sustainable and just global recovery.
The IMF projects that the pandemic will strip $11 trillion of global economic output by the end of this year.
"The surest, easiest, and most obvious way to contain the pandemic and jump start a global recovery is through a new issuance of special drawing rights by the IMF, and to direct a substantial portion of the new SDRs towards vaccine production and deployment," said Jeffrey Sachs, University Professor and Director of the Center for Sustainable Development at Columbia University and President of the United Nations Sustainable Development Solutions Network.
An allocation of $650 billion worth of special drawing rights, from which the $44 billion for vaccination could be drawn, would also provide an immediate injection of balance-sheet liquidity for the poorest countries, which have had limited to no ability to provide domestic fiscal support during the worst of the pandemic. This would automatically yield almost $23 billion for the Sub-Saharan Africa region alone, bolstering reserves, improving overall credit worthiness, and freeing up additional funding for critically needed domestic spending for the region's 46 countries.
At the same time, the pandemic is expected to push as many as 163 million into extreme poverty by the end of 2021 as the risks associated with climate change continue to grow, including droughts, fires, and other extreme events. Billions of people are currently held back because of a lack of access to safe, reliable, and affordable electricity, and even though solar and wind energy generation doubled during the last five years and now make up about one-tenth of global electricity generation, the use of coal only fell by 1% from 2015-2020 in real terms.
As part of that recovery, investments should speed the transition to cleaner forms of energy that will create jobs and stimulate a more sustainable recovery. Unfortunately, only 2.5% of total spending currently announced as a part of recovery packages is expected to enhance sustainability. CO2 emissions are also starting to rebound aggressively as some economies recover. A new SDR issuance should set the stage for a clean and equitable recovery that unlocks access to the modern economy.
As of the publication of this roadmap, IMF Executive Directors have conveyed broad support among Fund members to move towards agreement of a $650 billion allocation of SDRs. A formal proposal is expected to move forward in the coming months.
The roadmap provides a financing plan to help achieve two key goals in The Rockefeller Foundation's landmark billion-dollar commitment announced in October 2020: end the Covid-19 pandemic and drive a more inclusive, sustainable global recovery. In the coming months, it will release a series of detailed plans to revitalize global growth by deploying a larger, multilateral financing effort focused on equity, sustainability, and climate.
The Rockefeller Foundation advances new frontiers of science, data, and innovation to solve global challenges related to health, food, power, and economic mobility. As a science-driven philanthropy focused on building collaborative relationships with partners and grantees, The Rockefeller Foundation seeks to inspire and foster large-scale human impact that promotes the well-being of humanity throughout the world by identifying and accelerating breakthrough solutions, ideas, and conversations.
For more information, visit: www.rockefellerfoundation.org