Vaccine Equity and Global Economic Recovery

Friday, January 7, 2022
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Senior Fellow for Global Health, Economics, and Development, and Director, Global Health Program, Council on Foreign Relations; @TomBollyky

Distinguished Fellow, Council on Foreign Relations; Vice Chairman and President, Strategic Growth, Mastercard; Former U.S. Trade Representative (2013–2017)

External Member, Monetary Policy Committee, Bank of England; Former Chief Economist, Organization for Economic Co-operation and Development (2014–2017); CFR Member 


Jaime and Josefina Chua Tiampo Professor of Business Administration, Harvard Business School; CFR Member 

Panelists discuss global vaccine distribution efforts, the barriers to achieving vaccine equity, and what this means for global economic recovery. 

SPAR: Thanks, Teagan. Good morning. My name is Debora Spar. It’s a pleasure to be with you all today. I’m the Jaime and Josefina Chua Tiampo Professor at Harvard Business School and senior associate dean for business and society. And I have the honor of presiding over this conversation. We have, as you know, a timely and rather massive topic on the table for today. And so we are lucky to have such an eminent group of commentators.

We have with us Thomas Bollyky, senior fellow for global health, economics, and development at the Council on Foreign Relations; Ambassador Michael Froman, former U.S. trade representative and currently the vice president at—sorry—vice chairman and president for strategic growth at Mastercard; and Catherine Mann, external member of the Monetary Policy Bank of England and former chief economist at the OECD. Thank you all for being here.

So to start us out, I’m going to ask an overarching question, and ask each panelist to sort of approach the question from their particular point of expertise. So the overarching question is why, at this rather perilous moment in time, should we care about and prioritizing vaccine equity, and particularly global vaccine equity? So, Tom, if you wouldn’t mind starting us out, it would be great if you could kind of approach this question from the health perspective. And I’m going to ask you all, please, to keep your comments to five minutes.

BOLLYKY: Great. Thank you, Debora, for the kind introduction. And thank you all for coming today. And it’s nice to be able to share a panel with Mike and Catherine.

So since the emergence of Omicron, governments have been urging their citizens to get vaccinated. In rich countries, that often means a third or, in some cases, a fourth dose. But in poorer countries, many are still waiting to get their first. Just under 9 percent of people in low-income countries have received at least one dose. There is a higher percentage of people in Britain who have received their third dose now than have received their first dose in any country in sub-Saharan Africa, and more people in Britain received their third doses than many countries in the Middle East, Central Asia, and Southeast Asia.

Israel is moving to fourth doses before countries like Ethiopia or Nigeria have had the opportunity to vaccinate their health workers or high-risk elderly. High-income countries have consumed twice as many doses per capita as low-or-middle income nations, and thirteen times as many doses per capita as low-income nations. The WHO had set a target for each country to vaccinate 40 percent of their population by the end of 2021. Ninety-two countries did not achieve that goal, despite there being the production and distribution of 9 billion COVID-19 vaccine doses worldwide.

At the current pace, 109 countries won’t meet our target of vaccinating 70 percent, or the White House’s target of vaccinating 70 percent of their population by September 2022. Unequal distribution is not necessarily inequitable or unfair, provided doses are going to the nation that are of higher risk, but that has not been so. Vaccines were slow to arrive in many Latin American nations, Central Asia, the Middle East, and, of course, some high-risk countries like South Africa and Africa as well. There are three health consequences of this—all bad.

The first is humanitarian, deaths. Since the global rollout of vaccines began in December 2020 with the approval by the U.K. regulator of the Pfizer vaccine, COVID mortality has been increasing fastest in poor nations and the regions with lowest vaccination rates. So that’s the first consequence.

The second consequence is variants, of course. The biggest risk to our investment—U.S. investment or other high-income countries’ investment in vaccination at home—is the underinvestment in vaccination abroad. Time and time again we’ve seen new variants emerge in what were then under-vaccinated settings, like the Alpha variant in what was then under-vaccinated U.K., Delta in India, and Omicron we’re not certain but appears to be most likely—or appears that potentially South Africa. There’s no reason why we will not see more variants emerge in this crisis. As we see infections occur unabatedly worldwide, with each of those infections there is a risk of a new and more transmissible and more virulent variant emerging.

The third consequence is more of a long-term one, but equally important. Nations that have been left without vaccines in this pandemic, they feel very little incentive to participate in the ongoing discussions now about how to better detect and contain future outbreaks. If they’re not going to receive the benefits of effective medical interventions to address future crises, what incentive do they have to build the surveillance networks that we want them to have or the infrastructure to contain outbreaks, if there’s no help coming for them? So I’ll stop there, with those three health consequences and look forward to the economic and diplomatic consequences from my colleagues.

SPAR: Thanks, Tom. That was scary, but very informative. Thanks.

So let me ask Catherine to answer the same question of, you know, why should we care, but if you would more from the macroeconomic perspective.

MANN: Right. Well, thanks very much, Debora for the moderation of the panel, and for being here with Mike and Thomas.

Thomas, you’ve made it very clear what the health consequences are. And that is, you know, obviously a very important ingredient. But I’d like to put a little bit of nuance on the question of vaccine availability, and then broaden out what is the consequence of vaccine availability, or lack thereof, and macroeconomic outcomes. In particular, I want to note that an availability of vaccination and economic outcomes from vaccination have a lot of links in the middle. There is a policy strategy. How do countries, even if they have vaccination availability, how do they choose to deploy it? How do they choose to deploy associated policies such as masking, lockdown, zero COVID strategies? So the policy strategy matters.

Complementary policies of financial support, fiscal support, et cetera, also have consequences from a macroeconomic standpoint. And then, of course, we can’t ignore what the behavioral response is at the individual level to avail oneself of a vaccination, because even those countries that have availability, not everyone has chosen to be vaccinated. So the nuance that I think is important when we think about the links between vaccine availability nationally and globally and economic outcomes nationally and globally have these links in the chain that also have to be considered as part of an overall understanding of the macroeconomic outcome—possible outcomes of having a global vaccine availability. It doesn’t necessarily mean global vaccine deployment and so forth.

So one of the—I think the global implications of national strategies do matter. For example, a zero COVID strategy—vaccines are available, but the policy strategy is zero COVID. New Zealand, Australia, not really a macroeconomic consequence at the global level of undertaking a zero COVID strategy. But an economy—a major supplier in the global value chains, China, which has pursued a zero COVID strategy, does have implications for—at the global level through supply chains. And so that is a global implication of a national strategy which we would want to consider when trying to understand the links between vaccine availability and economic outcomes.

Of course, there’s a second side of this global implications of a national strategy, and that’s, of course, as I said, the support—macroeconomic support structure around the pandemic. In the United States, for example, very strong fiscal support directed principally towards capacity to consume that has been associated with a very dramatic rotation towards purchases of goods. This is not news to anybody. Significant import demand. And this combination of the U.S. fiscal support and, to some extent, the China zero COVID strategy, is manifested in global inflation—global inflation. And that’s a macroeconomic consequence of not just vaccine availability, but of policy strategies towards the pandemic as a general—as a general rule.

I want to—against that sort of picture, that there’s a lot of links in the chain and looseness between—just because you have a vaccine available doesn’t necessarily mean it will be deployed, it will be used, it will lead back to normalcy. There are efforts to come to grips with sort of the quantitative nature of the outcomes. The global inflation is an easy one to see around us, but a broader picture of the quantitative effects of differential approaches to—a differential availability of vaccination, and then differential outcomes with regard to the policy strategies towards use and behavioral response—wear a mask, don’t wear a mask, get vaccination, don’t get vaccinated.

And I would refer to some work that’s been done by a professor at the University of Maryland, Şebnem Ozni-Kalemli (sic; Şebnem Kalemli-Özcan), who has—with a team of co-authors has looked at a macroeconomic—global macroeconomic view of different scenarios of vaccine availability, vaccine deployment in terms of time differentials, in terms of country differentials. A hundred and thirty-five countries, sixty-seven sectors. So, you know, it’s pretty detailed. And I think the importance at the end of the day that comes out of that research, it’s probably the most comprehensive at looking at the cross-border consequences of vaccine availability, deployment, and macroeconomic outcomes.

Sort of the bottom line on that is that advanced economies who, by and large, have been able to avail themselves of vaccine, through production or import, that the advanced economies are going to bear a substantial brunt of a lack of vaccine availability, deployment, and behavioral response in emerging markets. So we are all in the same boat. It’s not a, we have our and you, you know, emerging markets, you can, you know, get yours later. The consequences to advanced economies, directly through a loss in export markets, but indirectly as well through the cascading consequences through supply chains, represents a half a percentage point, up to three percentage points of GDP for advanced economies.

So these are very large numbers. It matters whether or not vaccine availability is, in fact, global. And then we have to deal with the issues of how to deploy and what kind of policies to support deployment, and what kind of behavioral response there might be. So we have the numbers are this point, and they are big.

SPAR: Thank you. So let’s—let me leave it there, and hopefully we’ll have a chance to come back to some of those details. Our conversations is not getting any more optimistic, but perhaps that’s what we should have expected. So, Mike, let me turn it over to you now. And if you would sort of comment on this question from the business side. Why should corporations care about this issue of global vaccine equity?

FROMAN: Sure. Well, first of all, thank you for having me. And it’s great to be on the panel with all of you. You know, I think—to start off with, I think it’s interesting to observe that as a time when there’s been a lot of conversation about deglobalization and about the world pulling apart, what COVID-19 has underscored for us is, in fact, the inherent interconnectedness and interdependence of the world, and perhaps in a very stark way Tom really laid out very well on the health side just how our health is very much, indeed, dependent on the health and the vaccine equity around the world. Catherine has done the same, both on health and on the economics.

From a business perspective, I’ll say we’re seeing in our data recovery in many of the industrialized countries, recovery even in areas like travel—at least domestic and short-haul travel. Not long trips around the world, not so much in Asia. But we are beginning to see, at least in the industrialized world, a path towards recovery such that by the 2024 we’re likely to be back where we were pre-pandemic. To Catherine’s point, what really underscores the challenge for businesses more generally is that in the emerging markets outside of China we are seeing, again, quite a big shortfall in recovery, and even by 2024 an expected 5 to 6 percent decline from where they were pre-pandemic. We’ll see some interesting reports coming out of the World Bank and the IMF in the next couple of weeks, but that’s where we’re seeing.

So from a business perspective, this wasn’t—this isn’t rocket science. Businesses thrive when economies thrive. And it’s one reason why we very early on in the emergence of COVID, in February 2020, worked with the Gates Foundation, the Wellcome Trust to set up what’s called the COVID-19 Therapeutics Accelerator, not focused on vaccines but focused on diagnostics, on testing, and on treatments, to ensure that there was also equitable production and distribution of those elements which, of course, we’re now seeing even here in the United States the importance of ongoing testing capacity for managing the pandemic—for managing the pandemic going forward.

And for me, this really underscores just how important the collaboration has to be between governments, international organization, philanthropies, and the private sector. And some of that comes down to funding and things like the accelerator, which reserves manufacturing capacity, which develops new cheap testing mechanisms for developing countries. We wanted to make sure that treatments could be done in healthcare environments that are not fully developed, where you didn’t need to be in hospital and get on an IV for several days to get a treatment but could get a single pill or a single shot in order to be treated. Those kinds of efforts are going to be very much needed, but also the efforts to bring to the table private sector technology and innovation that could facilitate the distribution of vaccines, and the administrative part of this.

And for us, that meant putting on the table with Gavi and The Global Fund our technology which allows a parent bringing a child into a clinic in a developing country the ability to get a digital ID. Because we know 1.7 billion people around the world have no foundational identity. And to begin to track, and for them to have in a privacy protected way an electronic health record so they can go from clinic to clinic, and make sure they’re getting the proper treatment, and be reminded when it’s time to come back for another—for another vaccine. There’s a lot of work to do in this area and we’re just one company. A lot of companies—one thing that accelerator did was crowd in a lot of other support. Not as much support, frankly, as I had hoped to see in the private sector.

It seemed obvious to us that any global company had an interest in getting through this pandemic as quickly as possible, but that has not necessarily led to widespread private sector contributions in this area. I’m hopeful there is more. And there’s a lot more to be done on the philanthropic side as well. And I would simply say there’s an independent foundation called the Mastercard Foundation, which is a $35 billion foundation focused on Africa. It stepped up and did a $1.3 billion contribution on addressing COVID in Africa, including vaccines, developing the infrastructure and supply chain, and capacity building and manufacturing. And I think there’s a lot more that companies and their philanthropies can do in that—in that regard.

SPAR: Thanks. And we may have time to get a little further into the detail of that in a second, but before we turn to questions let me as, if I can, a follow-up question to each of you. I’m trying to push you to get into the details a little bit more.

So, Tom, and maybe this is sort of asking you to draw a fantasy for us, but in an ideal world, like, what would vaccine equity actually look like? And how do we make it happen? It’s a great goal, but how would you actually do it?

BOLLYKY: So, great question. Well, I mean, in some ways the ideal world is the fictionalized idea people had of a pandemic before we started this one. Most novels or movies involving a dangerous outbreak end with the scientists discovering a cure or effective vaccine, and people lining up to receive it. And really, unfortunately, that is to some degree where the problems have started in this pandemic. We’ve seen an increase. Deaths are higher in the first year since we’ve had vaccines by 240 percent over the prior year—and, again, increasing fastest where vaccinations are lowest. The way to think about how to change that are to think about the constraints on vaccination. And there really are three. There are supply constraints. There are demand constraints. And then there’s administration constraints.

In terms of the supply constraints, right now the biggest challenge is—to those really are threefold. One are boosters. The shift to boosters is shifting global production. We keep talking about this pivot to low-income countries’ needs, or lower-income country needs in production. We haven’t quite seen it. Right now close to five billion booster shots are being administered daily. That’s roughly one out of six vaccines being administered daily. It is three times as many as are going to the continent of Africa. It’s ten times as many are going to low-income countries. It also draws in the consumables, the ingredients. You know, the vials or different supplies you need for vaccination are all going towards boosters. It also keeps, from a politicians’ standpoint, makes them reluctant to look abroad when there’s a challenge at home. So that’s one element of the supply challenge.

The other is, you know, we continue to have hiccups. There is a question of whether or not some of the vaccines on which we’re relying on globally will meet their production target. Novavax will be a big thing to watch in this coming quarter, whether or not they can settle their production issues outside of the Serum Institute. If they can do that in the U.S. and Europe. And again, will we have more variants and will we see vaccine companies move to producing vaccines specific for variants? Right now vaccines are still using the Wuhan strain, the original strain. Do we see that shift happening? In which case that will, again, lead to demands on production. So that’s the supply.

You know, can we—

SPAR: Just try and do it real fast, if you could.

BOLLYKY: Absolutely. Can we—can we ramp up supply? On the issue of demand, we are seeing demand challenges on inequity. So that’s really being driven by a few things. One, countries—low-income countries are getting different vaccines than we are, in some cases vaccines that have concerns, and the reason why they’re not being used here. So that may be like the J&J vaccine or AstraZeneca, in terms of some if its regulatory challenges, or the Chinese vaccines. So increasing production of mRNA vaccines is going to be important, and getting them to countries like notice and in a predictable manner, so they’re not getting it right before expiring, is going to be important to deal with some of those demand constraints. As well as building trust in government. Many of these low-income countries have historical limited trust.

The last issue is just administration. And I’m really glad to hear Mike reference the Mastercard Foundation and their investment in that space. But it’s going to take a significant amount of investment to build this—these kinds of supply chains in poor settings. This is not a regular vaccination campaign. We’re going to require two doses for this. So this is different from what you ordinarily see. And again, particularly if we’re using the more effective vaccines, they require cold train and transport. So those are the areas we have to invest in in dealing with this globally.

SPAR: Thanks. And, Mike, let me ask you to sort of follow up on this and touch on what you mentioned earlier. Over the long run, is the issue here really just vaccines? Or are we going to have to pivot to tests, and treatments? And if we can’t even get the vaccine piece right, which is—Tom said it was supposed to be the happy ending, how the heck are we going to get long-term treatment and testing?

FROMAN: No, you’re absolutely right. As we are learning painfully here in the United States as well as elsewhere, it’s not just vaccines. It’s having a robust testing regime, and the capability of doing that at low cost in health care systems that are less well-developed than they might be in other countries. And it’s getting treatments into the field as well, even as we learn about new variants and how serious, or what their implications are. So there’s a lot of interesting work being done on this.

The development of low-cost testing and the rolling out of that in Africa is one example, something that we’ve been working on with Gates and Wellcome, the LumiraDx mechanism. But there’s also work being done on making sure that treatments that are being found in developed countries can be both manufactured inexpensively but also developed in such a way to be delivered effectively in low-income countries. And a lot of work’s still to be done, and maybe it’s a little different, at least on the treatment side, than vaccines is that you don’t have to reach everybody. But as people get sick, they come to a health center and we can get the treatment that way.

The testing one is probably the more difficult one, and perhaps even the more important one over time. And that’s just going to require—we’re seeing in the United States we’re having difficulty getting a full testing regime in place. That’s going to require a lot of ongoing work.

SPAR: And it’ll be interesting to see whether that work occurs in the private sector or in the public developed world, or in the developing world. So questions for another day.

So, Catherine, let me give you the last quick word. And I want to sort of tick it up if we can almost to sort of a philosophical level before turning to questions. You know, given the history of global inequity and, quite frankly, the lack of global ability to deal with global inequity, is there any reason to suspect that we’ll do a better job, or any reason why we should care more about vaccine inequities given the other inequities that still stand before us?

MANN: So that is—that is a big question. There are rich countries and there are poorer countries. And how one goes from being poor to middle-income and then to rich is a—is a vast literature that focuses on many different aspects. Although I have to say by Tom, by putting out supply-demanded administration, kind of—you know, that’s the gamut of why some countries are richer than others, especially on the administration aspects of the development process. So the rich countries have always increasingly been sensitized to global inequity, and is increasingly sensitized to the—you know, the human cost of the developing—you know, lack of development. I mean, lots of pictures of, you know, food famines and natural disasters, and so forth.

But the difference I think between the pandemic and vaccinations is that a failure to come to grips with pandemics abroad have both economic as well as health consequences to people in the rich world. I outlined the economic consequences already. Those are—we can talk about them, we did. But there’s—and those are present, for example, in some climate models as well as, you know, food distribution models and so forth. But the big difference is, is that the negative consequences of health being not addressed—pandemic health not being addressed in the emerging markets has very real consequences for advanced—people in advanced economies through the transmission of the virus and its variants.

And I think that that does change the equation of how much people in advanced countries are—or not everybody in advanced countries—but people in advanced countries should care about having global vaccine equity and deployment.

SPAR: So perhaps not the most—the prettiest argument for caring, being self-interest, but as Mike said earlier, if you want, you know, evidence of globalization, this is about as palpable as it gets. So with that, let me—let me open the conversation up for questions. I’ll ask you to recall that this meeting is on the record. So the operator will remind you of how to join the question queue. And we will just take it from there. So, Teagan, could you give us our first question?

OPERATOR: Absolutely.

(Gives queuing instructions.)

We will take our first question from Shannon Kellman.

Q: Good morning. Thank you all so much for doing this. This has been a great discussion so far. My name is Shannon Kellman. I’m with Friends of the Global Fight Against AIDS, Tuberculosis and Malaria.

And I’d like to pick up essentially where the last question left off, which is: How do we change minds with regards to vaccine equity, certainly, but also with regards to testing and therapeutics equity within donor markets? That is, the U.S. has played a lead role in donation of both product and money in the overall COVID response for vaccines and therapeutics, and diagnostics, every piece of this. And we have seen not nearly as much interest from other donor markets, particularly other high-income markets, in contributing both doses and monetary contributions. And how do we shift some of that so that we are able to tackle the pandemic fully and end it as quickly as possible not just through vaccines but through other tools available to us? Thanks.

SPAR: Mike, maybe you could take the first stab at that? You mentioned a little bit of what seemed like frustration about the lack of others joining Mastercard in this fight.

FROMAN: Yeah. Well, so I guess I would take it on in two parts, I mean, with my current hat and my old hat. You know, I think that to the point of the question, if we look historically frankly it’s been naming and shaming governments into doing more. And I think advocacy organizations, like your own, as well as the One Campaign and others have done a very good job over the years of dealing with G-8 and other countries at a high level, getting them to commit, and then holding their feet to the fire to deliver on their commitments.

And it’s, frankly, always imperfect, but it requires that kind of effort. And I would focus maybe initially on the G-8 but go broader than that precisely for the point that Catherine said. Which is that this is clearly a pandemic with global implications for every country. No country can avoid it. It’s a terrific example of a collective action dilemma. And we just need to be able to break through by calling on leaders to do more and then making sure that they deliver on those promises.

On the private sector part, I think, you know, we and others will—and I don’t want to understate the number of private sector companies that have committed and done things. There’s been a lot of remarkable activity across the private sector. But here too, I think we can all do more to crowd in our colleagues from other countries and make it easy for them—whether it’s through these kinds of coalitions with the Gates, with Wellcome Trust, or others—to allocate resources in a way that they’ll have confidence it will be spent well and address this global need.

SPAR: Tom or Catherine, do you want to jump in on this as well?

MANN: Just sort of jumping in on the—I think that there’s an element of ramping up the global appreciation by governments around the world—global appreciation of the global consequences. I think the last two years, frankly, tremendous national scramble for getting the vaccine, getting it deployed themselves within their countries, scrambling, and now sort of turning to, whoa, there’s this global aspect to it and we need to address that, you know, promptly. The G-20, for example, has come out in their statement for a vaccine pledge.

And I think that’s an important voice for—to show commitment on the part of a broad-based set of governments, both—on sort of both the donor side and the recipient side. So that’s important. And I think that as much as we wanted to move fast two years ago, I think governments were focusing on moving fast for their own constituents. And now they’re looking at the consequences of not having addressed the global implications, the fact that these are large, that these are macroeconomic, you know, and, of course, a moral and health imperative as well. Now turning the attention to how do we make this happen on the global basis?

BOLLYKY: Debora, can I just add one point to that?

SPAR: Of course.

BOLLYKY: We should not ignore the whole network of international financial institutions, like the World Bank, like the regional multilateral development banks. And there’s great demands on them, including to ramp up their efforts on climate, which is obviously critical. But coming up with creative ways of using the collective balance sheets to support manufacturing in more countries and infrastructure in more countries is exactly the sort of thing that they ought to be pushed to do as well.

SPAR: Great. Teagan, why don’t we move to another question?

OPERATOR: We will take our next question from Craig Charney.

Q: Hello. I’m following up on something that came up in one of the earlier panels with Jennifer Nuzzo, when she mentioned that a study had been done by the IMF suggesting that it would cost only about $50 billion to vaccinate the world. At an age where Congress has been throwing around, quite literally, trillions of dollars, this is a stunningly small sum. Obviously, we’re looking at a political failure here, but can any of you comment on what this political failure was and how it can be addressed?

SPAR: Thank you very much. Tom, do you want to take the first stab at that one?

BOLLYKY: Sure, I’ll say a couple of things.

SPAR: And if you could just comment also if you think the $50 billion figure is, in fact, one you’ve heard as well.

BOLLYKY: It is. It’s from a report I think came out last May by the IMF. It’s the figure they’ve used.

So I think fundamentally we’ve been treating vaccine equity as an aid problem when it’s more an issue of national self-interest and it’s more akin to how we pursue foreign policy, national security, trade issues like that, where there’s an exchange of benefits going on here. We’ve approached this fundamentally in the wrong way. I think that’s occurred in part because political leaders are accountable to their own population and want to be perceived as addressing those needs first and are held less accountable for the indirect effects of vaccine inequity globally. I also think that people have been pennywise and pound foolish in this pandemic over and over again, where we continue to believe that we will be able to address our needs first and then pivot to global needs.

So we don’t need to invest in scaling out production early because we will use the same production we had for domestic needs and then direct it globally. And that’s been proven wrong again and again, where new variants will emerge in part because of under-vaccination globally, circumstances will change, we’ll see increased surges. This is not a surprise to people in health. People have been talking about the emergence of variants as a reason for addressing global vaccination and having a different approach, but unfortunately people had been very slow to embrace that. I think fundamentally it boils down to accountability, and a lack of understanding about how significant both the health, economic, and diplomatic consequences are of underinvestment in vaccination abroad.

SPAR: So, given the sort of political circumstances, not only in the U.S. but in the rest of the world, do any of you think, can we reshape that narrative? I mean, can we now turn this into a national interest story? Or is it—or is it too late?

FROMAN: I think it’s possible, Debora. I think we have to put it in the context of the fact that there’s been a lot of anti-global cooperation sentiment that’s been stirred up, at least in the United States, over the last few years. So that’s creating a context—even under—even without that it might be difficult to do this. With that, it makes it even more difficult, but all the more—all the more important. It’s going to require leadership and it can’t just be the U.S. And it’s the reason I go back to the G-8, or the G-20, or coming up with a coalition of the ambitious on this who are willing to come together and say exactly what Tom said, which is: We’ve been looking at this the wrong way. And this is not about giving something away to poor countries. It’s about addressing our own self-interest. And, you know, that’s, I think the pivot that needs to happen. But we’re fair distance from there.

SPAR: OK. Catherine, do you want to jump in on that as well?

MANN: The point that I think is relevant is that there has been generally the view of wanting to look inward. We see this in trade patterns and so forth. And when you look inward, you do look—you know, you do look at your national interest as being inside. And so to some extent, as I think, Mike, you said, you know, from the very beginning, this is a rude awakening that globalization is not behind us. Globalization is part of the fabric of both health and economics. And so as much as you might want to turn your back on the rest of the world and be internal, you can’t do that. And you shouldn’t do that, right? You can’t and shouldn’t.

SPAR: Yeah. Thank you. Teagan, let’s go to another question.

OPERATOR: We will take our next question from Tyler Godoff.

Q: Hello, everyone. Thanks for a great panel.

I wanted to ask a question about vaccine mandates and just generally your views on them. One can see how mandating populations to do anything could end up in a really dangerous spot. So very challenging situation. How are you thinking about that, if you were in a position to craft policy?

SPAR: A good, tough question. Who wants to take that one?

FROMAN: I think Tom does.

BOLLYKY: (Laughs.)

SPAR: Tom, you’ve been cold called.

BOLLYKY: I will. Your question is timely, Tyler, as you may know, because the Supreme Court is hearing argument just today on this very question about vaccine mandates, although less about the government’s ability to order them than which part of the government is able to order them. Is public health a state and local matter or can mandates be issued by the federal government, and OSHA in particular? It’s a really good question. I think the outcome we want to avoid—there are two policy priorities here.

Obviously, we need to get more people vaccinated. Until we do domestically, we’ll continue to have these challenges and the same is true for other settings. Globally there is a portion of the population that has been reluctant to do so. And the question is whether through increased vaccine mandates as part of a broader program of support can boost those vaccination rates. So far, the answer seems to be yes, although less—more modestly than people had hoped. But that may be in part because they haven’t been fully implemented due to legal challenges.

The second issue though is really important, which is the last thing we want is all vaccines to be politicized. If this becomes an issue, another issue of a red-blue divide in this country over vaccinations, that’s just a disaster. Because that has historically not actually been true, that vaccine hesitancy hasn’t been tied just to political preferences. And it’s not entirely true now, but we’re seeing that emerge more and more over time. And we have to be very careful with the messaging around vaccine mandates to try to avoid that outcome. But in this particular case, it seems to be driven by in part a desperation to get this pandemic behind us. And, you know, that’s an understandable amount of frustration, given what’s been happening.

SPAR: Mike or Catherine, do you want to express a view?

MANN: Nobody wants to touch this one, it appears.

SPAR: (Laughs.) All right.

FROMAN: The only thing I would add to it—and I very much agree with Tom’s point about the importance of avoiding politicization, which has become unfortunate in this area—is that, you know, we’ve been talking for the last half-hour about how we’re all interdependent and how our health is very much a function of our capacity to get vaccines into the arms of people halfway around the world. The same is also true to a certain degree domestically, where, for example, the health or our healthcare system and whether it is overwhelmed by patients is affected by what percentage of the public gets vaccination. So hopefully science would be enough and people would decide that it’s in their interest and in the interest of their community to get vaccinated. But in the absence of that, we are all very much affected.

SPAR: It is a horrible irony that we’re reaching this moment of sort of peak interdependence at the same time we’re reaching what certainly feels like a moment of peak division, which, you know, is really tough.

Teagan, can we take another question?

OPERATOR: Certainly. We will take our next question from Nicholas Bratt.

Q: Good afternoon. My name is Nicholas Bratt. I’m global portfolio manager at Lazard.

In view of the impact that zero COVID is having on China’s economy, in particular business activities in the world with exporting and importing, what is the likelihood that at some point they will conclude that it’s no longer the best policy to follow?

BOLLYKY: I think the—and I have a colleague who follows this quite closely, Yanzhong Huang, so I do recommend his work on this area. But what I will say quickly is that on this point I think a lot of it depends on whether you continue to see the degree to case spreading in China, as we have, whether they’re forced to give it up. I think a lot of people believed prior to—as you know, there’s an important event coming up for President Xi in terms of his appointment to a third term. I think they’ve been reluctant to shift off zero COVID prior to that. Whether the Olympics or cases getting up to 1 percent, which is what a lot of people think with Omicron makes it unsustainable to have containment once you get to about 1 percent of the population that has contracted the virus—if we start to see outcomes like that, you may see them pivot. But the conventional wisdom is ahead of that political calendar they’re going to be reluctant to do so.

Q: Thank you.

SPAR: Thanks. Teagan, why don’t we go to another question?

OPERATOR: We will take our next question from Bhakti Mirchandani. Ms. Mirchandani, please accept the unmute.

Q: Hi. Bhakti Mirchandani, Trinity Church Wall Street. Thank you for a wonderful panel.

Earlier on in the pandemic in the United States there was a lot of talk about the pandemic being less pervasive if there were paid leave. I would love to hear your thoughts on how that impacts the pandemic across the world. It’s not possible in every country. But would just love your thoughts.

SPAR: Thank you. Catherine, would you mind starting that one? Do you have a sense on sort of the economics around—and the behavioral response around paid leave?

MANN: When we go back to how governments initially responded to the pandemic, there were slightly different approaches by different fiscal authorities around the world, but they all had a much stronger social safety net. In the U.S., the focus was on unemployment compensation, topping that up as people became unemployed when sectors were closed down. The European approach was a little bit more focused on maintaining employment relationships with sort of the cost consequences being borne by the fiscal authority, the firm, as well as, to some extent, the worker. So at the initial phases of the pandemic paid leave was really not an issue because there was support—financial support through one mechanism or another, and businesses were closed down.

As we—you know, as we move along in terms of the pandemic, and the mechanism for trying to contain it has changed from lockdowns—although, you know, in some cases some countries are still using that as a—as a strategy for containment. As we move away from that, you know, the question is the balance of containment strategy being should firm close or should people who have been exposed be—you know, stay home? So that balance is different in different countries, and certainly in different sectors. Indeed, countries have different approaches to paid leave or sick leave. So at this point, I think it’s a little—it’s hard to say, especially whether paid leave is a critical element for maintaining economic activity as well as maintaining individual purchasing power.

I mean, both of these are important for—you know, for proceeding along an economic growth path. And we were trying to recover from this. Different sectors are recovering differently, and different kinds of firms or different kinds of workers are recovering differently. But we have to consider not only sort of the worker side, but also the firm side of moving forward. And so paid leave when people have—some people, at least, continue to have savings based on previous approaches to topping up unemployment, the additional childcare credit—which unfortunately just expired, but hopefully will get renewed at least in the United States. These are—these are avenues for trying to support a strategy for workers as well as these strategies that have been put into place previously for firms.

SPAR: Thank you. And, Mike, do you have any thoughts on sort of the corporate piece of this?

FROMAN: Yeah, as I was listening to Catherine, I guess I’d say two things. One is while large companies represent only a—only part of the employer base in an economy—it’s always the small businesses that are the backbone of the—of the economy, there is work to be done by large corporations, and virtually all of them are doing it, to find ways of introducing greater support and flexibility into their paid leave and sick leave programs during COVID, because none of us know exactly how this is going to pan out and what our employees are going to need, both for physical health and very much for mental health, throughout this crisis.

And then secondly, it’s a topic way beyond this panel, but the whole issue of returning to office is something that every country is wrestling with. We’re all, I notice, zooming in from home. We have the privilege of being able to do that. And most of us have probably been able to keep our work going from a remote location during COVID. Many people don’t have that luxury and have to wrestle with dealing with the health risks in person if they want to keep their job. But all companies are also now wrestling as Omicron becomes pervasive with what is their return to office strategy? How much flexibility do they need to introduce? And over the long run, what kind of hybrid arrangement we’re likely to see, which may also create that additional flexibility that Bhakti was talking about.

SPAR: Thank you. Yeah. It’s hard to imagine the workplace two years from now looking anything like it did three years ago. Hopefully, we just get out of guest bedrooms at some point in time. Why don’t we—I think we have time for one last question. We’re going to have to shut down a minute or two early because folks need to get elsewhere. But, Teagan, can you give us a final question?

OPERATOR: We will take our last question from Cathy Taylor.

Q: Thank you. Cathy Taylor. I’m a fellow at the Penn Wharton Budget Model. Thank you not only for your comments but your commitment to progress in this area.

And perhaps since we’re ending, a light—or a point of light in this dreary story is the nature of the public and private sector partnership that has unveiled itself through vaccine development. Far different from the often more theoretical relationships that have characterized past partnerships. I’m wondering you could comment on what we’ve learned from this that we can carry forward? What as the public sector done really well and what has the private sector done really well, and how do we carry those lessons forward into other types of public-private sector partnerships that are really meaningful?

SPAR: Thank you, Cathy. I was worrying to the panelists at the beginning here that there was going to be no way to end this on an upbeat note, but I think you’ve actually managed to create that possibility. So, Mike, you touched on this and, Tom, I know, as well. Could you say a little bit about let’s try and get a positive story here, if we possibly can?

FROMAN: Sure. Look, I think, to Cathy’s question, the remarkable speed with which the private sector produced vaccines in response to this pandemic should not be overlooked. And some of that was done with very substantial government support for some of the companies. And so that, I think, has been an important part of that collaboration. Reserving and building our manufacturing capability for vaccines and treatments I think is a place where there could be good private-public cooperation. We don’t always know exactly what it is we’re going to be manufacturing, but we know we’re going to need manufacturing capability, and make sure that we can do it, and do it in a way that can also lead to the equitable distribution of the product.

So I think there is, to Cathy’s point, there’s been some very good public-private collaboration and some innovative ones. I think most of the innovation comes from the private sector. But the public support and the support for the infrastructure necessary to get the products of that innovation to market, and particularly to low-income countries, is going to be absolutely critical.

SPAR: Thanks. And Tom, as we have just a minute or two remaining, maybe is there an example that you’re familiar with, something you could share that does create a template, at least, that we can get—become optimistic about?

BOLLYKY: Yeah. And I think it cuts across the last two administrations. I think there’s a lot of credit that should be given to Operation Warp Speed and its successor in the Biden administration. It really did quite a job of not only subsidizing vaccine production but also building the supply chains, matchmaking, investing in all the elements you would need to meet global production, and to do so in a remarkably fast time. The previous record for developing a vaccine—novel vaccine was four years. We did it in ten months. And they’re among the most effective vaccines we’ve ever had. That’s remarkable. And it really is a public-private partnership that produced it.

We need to see more of that on the global level moving forward, to have that cooperation. I do think a lot of government people were concerned about a lot of seizures, a lot of supplies. But by and large, everyday trade went uninterrupted of the supplies. Billions of doses have moved across borders. And if something could be said for governments and private sector meeting those commitments. So I do think on that side there is an element to build. It’s the point where the movie starts to shift about working with the broader public and ensuring production meets global needs that we need to work on.

SPAR: Yeah. And it is—it is a nice point to remember in an otherwise, you know, scary story that, Thomas, you mentioned at the beginning, you know, the happy ending of the movies actually did happen. You know, we got these vaccines, these cures, these treatments, these supplies in extraordinarily rapid periods of time. And so hopefully we can start figuring out some of these other pieces, even if it’s by a reference to self-interest which, as we know, is a pretty good incentive for all of us frail human beings.

So I know we’re going to end just a moment early today. But let me thank everyone here for joining the conversation. In particular, thank you, of course, to our incredible panelists. And I will remind everybody that the video and transcript of the meeting will be posted and available on the CFR website. So thank you for joining us and I hope everybody enjoys the rest of their day and the year.

BOLLYKY: Thank you.

MANN: Thank you.

FROMAN: Thank you.


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