Covid-19 could cost MW, others, $12tn—UN

Developing countries, including Malawi, could lose about $12 trillion through 2025 due to lack of vaccines and money that wealthy countries use to stimulate their economies.

This is according to an analysis by the United Nations Conference on Trade and Development (Unctad) published last week.

In its 2021 Trade and Development Report, Unctad observed that due to a lack of policy independence and vaccines that advanced economies take for granted, many developing countries are facing a cycle of deflation and despair.

Unctad said failure to roll out vaccines will, alone, knock $1.5 trillion from incomes across the South.

Unctad Secretary General Rebeca Grynspan said in the report that only a concerted rethinking of priorities holds out hope of addressing the inequality and climate crises that have come to define our era.

She said: “The global recovery from the pandemic must reach beyond emergency spending and infrastructure investments to embrace a reinvigorated multilateral model for trade and development.

 On his part, UN finance expert and head of the religious development group Jubilee USA Network Eric LeCompte said that without more aid, there is little chance that poor countries can meet development goals.

“Debt relief must move more quickly and must include all developing countries mired in this crisis,” she said.

The report welcomed the $650 billion in emergency reserve currency, also known as Special Drawing Rights (SDR) by the International Monetary Fund (IMF) to fight the pandemic.

But UN agency has warned that the resources fall short of the current needs of developing countries.

Last month,  IMF approved $189 million (K155 billion) financial support as part of the IMF’s $650 billion SDR—monetary reserve currencies  aimed to supplement reserve assets of member countries—to boost global liquidity amid the Covid-19 pandemic.

SDRs are being distributed to countries in proportion to their quota shares in the IMF which means about $275 billion is going to emerging and developing countries while low-income countries, including Malawi will share $21 billion.

On Wednesday, President Lazarus Chakwera expressed frustration over inequalities and disparities in accessing Covid-19 vaccines across the globe.

In a pre-recorded contribution to the General Debate of the 76th Session of the United General Assembly (Unga) currently underway in New York, United States (US), he pleaded with developed countries to release both the vaccine doses and vaccine production rights immediately.