The United Nations is warning that so-called developing countries will suffer losses of $12 trillion to their economies through 2025 as a result of the COVID-19 pandemic, while the slow rollout of vaccines will only make matters worse.
The figure is trimmed to $8 trillion if China is excluded, said Richard Kozul-Wright, the director of the U.N. Conference on Trade and Development’s globalization and development strategies division. The Geneva-based agency, which released its findings Wednesday, considers China a developing economy.
Calculations from UNCTAD also predict that in terms of lost income, delayed vaccinations alone will cost the world $2.3 trillion by 2025, with about $1.5 trillion of that hitting lower-income nations.
COVID-19 vaccine inequality widens gap in global recovery, IMF says
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UNCTAD’s figures show a divergent recovery. It estimates that global growth will hit 5.3% this year. “But underneath this, there is a lot of fragility, and the disparity among countries is very apparent,” Kozul-Wright told Devex. “This is a big hole in the finances of developing countries as a result of COVID-19.”
What about IP waivers? UNCTAD said it welcomed the White House supporting waivers for intellectual property related to vaccines but expressed concern that other leading countries were not following suit. This week, over 140 former heads of state and government and Nobel laureates issued a call for Germany’s next chancellor to waive IP rules.
What’s next: UNCTAD warned that the economic rebound this year is largely technical, in that the numbers are high now because last year’s contraction was so sharp. Next year, growth is expected to slow, and lower-income countries will experience negative consequences if advanced economies begin to pull back on spending.
“A lot now depends on policy choices — in particular, the ones that advanced economies make — over the next few years,” Kozul-Wright said, adding that austerity measures could stifle global growth.
About the author
Shabtai Gold
Shabtai Gold is a Senior Reporter based in Washington. He covers multilateral development banks, with a focus on the World Bank, along with trends in development finance. Prior to Devex, he worked for the German Press Agency, dpa, for more than a decade, with stints in Africa, Europe, and the Middle East, before relocating to Washington to cover politics and business.
