疫苗融资：重新设计的国际货币基金组织工具如何为全球大流行应对提供一剂强心针.docx

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1、Vaccine Financing: How a Redesigned IMF Instrument Can Provide a Shot in the Arm for the Global Pandemic ResponseJohn Hicklin And Hahnah BrownA new IMF rapid credit window could provide some $30 billion to cover the vaccine financing needs for most developing countries through 2021-22. The mechanism

2、 would facilitate collective action to negotiate increased production, the main obstacle to achieving vaccine coverage and rectifying the gross inequities in current distribution. It would remain in place for future global pandemic responses.COVID-19 vaccine production lags far behind demand, especi

3、ally from developing countries. Low- and middle-income countries (not counting China and India)some 3.6 billion peoplewill not have full access to vaccine until beyond 2022, leading to tragic loss of life, a delayed global economic recovery, and increased risk of new variants extending the worldwide

4、 pandemic. This outcome represents a major failure of international cooperation. It results from an inadequate advance ramp-up in global production, and inadequate initial financing. The IMF can play its part in addressing these two shortcomings by urgent redesign of its main rapid response instrume

5、nt to be even more effective than it was in 2020. For the still urgent needs of this pandemicand for the futureit could provide immediate financing to bolster initiatives, including along the lines of COVAX, that empower developing countries with greater collective clout to negotiate the required in

6、crease in production.We propose a new Multilateral Vaccine Purchase (MVP) window within the IMFs Rapid Financing Instrument (RFI) and its concessional equivalent, the Rapid Credit Facility (RCF). Countries could access up to 25% of IMF quota under this window annually, 50% cumulatively, for advance

7、vaccine purchase. These amounts would be in addition to other access under the RFI/RCF (currently 100% annual/150% cumulative under the regulai and exogenous shocks windows; and 80%/133% under the natural disaster window). The MVP window would remain in place for future pandemic need. It would be av

8、ailable to all member countries, though demand would be expected to come mainly from low- and middle-income countries.The shortfall in vaccine financing to developing countries can be estimated only very roughly at some $24 billion for 2021-22, though such a figure is highly dependent on assumptions

9、 of cost, which vary widely, commitments and delivery schedules, and coverage of population. Assuming $10 per person, the cost of vaccines for the whole population of these 129 countries would be $36 billion. Two-thirds of the population of these developing countries could be left without vaccine co

10、verage based on estimates of existing contracts to supply only one third. For estimates of commitments by country, see for example, uCovid-19 Deals Tracker: 9.60 Billion Doses Under Contract, Bloomberg, 2021. For an earlier analysis of the lack of coverage for developing countries, see Anthony D So

11、and Joshua Woo, 2020. The coverage appears even lower (under 10%) for low-income countries alone. These figures may be incomplete, yet coverage could be still lower if deliveries are delayed, or much higher if rich countries reallocate some of their commitments, which in some cases are for multiples

12、 of their population.Access under the new MVP window would be sufficient to cover the vaccine financing needs for most, though not all, developing countries. If all low- and middle-income countries (not counting China and India) were to draw enough from the MVP source alone to fully vaccinate their

13、population at $10 per person, IMF disbursements would total $31 billion$8 billion for countries eligible to draw on the Poverty Reduction and Growth Trust (PRGT) and $23 billion for others from the IMFs general resources. Not all of this amount would be required for 2021-22, since many countries hav

14、e at least some vaccines already paid for, alternative sources of finance, or no balance of payments need. On the other hand, some 27 countries would have a residual gap that is not covered under the proposed MVF access limits, totaling $5 billion in the absence of any other funding. In general, acc

15、ess limits are more binding for poorer countries paying the same per person for vaccines as richer countries (See Figure 1). To ensure they are not left behind, these 16 low-income and 11 lower middle-income countries (20 from Africa, 4 from South Asia, and 3 from Southeast Asia) would depend on oth

16、er sources of funding to close the gap (and for all but 8 of them the gap is less than potential access remaining under other RFI/RCF windows). For details on RCF and RFI approvals, see “COVID-19 Financial Assistance and Debt Service Relief IMF, 2021 and “IMF Data Query Tool； IMF, 2021. If financing

17、 needs were higher than $10 per person, IMF disbursements would be higher in total under the MVPs proposed access limits, though more countries would have to use or seek other financing to ensure full coverage.Meeting the immediate balance of payments need to finance countries, advance purchase of v

18、accines is one step in the process of ensuring a signiflcant increase in vaccine production capacity worldwide. The innovative COVAX scheme has provided access to vaccine supplies to many countries but could have been empowered to do much more. The slower-than-desirable ramp-up of vaccine production

19、 reflects the failure to anticipate the full global need, and insufficient collective demand by low- and middle-income countries backed by immediate financial support for COVAX; full payment was required in advance to place large orders quickly. Consequently, COVAX had a weaker position to negotiate

20、 scaled-up production.The strong presumption behind the IMF making foreign exchange immediately available under the MVP is that countries will channel these resources through COVAX or similar initiative in response to a call for advance purchase commitment. Though the aim is to empower countries thr

21、ough collective action, there may be instances in which COVAX would agree to countries making alternative arrangements to secure vaccine in the context of a coordinated international effort to increase supply. The onus will be on COVAX or similar initiatives to negotiate well on both supply and pric

22、e; and to procure scaled-up production, notjust compete with rich countries over existing supply.Figure 1. Vaccine Cost as a Percentage of IMF Quota for Low- and Middle-Income Countries12128 6 4 2 (puesnow SSD -no) d8Bd da。LCAMYSRUSMDVMEXARGKAZTURMNEBRADOMTKMBIHJAMTONAZEJORWSMDJIVUTCOLECU IRQALB IRN

23、BWAGAB LBI VCT srbBLMDAGEOSTPZMBPERPRY5%ARM XKX SLV DZAZWELBRSLB PNGNICCOG MRTLSOGTMMNGLKAbtnmarHNDCIVIDNB0L PHLEGYAGO GHA KGZGMBSLE CAF25%VNMcomSSD TJK yem tgoyemLAOSYRTLSSEN NGACMRRWA CODBDIM 网50%KENKHMBENMMRPAKBGDTZA MOZafg mwiS0M 75%100% 125% 150%Cost of Vaccine Coverage expressed as Percentage

24、of IMF Country Quota(assuming $10 per person/100% of population; log scaled)Note: Not shown are Ethiopia and Sudan, who both have vaccine costs greater than 150% of quota (261% and 177%, respectively) and Venezuela (5% of quota) whose GDP per capita at current exchange rates is about $17,000. In pri

25、nciple, all high-income countries are not shown here. Data for GDP and population are 2019 or most recent available.Source: /zWorld Development Indicators/World Bank, 2021.“IMF Members Quotas and Voting Power, and IMF Board of Governors/* IMF, 2021.“SDR Valuation,“ IMF, 2021.The IMF could make its v

26、oice heard with member countries and in international fora to urge the importance of cooperation in securing greater manufacturing capacity. A prerequisite would be much greater transparency about commitments and projected vaccine coverage. The IMF could also support streamlining vaccine approvals a

27、cross jurisdictions, by standardizing application procedures; considering advance legal authorization to trigger mandated vaccine production-sharing arrangements between drug companies, who may lack incentives to manufacture vaccines; and formulating plans in advance to procure ingredients and count

28、er protectionist behavior. The speed at which lives are saved and the global economy recoversin this or a future pandemic-depends on such initiatives.Proposing this innovation raises the following questions on the appropriate role of the IMF:First, should IMF lending be directed at purchases of a si

29、ngle commodity? The IMF would not buy the vaccine itself but enable member countries to do so, for a broader purpose. The squeeze on foreign exchange faced by many countries during the pandemic reflects an immediate balance of payments need that is exacerbated by the costs of vaccine purchases and r

30、elated medical supplies. Moreover, in the absence of a rapid acquisition of vaccine, the pandemic will be prolonged, the economic recovery delayed, and the balance of payments difficulties exacerbated. In supporting a countrys policy of advance vaccine purchases, the IMF lending therefore meets a ba

31、lance of payments need and helps to alleviate the risk of protracted balance of payments difficulties. The IMF has not in the past been averse to supporting multilateral schemes focused on one commodity. Between 1971 and 1984, the IMF responded to what was then seen as an important problem一it lent t

32、o countries that were required under international agreements to purchase buffer stocks of their export commodities at times when prices would otherwise be cyclically depressed. International agreements on tin, sugar, rubber, and cocoa were approved by the IMF and credits were extended to 18 countri

33、es, from Australia to Zimbabwe. For details of the buffer stock financing facility, see Boughton, 2001. If IMF approval was warranted to help countries finance their purchases of tin, sugar, and rubber under international agreements to stabilize commodity prices, it seems quite apt in a modern conte

34、xt to help countries finance advance vaccine purchases under a multilateral arrangement to save lives, stabilize a pandemic, and mitigate its economic consequences.Second, why the IMF and not institutions with expertise in health care? The responsibility for the provision of health care, negotiation

35、s over the contracts to supply vaccines, and the development of capacity to produce and distribute vaccines, all firmly belong in the domain of other international organizations and national governments working together. The IMF is the global institution with an unparalleled ability to provide immed

36、iate balance of payments financing, as in this case, while supporting other multilateral efforts. To ensure appropriate accountability, the IMF Executive Board (analogously to its role in the buffer stock financing precedent) would first approve an international arrangement for pandemic response tha

37、t would include calls for countries to pool funds to make advance purchases, specifying the range of items covered. Member countries would then request drawings under the MVP window that conform with the terms of those arrangements. Such procedures would make clear that the IMF was supportive of the

38、 international efforts but was not involved in the detailed design and implementation of the scheme to meet particular health care needs.Third, why arent existing IMF financing instruments sufficient? The proposed window has advantages not present in other financing options. The balance of payments

39、need is the same, but the speed and effect of the windows operation is different. When a multilateral scheme such as COVAX makes a call for upfront financing from countries to negotiate ramped-up production, only a specific window such as the MVP with no conditions can mobilize the financing suffici

40、ently quickly. The schemes effectiveness relies on encouraging as many countries as possible to subscribe fully upfront-and in a very short time period-in order to pool their collective clout. The early commitment to COVAX is important, even if there is, at that stage, doubt on the timeline for appr

41、oval and availability of vaccines. Delays to discuss broader policy understandings, as under other windows in the RFI/RCF, beyond a commitment to cooperate with the Fund, would hinder effectiveness. Importantly, with no stigma attached, the proposed window should encourage as many countries as possi

42、ble to participate in this collective action given the domestic and global benefits, even attracting those who have not sought recourse to IMF financing. Indeed, many countries do not draw fully on their reserve tranche or SDR holdings, let alone apply for a “first credit tranche, loan that has no c

43、onditions or phasing. They may still welcome access to such vaccine financing while preserving foreign exchange reserves.Fourth, should the IMF take the risk of extending loans under this window? In the broad picture, the additional exposure under this window with the proposed access limits is unlik

44、ely to exceed $30 billion, amounting to only some 3% of the available financing from the IMF. The IMF has stated its lending capacity to be $1 trillion. See Questions and Answers: The IMFs Response to COVID-19? IMF, 2021. (To get some sense of proportion, this amount pales in comparison to the size

45、of recent $1,900 billion rescue package in the United States). For details of the March 2021 package, see The White House, 2021. That said, the IMF must always place appropriate safeguards on its loans, this window included. Individual country exposure of the IMF with such limited access (up to 25%

46、in the first year) could still, within the scope of cooperating with the Fund, oblige future safeguard assessments. Against any potential risk to the IMF of subsequent inability of some countries to repay, alternative risks should also be assessed. Much larger risks flow from a delayed global recove

47、ry and from larger calls on the IMF if the pandemic is prolonged, in part caused by delays in vaccine access. Even countries in debt distress would therefore be allowed this limited access to the IMF and, better still, donors could contribute grants to cover the drawings to finance the advance purch

48、ase requirements or provide a large effective grant component through subsidy schemes. As noted, up to 27 countries would in any case require some financing from own resources or donors if their vaccine needs exceed the proposed cumulative access limits.The MVP window should help mitigate the inequi

49、table global distribution of vaccines that has left behind many low- and middle-income countries; the RFI/RCF more generally is designed to alleviate the equally dramatic unevenness of financial support across countries to absorb the Covid-19 economic shocks. Advanced economies have injected an average of so