Development assistance in the pandemic era

It is again amply clear with the recent upsurge in Omicron variant across geographies, that the global threat due to Covid-19 pandemic does not recognise borders and can only be overcome through coordinated global action. Amidst this the importance of development assistance assumes significance to address the devastating health, social, economic and security impacts on people around the world.

During November 2021, the OECD’s Development Assistance Committee (DAC) met to discuss over how to treat and price donated vaccines for purposes under aid. Consequently, on December 8, 2021 it issued a note where it proposes to double the price per vaccine to $6.72, from an earlier proposal of $3 per dose.

Further the wealthy economies have also failed to decide whether to consider the donations of excess Covid-19 vaccines as aid.

Almost two years since this pandemic broke out, and the global community has still not come to a consensus on tackling this virus. This is disheartening as the priority should be to make all human beings on this planet secure from Covid-19, rather than continuing to delve into means to make greater profits.

It may be recalled, according to various news reports, the developed economies had wasted millions of doses of crucial and much needed vaccines since they got expired as people did not turn up. The irony is that the redistribution of such surplus vaccines in time to many of the emerging or less developed countries could have been of immense help to those countries.

The vaccine inequity gets further displayed through the number of people immunised.

More than a year into the pandemic, the African continent has been able to fully vaccinate just around 3 per cent, and lags far behind Europe (nearly 50 per cent), North America (44 per cent), South America (33 per cent), and Asia (32 per cent). Given the huge scope for inoculation in the months and years ahead, it is important for DAC to work along with the vaccine manufacturers, to make them affordable for greater good.

In fact, in November 2021, prior to OECD’s DAC meet, the G20 members met in Rome and responded to the Covid-19 crisis by setting up a Health and Finance Minister Task Force. The surprising thing was that it was set up 24 months after the pandemic broke out, and more so the Task Force failed to express any financial commitments, immediate or future, to combat the pandemic.

Need for concerted effort

Given the lack of coordination, the broad contours of development assistance need to be relooked, and its purpose needs to be attuned with common fight against pandemic. This could also be widened beyond access to vaccines to creating health infrastructure. ODA recipients will benefit significantly through such a mechanism.

It may be recalled that the concept of aid, or ODA, has its roots in the Charter of the United Nations, 1945, with the first such aid being provided by the US to its European allies through the Marshall Plan. Results of this was successful with development finance and aid cooperation becoming a powerful tool to boost economic growth by augmenting productive investment and technical knowledge.

Today a similar effort would be required towards healthcare for all. Most of the less developed countries globally need capital to rebuild themselves as they deal with this pandemic, where people have lost lives, jobs, and are still reeling under lack of access to vaccines.

Development assistance in the form of long-term concessional loans and grants, through investments in healthcare infrastructure would have a multiplier effect on the GDP growth, which could be combined with soft capacity building investment in the form of vaccines. It may be noted that healthcare has always been recognised as a necessary pre-requisite for economic development and progress and not a consequence.

Many economies are bereft of any support and to them development assistance is crucial amidst this pandemic. As the Omicron variant soars globally, DAC along with other emerging economies should take cognisance of the reality, for the benefit of the whole world so that as many vaccines could be distributed as possible, while simultaneously creating heath infrastructure.

Hence a reasonable and a collective approach is required by countries which are genuinely interested to make a difference.

The writer is an Economist with India Exim Bank; Views expressed are personal

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