Does New Zealand risk being left behind in the race to rollout COVID-19 vaccines?
The rapid development of COVID-19 vaccines has offered hope that we will one day soon see countries returning to a semblance of normality. However there is no doubt COVID-19 has been devastating for the global economy. Global GDP declined the most in 2020 since the Great Depression with the loss of 8.8 percent of global working hours equivalent to 255 million full-time jobs.
A faster vaccine rollout internationally is expected to boost world GDP by 2.8 percent according to the latest KPMG Economic Outlook. On the other hand, a global delay in the rollout of vaccinations until the end of 2021 would mean a 1.2 percent hit to global GDP. At this stage the vaccination rollout between nations has been very uneven with Israel leading the way and starting to see the economic benefits of its rapid vaccine campaign.
New Zealand, with its bold “go hard, go early” strategy was widely regarded as having done an outstanding job in quashing the virus. However, like a number of other countries that have had relatively low infection numbers such as Australia and Taiwan it has been slow to get the vaccination rollout underway and ramped up.
Economic benefits of a fast vaccine rollout
Israel began its vaccination rollout in December 2020, and like New Zealand, opted for the Pfizer–BioNTech vaccine. As of the 18th of April, 60 percent of their 9.3 million population had received at least one vaccine dose.
Thanks to early access to the Pfizer vaccine, a centralised healthcare system and high levels of digitisation, they have now administered two vaccine doses to more than half their population. This was after having the highest per capita COVID-19 infection rate in the world in mid-January. They are seeing the economic benefits from their speedy rollout, with life getting back to normal as restrictions on movement are lifted. Next month they are planning to open their borders to vaccinated tourists and Reuters is forecasting a 6.3 percent rebound in economic growth if the rapid vaccination rollout continues.
No economy is an island
A recent study commissioned by the International Chamber of Commerce (ICC) Research Foundation concluded no country can fully recover until every country is vaccinated since all countries are dependent on others for trade. However, it is becoming clear that those countries that get to full vaccination status early will be rewarded with a bounce in GDP, strengthened currency and improved consumer spending. The longer it takes a country to reach herd immunity (somewhere between 60 and 90% of the population vaccinated) the longer it will take for economies to open-up to the world and the greater the impact business survival and the economic recovery, particularly in the hardest-hit industries.
Will NZ suffer by lagging behind?
A recent report from KPMG, suggests a delay achieving full vaccination status and subsequently in opening up international borders would have a disproportionately larger negative effect on countries like Australia, and by extension New Zealand, impacting the recovery of the tourism and education sectors as well as those industries that rely on skilled foreign labour. It also leaves NZ vulnerable to further economically-damaging lockdowns if an outbreak occurs.
The argument has been that New Zealand’s success in halting the virus has meant there has been less urgency for it to rush the vaccination process which is true to an extent. However there’s no denying that terms of the OECD countries New Zealand’s vaccination programme has been slow to ramp up. The OECD’s 37 member nations had delivered an average of 6.2 shots per 100 people at the 43-day mark of their respective vaccination programs. By comparison New Zealand reached just 1.7 doses per 100 people in the same period.
There are no set dates for completing the vaccine rollout but Director-General of Health Dr Ashley Bloomfield “hopes” to see 90 per cent coverage by the end of 2021. New Zealand currently has around 500,000 doses available in the country with the bulk of deliveries not arriving until after July. The current plan assumes most of the vaccinations — 7.2 million doses — will be administered from July to December. This would be a heroic task that according to Newsroom’s analysis would make New Zealand the largest country to achieve a rollout in that time on such a scale.
There are still many unanswered questions about how we will ramp up from the small number of vaccinations currently administered each week to the 60,000 daily doses projected in the second half of the year. And Kiwis are starting to get concerned according to an IPSOS poll. Only a quarter of people believe a full recovery is likely in 2021, and under half (48%) are convinced a COVID-19 vaccine will become widely available in 2021.
Comparing countries in terms of the speed of their vaccine rollout is difficult and some would argue not even relevant given things will not be back to a semblance of normal until all nations achieve full vaccination status. However, it is also clear that those countries who rapidly get their own population vaccinated will be in a better position from a health and economic standpoint. The question remains — as new highly infectious variants emerge and with a largely unvaccinated population — does New Zealand risk getting left behind as other countries see their economies recover?