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Grand plans for trillions of dollars in green infrastructure fund and environmental protection could benefit African states if they coordinate bids
In painfully slow increments, South Africa, India together with the leaders of the World Health Organization (WHO) and World Trade Organization (WTO), backed by an army of campaigners are gleaning commitments on vaccines. The G7's commitment, announced at its 11-13 June summit, to provide a billion vaccine doses by April 2022 has to be measured against the 11bn needed to vaccinate the world against Covid-19.
It comes down to a matter of funds on which the G7 summit made no specific pledge. The International Monetary Fund and the WHO calculate it would cost US$50bn to vaccinate 70% of the world by next April. IMF managing director Kristalina Georgieva says the cumulative economic benefits by 2025, quite apart from the millions of lives saved, would be $9 trillion.
To coordinate this vaccination programme, the ACT Accelerator Alliance and the public-private partnership Covax, are raising funds to distribute vaccines, diagnostics and therapeutics to over 90 developing countries. President Cyril Ramaphosa told the G7 summit that the initiative needs another $16.8bn now and a further $30bn next year.
Norway and South Africa have proposed a burden-sharing scheme, discussed but not agreed at the G7, to raise the cash. G7 members would pay two-thirds of the vaccination budget: the United States, 27%; European Union members, 22%; Japan, 6%; Britain, 5%; Canada, Australia and South Korea would all pay 2%.
The remaining third would to be met by the rest of the Group of 20 biggest economies, including China, Russia and Saudi Arabia, according to the formula. It would have struck a blow against vaccine nationalism. But if the G7 couldn't agree a commitment to fund two-thirds of the programme, it is even more improbable than the G20 would join.
A compromise might be possible, thanks to a plan to redistribute some of the IMF's new issue of $650bn Special Drawing Rights discussed by Ramaphosa with France's President Emmanuel Macron on his trip to South Africa last month. Macron says he agrees at least $100bn of the SDRs should be redistributed to Africa (under the current formula, Africa would get about $28bn of the reserve currency) and he would favour $150bn.
The $100bn was agreed in principle at the G7 summit without any details on how it would be used: to finance cheap IMF credits, to bolster central bank reserves or for public health initiatives. (AC Dispatches 18/5/2021, Hopes for new initiatives on debt and finance at Africa summit hosted by Paris & 7/6/2021, Whitehall's planned foreign aid cuts condemned as immoral).
On South Africa's and India's proposal for a 'temporary and targeted' waiver of intellectual property rules on vaccines and associated therapeutics, Ramaphosa has won some cautious backing from Macron and US President Joe Biden for the principle. But the policy is opposed by Britain and Germany, which emphasise distributing more doses of vaccines rather than setting up new production hubs in developing economies.
Africa stands to gain from another four initiatives discussed at the G7 summit:
- The US$100bn a year facility to help developing economies adjust to the shocks of climate change; agreed at the Paris climate talks in 2015, it was meant to have been operating by 2020; it will be a key part of the agenda of the COP26 talks in Glasgow in November.
- A targeted fund, backed by the US and others, to replace polluting coal-fired powered stations, of which there are several in Southern Africa.
- An agreed commitment, with few details, to protect 30% of the natural habitat in the planet's land and oceans by 2030; this is a global figure, rather than a country-by-country target; Africa still has by far the world's richest biodiversity and largest unpolluted land mass so would have a comparative advantage; rapid growth of farming, mining and logging in Africa are depleting the range of species; and the UN is organising a conference on biodiversity in Kunming, China, in October.
- The Build Back Better World (B3W) infrastructure partnership, launched by the US, was outdoored at the summit but was thin on details; US officials said it would offer a 'positive alternative' to China's Belt and Road Initiative, which includes some $3.7 trillion of projects although a fifth have been disrupted by the pandemic; according to Biden's team, the B3W plan, very much a work in progress, will use private capital (with government guarantees) for projects that boost climate adaption, public health, digital technology and social inclusion; they declined to put a figure on the plan other than to say it would cut developing countries' infrastructure deficit, reckoned to reach $40 trillion by 2035.
For Ramaphosa, the next episode will be critical: how can those commitments on vaccines be ramped up and delivered quickly as a third wave of the pandemic washes across Southern Africa and East Africa? (AC Vol 62 No 12, More time for the truth).
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