No prizes for the losers in the race for the vaccine

Linda J. Dodson

However, he says the biggest long-term benefit from a rapid approval would be from limiting economic scarring.

This is the long-lasting damage caused by businesses buckling under the strain of the downturn and workers becoming unemployed as tectonic shifts reshape industries.

“Fewer businesses go under and structural unemployment stays a bit lower so the supply capacity and the ability of the economy to grow is not hurt as much,” Dales explains on the early vaccine scenario.

Firms going under waiting for a vaccine to arrive will make it “harder for the economy to grow because that business is no longer there and you have to wait for another business to come and fill the hole, which takes time”, he says.

Laid-off workers would also weigh on the recovery by curbing spending. Bank of England chief economist Andy Haldane has warned there is a risk of an Eighties-style unemployment crisis amid concerns of a jobs and skills mismatch that will shut workers out of the jobs market as certain sectors shrink and others expand.

The race has also raised the prospect of economic recoveries at different speeds amid worrying signs of so-called “vaccine nationalism”. Richer countries, particularly the UK and US, have raced ahead in securing potential doses from multiple candidates as they await trial results. Goldman estimates the UK has purchased almost three potential doses for every person, just behind the US and well ahead of the EU, Japan, China and emerging markets.

“What the UK, US and Europe have done which developing countries can’t do is hedge their bets, buying not just one type of vaccine but half a dozen,” warns Ian Goldin, a professor of globalisation and development at the University of Oxford. “We will continue to see very differential economic growth rates around the world and I really worry for poor countries in this. I don’t see how they are going to rebound for a very long time.”

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