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Will a focus on comprehensive vaccination produce greater economic harm than good in ASEAN countries

Authors: Darren Goh Zong Xian and Bharat (Dan) Gangwani

Region Head: Bharat (Dan) Gangwani

Editor: Sasthaa GB (Uday)


In this paper, we begin with an introduction of COVID vaccination and potential alternatives. We then segue into the merits and demerits of comprehensive vaccination. To conclude, we take a stance as to its efficacy.


Since the onset of COVID lockdowns back in March 2020, global economic activity has plunged to unprecedented levels. Household spending, consumer footfall at retail spaces, employment figures -- all indicators of a healthy business environment -- have had to take a southwardly heading in our fight against the medical emergency (Lewis et al., 2021). Renewed lockdowns in many countries like Indonesia and the Philippines have dampened the early excitement over resurgence in some of these figures over the winter. The status quo is mostly consistent with common sense, people are spending less and less time outside because of income shortfalls and alternative consumption choices post-COVID.

With vaccines, all of this might soon change, or at least one hopes. Many countries believe that global inoculation will be a stepping stone to economic revival, and bring an end to the pandemic. Indonesia recently made vaccination mandatory for all those eligible, while allowing private rollout (Soeriaatmadja, 2021). Singapore aims to cover its entire population by the third quarter of 2021, but has let vaccination remain a voluntary decision (Lai, 2021).

However, many vaccine manufacturers are facing supply constraints at the moment. Coupled with the overwhelming demand, is it really necessary for developing countries to invest so much money on comprehensive vaccination? In other words, can and should poorer countries pay for free vaccination of the majority of their population to achieve herd immunity -- two-thirds for most countries (Aschwanden, 2020) -- while economic activity remains clamped? Or are other policy approaches like privatisation or a vulnerable-first approach more effective alternatives for a return to greater economic activity? The tradeoff lies in the loss of life one can potentially avoid but at the cost of many people’s livelihood.

Merits of a Comprehensive Vaccination Strategy

Let’s start by making a case for comprehensive vaccination. The benefits, while common-sensical, are not to be underestimated. By the end of January, Israel had administered the first shot of the Pfizer-BioNTech vaccine to over a third of its population of nine million.. The number of hospitalisation cases dropped by a third in the following week after the rollout (‘Israel’s Vaccine Programme Gives Hope to the World’, 2021). Among other policy approaches like privatisation and ‘vulnerable-first’ discussed below, comprehensive vaccination has the best chance at achieving herd immunity while sacrificing the least number of lives directly to COVID.

Figure 1

Effective rollout of the vaccine can also alleviate international travel restrictions, allowing industries like tourism and hospitality to recover sustainably rather than at added cost to travellers. Without large-scale vaccination, it will be difficult for these industries to recover in a distributionally just manner at prices that are accessible for the general public. Otherwise, travelling will be regressing towards being a hobby only for the elite. Additionally, tourism contributes significantly to the economy of many countries like Singapore and Thailand. In Singapore, it forms 4% of the GDP (Hirschmann, 2021) while in Thailand that figure rises to 20% (Theparat, 2019). It funnels money and people’s salaries in sectors like hospitality, retail and dining. Hence, a lot of people whose livelihoods rely on tourism will benefit from comprehensive vaccination. One can also reasonably predict that vaccination will be made mandatory by receiving countries to ensure that travelers do not bring in new strains of the virus, causing new waves. Without free vaccination, this will become another cost burden for travelers to bear. These factors suggest that a comprehensive vaccination programme may be the only way to foster greater economic activity in industries with high standards for safety.

One alternative to comprehensive vaccination is the privatisation of vaccine distribution such as the one implemented by Indonesia alongside its state-sponsored mandatory programme (Soeriaatmadja, 2021). A market allocation of the vaccine would be less wasteful and more efficient since private companies would be incentivised to deliver it quicker than their competitors. However, it’s also highly likely that a market allocation completely disregards the needs of the people and communities who cannot pay for the vaccines. As a result, one could see distribution clinics set up in richer neighbourhoods and cities with an abundant supply of vaccines while poorer neighbourhoods face shortages or no provision at all. Wealthier individuals could also source vaccines from abroad or fly to inoculate themselves first where vaccines are privatised (Shiryaevskaya, 2021). In turn, people who can afford to pay for the vaccine will not only enjoy a reduced risk of adverse health outcomes but also lowered COVID-induced stress amidst friends and family. They would get to actively participate in “normal life” compared to people unable to access vaccines and instead resorting to other preventative measures. At the same time, at-risk groups like the elderly or those suffering from immunodeficiency who are simultaneously lower-income earners would be unable to access the vaccines easily. As a society, we have to ask whether such a disparity is desirable.

Drawbacks of a Comprehensive Vaccination Strategy

Despite its merits, a comprehensive vaccination strategy is not a surefire way to economic recovery. Large-scale vaccine investment has its downsides, especially for countries where expenditure on vaccines even at cost price would form a significant proportion of their budget. Poorer countries like Myanmar, Laos and Cambodia are already facing financial trouble with reduced economic activity and dampened tax revenue. Attempting a comprehensive vaccination strategy will likely aggravate their financial situation.

In the process of purchasing vaccines, indigent countries will have to take on large domestic and international debt. The currency outflows for purchasing the vaccines, combined with debt inflows will worsen their current and capital account deficits. Countries which rely on primary sector exports like Myanmar and Indonesia are likely to be affected the most by this deterioration in the balance of payments since prices of primary goods are very susceptible to external shocks. Producers in the primary sector such as subsistence farmers and miners will suffer a loss in incomes, worsening income inequality within the developing countries. Additionally, money spent on procuring vaccines in the long term can be spent on more productive short-term mitigation measures. For instance, stimulus packages containing transfer payments supporting low-income workers, the unemployed or retired and at-risk crowds may have more immediate benefits compared to vaccination. Loans and grants for small-medium enterprises can also be considered measures that support communities more directly and effectively.

Financial considerations suggest that the majority of developing ASEAN countries will have to rely on COVAX, a vaccine-sharing scheme co-led by the WHO (‘How Fast Can Vaccination against Covid-19 Make a Difference?’, 2021). COVAX only covers 20% of the country’s population, however, and hence is unlikely to be the end solution (Covax: How Will Covid Vaccines Be Shared with Poorer Countries? - BBC News, 2021). Another aggravating factor is vaccine nationalism with wealthier countries having purchased a large percentage of global vaccines, often several times their population requirement (Julia Belluz, 2021). They are unlikely to share until they feel that they have enough for themselves. Moreover, even European countries are suffering from supply issues for the AstraZeneca vaccine (Horowitz, 2021). The situation is likely to be worse for ASEAN countries due to their reduced purchasing power. Due to these reasons, the Economist Intelligence Unit (2021) predicts that most low-to-middle income countries are unlikely to have sufficient vaccine rollout until the end of 2022 or 2023, if ever.

Even if vaccines are rolled out quickly enough, AstraZeneca -- the most feasible one for developing countries due to its higher storage temperature -- has an efficacy of 70%. This suggests that if the threshold for achieving herd immunity in a population is higher than 70%, even a comprehensive vaccination strategy may be unsuccessful at achieving it (AstraZeneca, 2021). Hence lifting restrictions on movement, coupled with a return to higher levels of economic activity, cannot be contingent on comprehensive vaccination.

Instead of relying on vaccination to curb the virus, there are other approaches developing countries can take up while avoiding gross (pun intended) expenditure. Vietnam’s strict but short enforcement of quarantine coupled with 4-layer deep contact tracing, early temperature screening and mass messaging policies about the pandemic demonstrate that even a poor country with an underfunded health sector can stave off the crisis without the need for vaccines from rich, western countries (Dabla-Norris et al., 2020). In comparison, many Western European countries and the United States are suffering from rising COVID-19 cases despite access to the vaccines.

Governments would be better off prioritising vaccines for vulnerable groups instead of funding comprehensive vaccination. Without the latter, it’d have more resources and administrative will to deliver vaccination for at-risk groups. Even Israel concentrated on immunising the elderlies, which led to a significant fall in COVID-19 patients. On January 2nd, 40% of Israelites 60 and above had been vaccinated. The number of those critically ill had risen by 30% the week prior to the vaccinations. A week after, the rise in critically ill cases was 7%.

Figure 2


On the balance, a comprehensive vaccination programme is likely to incur greater costs than benefits. Not only are poorer countries unlikely to receive vaccines quickly enough for comprehensive coverage, the funds dedicated to vaccination can instead be used to provide transfer payments for low-income families or grants for small-medium enterprises that support many employees, creating greater positive impact. Simultaneously, a vulnerable-first approach would ensure that resources are directed towards people who are most in need. That’s why we are compelled to conclude that comprehensive vaccination will produce greater economic harm than good in most ASEAN countries.


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2. AstraZeneca. (2021, February 3). COVID-19 Vaccine AstraZeneca confirms 100% protection against severe disease, hospitalisation and death in the primary analysis of Phase III trials.

3. Covax: How will Covid vaccines be shared with poorer countries? - BBC News. (2021).

4. Dabla-Norris, E., Gulde-Wolf, A.-M., Painchaud, F., Asia, I. M. F., & Department, P. (2020, June 29). Vietnam’s Success in Containing COVID-19 Offers Roadmap for Other Developing Countries. IMF.

5. Hirschmann. (2021, February 10). Singapore: Tourism direct GDP contribution 1995-2029. Statista.

6. Horowitz, J. (2021, January 26). Europe threatens to restrict vaccine exports after AstraZeneca and Pfizer hit production problems. CNN.

7. How fast can vaccination against covid-19 make a difference? (2021, January 23). The Economist.

8. Israel’s vaccine programme gives hope to the world. (2021, February 3). The Economist.

9. Julia Belluz. (2021, January 29). How Rich Countries Are ‘Hoarding’ The World’s Vaccines, In Charts. NPR.Org.

10. Lai, L. (2021, February 1). Singapore will have capacity to get population vaccinated against Covid-19 by Q3 2021, but may take longer to do so . The Straits Times.

11. Lewis, E., Bernard, S., Smith, A., Burn-Murdoch, J., Tilford, C., Wisniewska, A., Fray, K., & Kao, J. S. (2021, January 25). Pandemic crisis: Global economic impact tracker.

12. Shiryaevskaya, A. (2021, January 9). Rich Book Covid-19 Jabs Abroad to Skip U.K. Wait, Telegraph Says. Bloomberg.

13. Soeriaatmadja, W. (2021, February 16). Indonesia makes Covid-19 vaccines compulsory, allows private vaccination. The Straits Times.

14. Theparat, C. (2019, September 19). Prayut: Zones vital for growth. Bangkok Post.

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