Latin America competes to obtain coronavirus vaccine agreements
The region is a battleground in the geopolitics of vaccines
One of the questions I’ve worked on in recent months with the Superforcaster group relates to the approval, manufacturing and distribution of a vaccine to at least 25 million people in the US. At the moment, as a group, we think it’s 85% likely that there will be a vaccine distributed in the US before the end of September of 2021. That’s great news in the sense that it would be the quickest vaccine ever created and distributed.
Source: Good Judgment Public Dashboard
Globally, my prediction (not endorsed by Good Judgment Inc) is that there will be multiple effective vaccines approved by Q1 of next year and vaccines will be distributed to hundreds of millions of people by the end of 2021. This is thanks to the number of vaccines under development and being tested right now as well as efforts by many countries and companies to ramp up manufacturing. While not every vaccine will be effective, enough candidates for vaccines are in the research and testing pipeline that it is almost certain that several of them will succeed.
In spite of being hardest hit by Covid-19, Latin America is not going to be the first region to receive the vaccine in large quantities. Even in the best case scenario, vaccination rates for Covid-19 will probably be under 50% of the region’s population one year from today, but that rate will vary from country to country. Some federal and local governments are trying to speed up that timeline through international agreements that will manufacture vaccines locally.
Geopolitical competition is underway over vaccine manufacturing and distribution
In late July I wrote about China’s promise of a billion dollar loan to distribute a vaccine in Latin America. Separate from that promise, Chinese companies have been working to test the vaccine in Latin America, where the virus is widespread. For example, China’s Sinovac Biotech signed a deal with São Paulo Governor João Doria to test a vaccine, something that may give the state earlier access to production and distribution channels.
AstraZeneca has plans to produce its vaccine in Mexico and Argentina. Carlos Slim will provide some of the funding and the vaccine should be produced for less than $5 per dose. Brazil’s federal government has also signed an agreement and allocated money to test the vaccine and potentially produce it.
Separately, Mexico is making a play to obtain access to Russia’s alleged vaccine, with President Lopez Obrador promising to be among the first to receive it. This seems like a poor idea but fits with AMLO’s overall strategy of trusting his gut over scientific expertise. Several Brazilian states are reportedly in negotiations with Russia as well.
The coming months will likely see additional agreements signed between federal and local governments in the region and various pharmaceutical companies to obtain access to the vaccine. The fact Latin American countries are being forced to sign agreements before trials are complete could create unexpected winners and losers down the road.
The leader who gets his or her country/state an effective vaccine early will reap political and economic benefits
Countries that can reopen their economies soonest and with healthy populations are going to see large economic benefits. International travelers will begin arriving again, boosting businesses and the tourism industry. That means leaders who pull off swift and effective vaccination efforts are likely to see renewed boosts in popularity and be given political capital to get their agendas back on track.
The best bet for leaders to obtain that boost is to consider multiple vaccine options, not knowing which vaccines will be most effective or most available for manufacturing in the coming year. That could prove to be an expensive hedge for countries that already face recession and debt challenges.
While luck will play some role, scientific expertise and bureaucratic management skills will still matter. If a leader has done a poor job up until now managing the response to the virus, they are likely to also have difficulties in distributing the vaccine to the population and convincing the population to trust them on that vaccine.
Some leader is going to screw up the vaccine challenge
Given how the pandemic has gone so far, it’s very unlikely that every country the region is going to manage the manufacturing and distribution of the vaccine smoothly. Whether due to bad luck or mismanagement, there are going to be leaders who fail. They might fail to obtain a vaccine for the country until months after their neighbors. Or, for economic or geopolitical reasons, they might choose to focus on a single vaccine provider and find out too late that it is not effective enough to stem the health crisis.
Citizen anger at leaders who fail in this challenge is likely to be high. Any country in late 2021 or early 2022 still dealing with a surge in Covid-19 cases while their neighbors are healthy and economically rebounding will face protests and political unrest.
There will be corruption
Politicians and middlemen businesses are going to exploit this moment in order to make money. It’s an unfortunate reality. To counter it, the region should have transparent contracting processes and independent investigations of corruption allegations. Knowing how difficult that is even in the best of times, the region should prioritize the investigation and prosecution of any corruption that harms public health. Leaders should make clear that anyone engaging in corruption that delivers a non-working or harmful vaccine deserves a special place in hell and will face jail time.
Reading List - Articles on Coronavirus in LatAm and Vaccine Nationalism
LSE - COVID-19 in Latin America: were we doomed from the start?
Bloomberg - Latin America's Populists Are Overwhelmed by Covid-19
New York Times - Venezuela Deploys Security Forces in Coronavirus Crackdown
Wall Street Journal - A Deadly Coronavirus Was Inevitable. Why Was No One Ready?
Foreign Affairs - The Tragedy of Vaccine Nationalism
Politico - The ultimate geopolitical game — distributing a coronavirus vaccine
FT - Why vaccine ‘nationalism’ could slow coronavirus fight
WSJ - China Seeks to Use Access to Covid-19 Vaccines for Diplomacy
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