Competitive markets

Remarks to the Ministerial Meeting of the Community of Latin American and Caribbean States

  • 4 February 2021

Remarks by ICC Secretary General John W. H. Denton AO

Latin America and the Caribbean is a very important part of the ICC network. We have a very powerful network of national committees, chambers and businesses in the region, as well as a Regional Action Group focused on Latin American and Caribbean affairs. And the number one issue for the hundreds of businesses involved in this grouping is combatting COVID-19 and access to vaccines.

ICC is very glad for this joint meeting of health, foreign affairs and finance ministers of the Community of Latin American and Caribbean States (CELAC). This is precisely what is needed because a siloed approach to combatting the pandemic is a recipe for disaster.

We have already heard extremely compelling public health reasons for why the Access to COVID-19 Tools Accelerator (ACT-A) is so important. Let me not repeat those and instead put three additional points out there.

First, the economic case for funding ACT-A is unequivocal. Ministers, you might have seen a study ICC commissioned and released last week that showed precisely how much is at stake. There were three key takeaways.

A major takeaway was that no economy will fully recover until every economy recovers. The reality is that even if advanced economies vaccinate their entire populations, if developing economies cannot do the same, the cost to the world could be up to 9.2 TR.

To put that in context: That’s greater than the economies of Japan and Germany combined. That is an extraordinary hit to the global economy. Strikingly, the study showed that almost half of that economic hit will actually be borne by advanced economies – Up to $4.5 Trillion. That is because advanced economies are so intertwined with the global economy. And so it will actually be major trading powers — the US, China, the EU — who would be the ones to pay the most economically if the disease does not get under control in developing countries.

I made that point last week to finance ministers and it might bear repeating through your channels as well: capitalising ACT-A is an economic issue.

Another core finding was that making sure the world defeats Covid would be the best domestic economic stimulus of all time. The costs of funding a truly global and equitable distribution of Covid vaccines, treatments and tests sometimes seem high.

The global financing gap for the ACT Accelerator currently stands at around $26 billion. But this is a pittance compared to the potential $4.5 trillion cost they would occur – a mere rounding error.

When you do the math, that means that fully funding global efforts would give an extraordinary return on investment – up to 166X.

So purchasing vaccines for the developing world is not an act of generosity – it’s an essential investment for governments if they want to revive their domestic economies.

While this economic logic might apply most to wealthy countries, it applies to every single country in the world. We are presently facing a classic collective action problem. It clearly makes sense for all countries to fund ACTA, but each individual country has reservations because others are not opening their check books. That’s why groupings like this are so important.

We really need collectives of governments – like this one today – to see the truth that we will not control the pandemic, restore confidence and reboot the economy until we all chip in.

If this group could collectively stand up, commit to finance a reasonable share and convince others to do the same, we would move a lot more quickly towards ending the pandemic.

That is partly why ICC is leading a campaign seeking greater contributions from the corporate world – to help create momentum for this important initiative.

Second, after last week’s brush with “vaccine nationalism”, we need a great rethink of how governments approach vaccine distribution.

While we understand some of the temptations to impose restrictions on vaccine supply chains, this is the worst policy response possible.

Such moves are wrongheaded on multiple fronts. They send dangerous signals to trading partners and run the risk of retaliatory measures. They risk wreaking havoc on already precarious supply chains just as the pandemic rages across the globe. And they risk creating artificial bottlenecks, spoiling vaccines and undermining production plans.

But instead of falling into the trap of vengeance or retaliation, we should view last week’s row as a wake-up call. We cannot just wring our hands about vaccine nationalism. We now need to make vaccine multilateralism a reality.

Practically, that means:

Latin American and Caribbean states would be major beneficiaries of such an approach and ICC would be happy to work with you to make this a reality.

Third, we can and must scale-up public/private sector cooperation.

Earlier this week, Dr Tedros and I convened over 100 senior business leaders to educate them about the importance of ACTA, which really is in many ways the most remarkable instance of public-private cooperation the world has seen.

During that meeting it became clear that there are so many ways the private sector can contribute more to the pandemic response.

Not just in terms of financing, where the private sector has already contributed around $800 million of the $1.5 billion it might be reasonably expected to contribute.

But perhaps more importantly through partnership, especially on the complex logistical challenges of vaccine delivery, data collection, building effective surveillance systems and creating the innovative tools we need to fight Covid.

Crucially – unleashing that innovation requires a willingness on the part of governments to engage the private sector.

So I would implore you to think about how you can better use the private sector to combat Covid, including through business associations like ICC national committees.

To conclude: For ICC, fully funding ACTA is the best investment governments could possibly make right now to ensure the world can return to normal as quickly as possible. But we need even more than that. We also need governments to stand up against vaccine nationalism and to fully engage the private sector in their domestic responses. ICC stands ready, willing and able to help you do that in whatever way we can. Fighting COVID-19 is the number one issue for business in Latin America and the Caribbean and they want to work with you.