Monthly Cross Asset Covid-19 Vaccine

Geopolitics of the vaccine: variance risks


6 December, 2021

5 to 10 minutes
Geopolitics of the vaccine: variance risks

6 December, 2021

5 to 10 minutes

Covid-19 vaccines have been rolled out for a year now. Despite official commitments to provide access to effective jabs to all countries, production constraints and national priorities have resulted in uneven distribution, with some countries close to 100% vaccination rates while others are still below 5%. More than a dozen vaccines are now available, but with different efficacy levels and the variant Omicron will probably reduce the efficacy of existing jabs. As expected, the geopolitics of the vaccine have come into play. COVAX’s inability to reach its targets shows that, on top of real constraints, vaccines are soft power weapons that are being used for geostrategic purposes.

Vaccines are unequally distributed

A year after the first Covid-19 vaccine approval, the global vaccination campaign is still underway. More than half of the world population has received at least one of the 7.5 billion doses of vaccine administered globally. Another 1 billion doses should be given by the end of the year at the current rate of 30 million doses a day. This could be considered as a success on this sole measure.

Yet, vaccination rates are very heterogeneous among countries and even social groups, and are mainly explained by wealth disparities. In the most advanced countries, vaccination rates have already reached high levels (74% in the UK, 70% in the EU and 67% in the US) with a direct positive impact on hospitalisation and fatality rates. In low-income countries (mainly Sub Saharan Africa), fewer than 5% of people have received at least one dose. The situation is uneven within developing countries as well, with some reaching high levels of vaccination (Figure 1) while others are still lagging behind. Vaccine shortage are not the only reason for the low vaccination rates, which also have internal causes such as lack of political will and fears over vaccines. The first consequence of this situation is that global immunity is still far away.


As the wealthiest nations roll out boosters for at-risk population groups in order to fight the Delta variant, they produce or purchase more for themselves than expected and deliver less to the poorest nations. COVAX’s1 initial goal was to donate 2 billion doses by the end of 2021. At the time of writing, only 500 million doses have actually been shipped and delivered. The US committed to 800 million doses but delivered only 108 million, and the EU only delivered 40 million out of the 350 million announced. 

More than 50 countries around the world have vaccinated less than a quarter of their population. For dozens of them, the 70% vaccination rate threshold will not be reached until the end of 2022 or maybe 2023. This is leading to subscale and suboptimal allocation of vaccines. Therefore, the objective of global herd immunity looks less and less achievable. Moreover the Omicron variant includes a significant number of mutations and is spreading quickly which means that new vaccines will have to be used. Covid will probably become an endemic disease in low-income countries; in a worst case scenario virus mutations could maintain the pandemic for many more years (see Amundi Central and Alternative Scenario). As existing vaccines become less effective against new variants and/or as immunity fades after six months on average, multiple vaccines and boosters will be needed in wealthy countries, while middle-to-low-income nations will face a rising number of casualties.

Covid could become endemic and remain a source of economic uncertainty over the medium term

Geopolitical issues explain the uneven vaccination roll-out

There are several reasons behind COVAX’s underperformance.

The first is that pharma companies have failed to supply jabs in line with their commitments. Or when they did, these vaccines have not been shipped to the targeted recipients Pfizer, J&J, Moderna, Sinovac, Novavax, for instance, have delivered few or no vaccines to the program2.

The second is that India, which is producing a significant volume of AstraZeneca’s vaccine, banned exports over the summer in order to meet its own vaccination targets.

A third reason is that many countries would rather donate vaccines directly, in order to enhance bilateral relationships or as diplomatic soft power rather than via COVAX, which is pooling donations. Australia, for instance, has built a partnership with Vietnam and delivered 1.7 million dose this year. 45% of US vaccine donations are made directly and 50% of all US donations are to five Asian countries – Pakistan, the Philippines, Bangladesh, Vietnam and Indonesia, which, incidentally, are important to Washington policy in the region.

Many countries would rather donate vaccines directly rather than via COVAX


Therefore, as we were expecting in May (Geopolitics of the vaccine), the geopolitics of the vaccine have indeed come into play. Vaccines are not being distributed in accordance with population size or healthcare systems’ relative weaknesses, but other criteria, i.e. national and geopolitical interest. Indeed, governments focus first on their own populations and national constraints rather than on global policies, despite their commitments. Vaccines are soft power weapons being used for geostrategic purposes. 

India becomes an alternative vaccine provider

Since our latest publication (on 5 May 2021), advanced economies have remained self-sufficient and now answer to more than half of emerging economies’ vaccine demand. The demand for US vaccines in particular is still very strong. However, a new player has fortified its contribution: India (see Figure 4). Among the emerging countries that have ordered vaccines to cover more than half of their population (>15 years old), 21% are from China, 17% from India, and 5% from Russia. Moreover, India’s presence in Asia-ex Japan captures almost 30% of vaccine demand, exceeding China (12%). This breakthrough is due mainly to two factors: India provides itself 47% of its orders (see Figure 5) and accounts for 37% of EM vaccine demand.




Among emerging markets, Europe and the US remain the main source of vaccines. However, China, and now India are alternative, or even the main, providers in certain countries. Burundi received from China its first shipment of vaccine in October. Yet China’s vaccines’ lower efficacy (see table 1) and supply chain constraints limit its ability to distribute Chinese jabs. Although few in number, we notice that a few countries have reserved vaccines from South Korea and Taiwan. 

Investment consequences

We are now assuming in our central scenario that Covid will become an endemic disease with multiple waves adding to economic uncertainty.

The Omicron variant fast propagation and threats confirms this approach is relevant. In our downside scenario, virus mutations could precipitate an economic downturn. As existing vaccines become less effective and/or as immunity disappears after an average of six months, multiple vaccines and boosters will probably be needed in wealthy countries. This will lead to public support and private investment in this space, which will underpin healthcare sector valuations. Lastly middle- to low-income nations and some emerging markets will face a rising number of casualties and diverging growth paths versus highly vaccinated nations.

Despite mass vaccination and newly approved drugs3, and unless it miraculously disappears, Covid-19 is here to stay but will eventually turn endemic. The fact that AstraZeneca is moving away from the nonprofit model used so far confirms it. The world could then be split into three: high-income countries with efficient vaccines and treatments; middle-income countries with mildly efficient vaccines and fatality rates based on the weaknesses of their healthcare systems; and low-income countries with limited access to vaccines, suffering from uncontrolled variants and an endemic disease similar to malaria4. Like climate change, Covid is bringing us back again to the debate on our collective responsibilities.


1 Covid-19 Vaccines Global Access, abbreviated as COVAX, is a worldwide initiative aimed at equitable access to Covid-19 vaccines directed by Gavi, the Vaccine Alliance, the Coalition for Epidemic Preparedness Innovations, and the World Health Organization
2 See Moderna Chief Executive interview by the Financial Times 30th Nov 2021
3 Pfizer antivirol Paxlovid and Merck Lagevrio
4 According to the WHO report for 2019, 229 million cases of malaria worldwide resulted in an estimated 409,000 deaths. Approximately 94% of the cases and deaths occurred in Sub-Saharan Africa

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