Written evidence submitted to the International Development Committee: Inquiry on the impact of coronavirus on developing countries

Submitted by Global Justice Now, 17th April 2020.

About Global Justice Now

Global Justice Now (formerly the World Development Movement) is a democratic social justice organisation working as part of a global movement to challenge the powerful and create a more just and equal world. We mobilise people in the UK for change, and act in solidarity with those fighting injustice, particularly in the global south. For 50 years, we have campaigned on international development policy, and more recently have tracked the financialisation of UK aid and private profits of major pharmaceutical companies.

Summary

In the wake of the global COVID-19 pandemic, we are particularly concerned with the role of UK aid in three key areas: vaccine research and development; the impact of debt on the ability of governments to respond; and the Department for International Development’s (DfID) long term strategy for achieving Universal Health Coverage. In this submission, we will cover only the first two areas as the most immediate areas of concern, whilst our analysis of DfID’s health investments will follow in a separate submission.

It is our view that any public funding (including UK aid) given to international vaccine research and development should come with public interest conditions that would ensure any vaccine is affordable and accessible to all, but particularly to those in the global south.

We are also worried that government debt in the global south is undermining efforts to respond to the pandemic, and that this will be exposed in the coming weeks as COVID-19 continues to spread. With this in mind, we welcome DfID’s contributions to international debt cancellation efforts to date, but believe much more can be done to ease this burden.

Recommendations for government

We are calling for:

• Public interest conditions on access, affordability and transparency to be attached to all UK public funding for R&D on Covid-19 vaccines and treatments.
• The use of Crown Use licenses for any patented technologies for tackling Covid-19, where patient access may be restricted by monopolies.[i]
• The UK to advocate for debt cancellation, working with the International Monetary Fund (IMF) to cancel debts for countries suffering the economic impacts of COVID-19.
• The UK and DfID to support global south governments facing debt crises to restructure their debt rather than bailing out lenders.

What are the direct and indirect impacts of the outbreak on developing countries?

1. As COVID-19 continues to impact the global south on a greater scale, the weak position of many public health systems is becoming increasingly exposed. For example, while the UK has 28 doctors per 10,000 people, even relatively rich developing countries have a small fraction of that with 9 doctors per 10,000 people in South Africa, 8 in India. It has been reported that there is a severe lack of ventilators in the Central African Republic (which has only three machines for a population of 5 million people), while governments in Angola, Côte d’Ivoire, Mozambique and South Sudan have reportedly told the World Health Organisation that they have no ICU capacity for patients with severe symptoms.[ii] And in India, even though some regions such as Kerala have strong public health systems, there are similar fears that the unequal distribution of private sector hospitals and resources has left some regions and low-income families at risk of being unable to access key ICU services.[iii]

Vaccine development

2. The development and widespread distribution of an effective vaccine will be crucial to ending the spread of coronavirus globally. However, recent experience has shown that developing countries struggle to access new vaccines. During the H1N1 pandemic in 2009, rich countries placed large advance orders for the H1N1 vaccine and bought up virtually all the vaccine companies could manufacture. This led to negotiations for ‘donations’ from pharmaceutical companies and from rich countries but developing countries were still left with limited supplies.[iv] Without global collaboration and intervention, there is a real danger that recent history could repeat itself.
3. There have been reports that other governments have been using their political and economic power to stockpile key resources during the pandemic.[v] President Donald Trump was reported to have offered German biotech company, CureVac “large sums of money” to obtain exclusive rights over a potential Covid-19 vaccine “but for the US only”.[vi]
4. In addition to inequitable distribution, the other barrier to accessing vaccines is price. New treatments and vaccines are patented which creates a market monopoly enabling the originator firm to charge whatever price they want. This is the case even when public funds have contributed to the research of the final health product. Even though a handful of pharmaceutical firms have committed to not profit during the pandemic from a potential vaccine discovery, this is not a guarantee of affordability for low-income countries.[vii]
5. It is therefore vital that any COVID-19 vaccine is affordable and accessible to all. This will be absolutely crucial for global public health as well as limiting the long-term social and economic impacts of the pandemic. While these impacts will remain significant, perhaps even devastating, a vaccine could prevent them from being catastrophic to many countries.

Debt crisis

6. There are also growing fears that the impact of external debt on countries in the global south could result in a “catastrophic loss of life in poorer countries” and push half a billion more people into poverty.[viii]
7. Vulnerable countries face a lethal combination of slashed revenues and potential new debt crises. African economies are already suffering with the prices of export commodities like copper and oil plunging, and revenues from tourism drying up, while borrowing costs and debts go up.
8. Jubilee Debt Campaign analysis demonstrates that 64 middle and low-income countries are spending more on servicing their external debt than they are on public health.[ix]
9. Ghana is due to spend $3.8 billion on external debt payments in 2020. It is currently spending almost four times more on servicing its external debt than it is on public healthcare for its people: 39.1% of its government revenue is spent on debt servicing, 10.8% is spent on healthcare.[x] Ghana is still in the early stages of its crisis, but already has more than 500 reported cases of Covid-19 and should be spending urgently to contain its spread.
10. Malawi has only a quarter of the nurses needed to provide health care for all. Debt cancellation for 2020 alone could pay the salaries of all 14,000 extra needed nurses for 3 years.[xi]

How effective has the UK’s response been, bilaterally and with the international community, to the spread of coronavirus to developing countries?

Vaccine development

1. Significant amounts of public funding have already been committed to develop a COVID-19 vaccine, and nearly every coronavirus vaccine candidate currently in development involves public investment.[xii] This follows a pattern in which public funding has driven innovation in vaccine development for many years.[xiii]
2. The UK is the second largest country funder of health R&D and has committed £120 million to developing vaccines through the UK Vaccine Network and a further £250 million since the outbreak specifically for coronavirus vaccine research through the global vaccine research platform, the Coalition for Epidemic Preparedness Innovations (CEPI).[xiv] This is on top of £10 million given to CEPI in 2019. We welcome this investment.
3. The National Institute for Health Research and UK Research Innovation have also jointly launched a Rapid Response Call via the Medical Research Council, committing a further £20 million towards developing novel diagnostics, vaccines and therapeutics to address Covid-19.
4. Via CDC Group, the UK has also invested “$200 million, with a further potential funding opportunity of $300 million” into the Credit Facility for Access to Medicines.[xv] It is unclear at this moment what role, if any, this significant public investment will play in ensuring equitable access to a COVID-19 vaccine in the global south.
5. However, more needs to be done to ensure that any COVID-19 vaccine is affordable and accessible to all. We are calling on the UK government to:
1. Impose public interest conditions on all UK funding that is being committed to develop a vaccine for Covid-19 to:
1. Ensure the final product is affordable, accessible and available for everyone who needs it, within the UK as well as in other countries, including but not limited to low- and middle-income countries.
2. Stipulate, as a condition of public funding, that any vaccine or medical product developed is licensed according to the principles of socially responsible licensing, which includes but is not limited to preventing exclusive licensing. Socially responsible licensing could include licensing to the Medicines Patent Pool.
3. Introduce ‘step-in’ rights for the UK government to issue non-exclusive licenses if a licensing partner fails to comply with the requirements of providing the health technology at an affordable and fair price.
2. Issue crown use licenses for any patented technologies that are potentially useful for tackling Covid-19, in response to this public health emergency, where patient access or research may be restricted by patent monopolies.
3. As a donor country and board member of CEPI, the UK government should support CEPI’s continued efforts to ensure equitable access to vaccines globally, and work to ensure that any products developed with support from CEPI are available and affordable to all those who need them.
4. Support global co-ordination based on international solidarity to improve global and public capacity for vaccines production and ensure that public health priorities drive the production and distribution of any new Covid-19 vaccine.
5. Support the proposal from the President and Minister of Health of Costa Rica for the WHO to create a global pool for rights in Covid-19 related technologies for the detection, prevention, control and treatment of the Covid-19 pandemic.

Debt cancellation

6. The UK government has already given £150 million of aid money for the cancellation of debt payments to the IMF by “poor countries for a limited period of time, if a set of criteria are met”. While this contribution is welcome, there are concerns that countries will struggle to qualify for the debt relief.[xvi]
7. However, further action is also needed. Over 150 global civil society organisations have called for “immediate cancellation of debt payments, including to private lenders…and a process to reduce debts to a sustainable level following the Covid-19 crisis”.[xvii]
8. Cancelling all 2020 external debt payments of the 76 poorest countries could help to redirect $40 billion immediately from debt servicing to public health, supporting almost 500 million of the world’s poorest people to survive this crisis.[xviii] Other developing countries also need debt cancellation, and if their payments were also cancelled for the next year, the figure would reach over $300 billion.[xix]
9. The UK government should cancel all principal, interest and charges for the remainder of 2020 for all countries in need, and most urgently for low-income countries. Debt payment cancellation and additional finance should be designed specifically to: bolster public expenditure targeted at protecting the rights and needs of populations; maintain and increase social protection and health spending in response to COVID-19; ensure relief goes directly to benefit those in need; and should be free of economic policy conditionality promoting privatisation, deregulation and trade liberalisation.
10. There is an urgent need for the UK government and DfID to use their role on the international stage to advocate for the cancellation of all external debt payments due to be made in 2020. The UK government and DfiD should also work with their international partners to deliver additional emergency funds to support the efforts of global south governments to tackle the crisis.
11. The UK has a particular role to play in debt cancellation as both a major financial centre and a key jurisdiction. For example, 90% of African government external bonds are owed under UK law.[xx] The government should therefore work with the private sector to encourage matching debt write-offs and pass legislation to prevent any lender suing a vulnerable government for stopping debt payments.

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