FROM SOFT VACCINE POWER TO HARD ECONOMIC POWER

by Editorial

The Chinese virus descended on us like a forest fire. It scythed through people, nations and economies. It upended the global order. A combative China controlled the virus spread and reopened its economy. The virus and health became domains of war through which China fought. Everyone predicted the dawn of a Chinese era of global dominance and the decline of the US and the West. It was well known even then that the long-term curative for the virus is eradication through vaccines. The vaccines have come. The virus has started mutating. We are entering a post ‘control phase’ of the virus into a ‘vaccination phase’/‘post vaccination phase’. Just as the soft power of ‘spread and control’ overturned the hard power of ‘economies’, the soft power of vaccination will again upend economies. Hence ‘efficacy of vaccinations, capacities, capability to vaccinate and ability to deal with mutations’ will be the new currency to dictate economic outcomes. As much as the virus has destroyed or enhanced economies, the vaccines have the potential to do so irrevocably. This story is all about the virus, the vaccines, their behaviour and how they are likely to affect economies and power structures.

WHAT WE KNOW ABOUT THE VIRUS

The Chinese virus has mutated in the UK, Brazil and South Africa (SA). These variants are more contagious and lethal. Existing vaccines are proving to be less effective against them. The Virus continues to change the playing field. You can suppress and delay the Virus by isolation, lockdowns, social distancing, hand sanitation, tracing apps, testing, masks and more control measures. But the virus will infect you one day eventually. There is no escaping from that. Vaccines which are 100% effective prevent infection and onward transmission. That is utopian. In real life, vaccines are proving to be less efficient. However they will save individuals from the severity of disease. You could still get infected and pass it on to others.

The virus will be eventually corralled by herd immunity – achieved either by everyone getting vaccinated or infected. If herd immunity is not achieved through vaccination, suppression only delays the inevitable infection, disease and suffering. That is evident from China which declared victory through strict control. However it is now going through even bigger lock downs than at Wuhan. It has had the most cases since Wuhan in the last one month. Consequently, its manufacturing and services sector has started weakening. Every lockdown and mass testing regime has an associated extractive economic contraction. It is no brainer. People in the tropics are less affected by the Virus than those in the temperate areas. People who are from nations which have vaccination programs are less affected by the virus. Nations with younger populations are more resistant and less affected by the virus. These are empirical facts on ground (see fatality correlation chart). Hence, temperate countries without vaccination programs have to be either vaccinated or under strict prevention control. Tropical countries can tolerate the virus.

VACCINES ANALYSIS

As we enter this phase we need to understand the vaccines and their behaviour. The data about leading vaccines, their efficacy, how they work, who are using them, the production capability, their status and other details are given in self-explanatory, charts and tables below. In about six months there will be more options. It must also be noted that there are enough vaccines and capacities to inoculate the entire world population with two doses within 2021. However geopolitics and vaccine nationalism will not permit everyone getting vaccinations in 2021.

Very clearly, the western vaccines have demonstrably greater efficiency. The combined capacity of the West and India far outstrips the Chinese capacities and efficacies. The influence operations of the Chinese propaganda system is thus slowly unravelling. Data about Chinese vaccines are hazy—technologically and capacitively as also not trusted. Its ‘vaccine diplomacy’ is jading. Countries committed earlier to China like Brazil, Cambodia, Bangladesh etc are switching to alternate options. It can be due to either low efficacy or non-availability as required/promised or high prices or all. It is also on cards that China will ditch everyone due to internal compulsions. In turn, it might get ditched by everyone. The first sign of a sinking ship?

HOW WILL VACCINES BEHAVE?

There are some fundamentals about vaccination behaviour which need focus. There is no clarity on the time span of immunity post vaccination. It could be anything between 12–18 months. In such a case annual revaccination is on the cards. Whether past infection will prevent reinfection is also not clear with the highly contagious variants. Hence everyone needs an annual jab to prevent being stricken. Now the crunch. The original virus had a transmissibility (Ro) of 2.5 – 3.5. With a vaccine of 100% efficacy and life-long protection, the estimated level of herd immunity was 60–72%. If the vaccine efficacy is 80%, then the herd immunity required is 75–90%. If the new variants become dominant, it is estimated that herd immunity will be achieved at about 80-85% when using Pfizer and Moderna kind of vaccines. In case of lower efficacies, the entire population would have to be immunised. This is the condition for the Oxford and Chinese vaccines. Additionally vaccine hesitancy will challenge achieving herd immunity in many countries. The negative consequences of all vaccines are not known. Further mutations and vaccine resistance is also unknown but on the cards. Availability is uneven. These are complicating factors. The virus had a severe effect on the major economies of the world with most of them contracting significantly. What will the effect of the vaccinations be?

SOFT POWER OF VACCINATION TO HARD ECONOMIC REVIVAL

A fast roll out in adequate numbers, even if it is of less efficiency, will save people, enable herd immunity and enable people get on with lives. The capacity and ability to do so will dictate future economic power. Hence an analysis was carried out on the vaccination drives of major economies of the world. The forecast is up to 1 June 2021 to get a sense of when herd immunity will be achieved. Beyond that issues will change. The indications seem quite interesting. The data is tabulated below. The EU has just started its vaccination program, Japan is set to start its drive in Feb and data about Russia is patchy. Vaccination drives have started in the US, UK, China and India in earnest. A reasonable analysis is feasible only of these countries. Asymptomatic cases are an important aspect in this analysis since for every case discovered, there are 4-5 times the people who are asymptomatic. This has been factored in. In view of the effect of variants it is approximated that 80 % vaccination is required for herd immunity in the UK and the US. For China and India 100% vaccination is required since their vaccines are less effective. See the table below for details.

United States: The US has sufficient quantities of five highly effective vaccines. All five vaccines with public results have eliminated Covid-19 deaths. It has already vaccinated 27.8 million people in January. It is now vaccinating 1.5 million people per day and will sustain it. By 1 June it is likely to have 160-200 million people who are infected or are asymptomatic. It would have vaccinated about 103 million people. Even allowing that 50% of immunised people might be asymptomatic, the US would have anywhere between 200-300 people in the immunity zone. Herd immunity would be setting in by then. By August it is estimated that herd immunity would have set in and would be sustained thereafter. By the end of 2021 the US economy should be chugging back. When that happens they will ‘build back better’. Also, as the body heals, so will the mind under the new administration (which seems focused). People who were foolish to write off this giant will have to seriously rethink. Its technological prowess has just been demonstrated.

UK: UK is racing against the clock to beat the spread of its local variant. They have put in a regimen to administer the vaccine post haste. They have the technology to put vaccines on the ramp. Their problem seems to be availability of adequate numbers to meet their demand in time. They have put together a ‘war time’ system which includes taking calculated risks. If they continue with the British ‘sensibility’ which is their national hall mark, around 44-50 million would have been immunised by June. Soon after that they should be hitting herd immunity marks. By the end of 2021, its economy should be in restitution.

India: By Jun only 10% of Indians would have been immunised. However India is a unique case. The case load has been inarguably large but effect has been low. It also appears the peak is well past India. Infections have dropped from 100,000 per day in Sep to about 10,000-15,000 per day. Seroprevalence studies suggest that India’s major cities may be approaching herd immunity—even before a vaccine is widely available. The tropical location, young population and a strong vaccination program for other diseases seems to be working for India. The economy is visibly rebounding. The country has tremendous capacity to churn out vaccines which will increase with time. As I write this around 60 countries have already approached India formally for vaccines and 10 million doses have been dispatched as gifts to neighbours. It is a unique opportunity to provide an alternative to Chinese supply chains, unbind itself from Chinese dependency grip and forge ahead economically. Its vaccine diplomacy should not only reap soft power but generate hard remuneration. When the UN Secretary General says that “India’s vaccine production capacity is one of the best assets the world has today”, he is saying a lot.

China: China is a temperate country with ageing population, semi vaccinated ( general vaccination was interrupted during the cultural revolution) with proven vulnerability to its virus. Its control of viral spread earlier implies that it has to now vaccinate more. It needs 2.8 billion doses to achieve 100% herd immunity. By June it might be able to vaccinate only 10% of its population. Even if capacities are increased, by the end of the year they might vaccinate, at best, 30% people. Officially, China will produce enough doses by the end 2021 to cover 70% of its population. However, a senior executive at Sinopharm, opined it would probably take ‘a year or two’ to vaccinate 500 million people domestically (36% of the population). Take the typical military ‘Section average’. Herd immunity in China is a long way off. China will continue with control measures, sporadic lockdowns, and mass testing through 2021 and into 2022. By then the annual revaccination will be due. They will also have to put in some control measures to keep the more contagious variants out. Till the virus swirls around China it will drag their economy down. The BRI is turning into a heap of bad debts. Their military expenditure has increased. Relocation of supply chains will happen. Technology denial will be a norm here after. All this is happening when China is at its peak productive phase. Soon China will start feeling the effect of ageing. Add all these facts. If after all this someone says that an era of Chinese global domination has begun—all the best.

Other countries: As per available literature, Germany, France, Italy, Japan and Russia have secured enough vaccine supplies for their populations. Given the fact that they are smaller populations, they will manage to put in place measures to vaccinate their people to herd immunity levels as their programs roll out. Their economies will be getting back into shape by the end of the year.

SUMMARY

Just as the virus destroyed the global order, the vaccines will reset the global order once again. I will not be surprised if China approaches India for vaccines to tide over a crisis. Time to play hard ball on many issues is approaching. Our vaccine capacities will give us enormous leverages. We need to use it intelligently to convert our soft vaccine power into hard economic and diplomatic power.

Lt Gen P.R. Shankar was India’s DG Artillery. He is highly decorated and qualified with vast operational experience. He contributed significantly to the modernisation and indigenization of Artillery. He is now a Professor in the Aerospace Dept of IIT Madras and is involved in applied research for defence technology. His other articles can be read onwww.gunnersshot.com.

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