covid

Poverty and extreme inequality worsen in southern Africa as COVID-19 battered countries embark on a dangerous austerity path

May 11, 2022

The COVID-19 pandemic has worsened the extreme inequality in Southern African Development Community (SADC) countries and pushed millions into poverty, reveals a new analysis from Oxfam, Norwegian Church Aid (NCA) and Development Finance International (DFI).

The Commitment to Reducing Inequality Index (CRI) report shows that the fifteen SADC member states lost about $80bn in 2020 due to lower-than-expected growth. which is equivalent to around $220 for every SADC citizen.

This analysis estimates that this economic crisis could take more than a decade to reverse, erasing all hope of countries meeting their national development plan targets to reduce poverty and inequality by 2030.

The organizations say that if countries act decisively now against inequality, with policies aimed to help support citizens with public services and support, the impact of the crisis could be reversed in just three years. However, the report finds that SADC countries have responded with belt-tightening measures that are likely to do more harm to people than good.

“The poorest in our societies are bearing the brunt of Covid-19 and are now facing the extra cost of austerity policies. Governments have a choice and must act now to reverse damage of the pandemic, increase social spending and tackle the inequality crisis”, says Felix Ngosa, senior programme officer in Norwegian Church Aid.

As many as 35.5 million people in SADC countries lost their jobs in 2020 due to the pandemic, down by 26% on 2019 employment numbers. The Democratic Republic of Congo, Madagascar and Tanzania were hardest hit, with over five million jobs lost in each country.

While the majority of SADC citizens have suffered from the pandemic and its effects, the story is different for the region’s wealthiest people. The six wealthiest men in SADC – four in South Africa and one each in Tanzania and Zimbabwe – saw their wealth expand from $18.1 billion to $27.7 during the two years of the pandemic, a 42% increase in real terms. This increase is more than enough to fund a full COVID vaccination program (plus a booster) for everyone in SADC. The richest 10% earn around or above 60% of national income in eight SADC countries, and 50% in the other seven, the report finds.

This wealth concertation by a small group of people has left a majority struggling to meet their most basic needs, such as quality education, healthcare and decent jobs.

“The findings of this analysis are shocking, but they confirm the reality of many countries in this natural resource-rich but poor and unequal region” says Dailes Judge, Oxfam in Southern Africa Programme Director. “The inequalities in most countries in the region are major drivers of reduced economic growth and weakened essential services such as quality healthcare and education”.

“Sadly, a majority of the people feeling the sting are the poor – those living in vulnerable conditions with little or no assets. Women- headed households represent a distressingly large proportion of those struggling and suffering.”

In 2021, with COVID-19 infections rising, the critical health, social protection and economic programs put in place by most governments in 2020 were rolled back and replaced with austerity policies, in the context of growing debt burdens and lack of external support for country budgets.

Governments have felt pressured by their increasing debt service payments to cut social spending. Even before the pandemic, debt servicing was reaching astronomical levels with SADC governments spending almost three times as much on domestic and external debt service as there were on health. In 2020–21, debt servicing took 42.2% of government revenues on average.

The report says that many Southern African Development Community (SADC) member governments are still showing considerable commitment to fighting inequality – but still nowhere near enough to offset the huge inequality produced by the market and exacerbated by the COVID-19 pandemic.

“The combination of budget cuts, rising debt and a slow recovery due to global vaccine inequity risks raising the SADC inequality crisis to new heights,” says Mathew Martin, Development Finance International Director.

“Recovering from the pandemic, however, offers SADC governments a once-in-a-generation opportunity to do what their citizens want – to increase taxes on the wealthy and large corporations, to boost public spending especially on healthcare, education and social protection, and to boost workers’ rights in order to tackle joblessness and precarious work. With external support, for instance through debt relief and aid, SADC governments could reduce inequality drastically and eliminate extreme poverty by 2030.”

Notes

Southern Africa is the most unequal region in the world and contains the world’s three most unequal countries (South Africa, Namibia and Zambia), and another 3 of the 10 most unequal (Eswatini, Mozambique and Botswana). All SADC member states, except Tanzania and Mauritius, are in the top 50 most unequal countries.

The region has low proportions of workers with formal contracts and rights (and therefore access to sick pay, job protection, etc.), with fewer than 40% having such rights in Malawi, Zimbabwe, Angola, DRC, Zambia, Tanzania, Mozambique and Madagascar.

Many countries had limited access to essential health services, reaching under 50% of the population in seven countries, and forcing 5.4% of people to spend catastrophic proportions (i.e. more than 10%) of their income on healthcare across the region. These poor indicators reflected low commitments to healthcare spending, with this accounting for under 10% of government budgets in Zambia, Mozambique, Malawi, Madagascar and Tanzania.

Big pharma urged to address vaccine inequity

April 29, 2022

In separate virtual addresses to the shareholders of Moderna, Pfizer, and Johnson & Johnson (JNJ), Oxfam called on the pharmaceutical corporations to improve COVID-19 vaccine equity and access so that everyone, everywhere has access to these life-saving shots.

Oxfam’s resolutions to Moderna and Pfizer call on the companies to study the feasibility of transferring vaccine technology and know-how to urgently ramp up production and improve sustainable access around the world. In a separate resolution before Johnson & Johnson shareholders, Oxfam seeks transparency on how the company determines pricing for its COVID vaccines in light of the billions of dollars of public funding from US taxpayers the company received.

Oxfam has urged all three vaccine manufacturers to share their technical know-how with the World Health Organization (WHO) to leverage the world’s full manufacturing capacity and support regionally based production as a means to increase the overall supply, reduce on-the-ground distributional challenges, and respond to the desire of low-and middle-income countries to produce doses for their own citizens.

“If Moderna worked with us, we could submit the WHO’s COVID-19 Vaccine mRNA Technology Transfer hub’s vaccine for approval at least one year sooner, which would save lives, decrease the risk of variants, and reduce the pandemic’s economic toll,” said Dr. Tedros Adhanom Ghebreyesus, Director-General of the World Health Organization, in his unprecedented presentation of the Oxfam resolution to Moderna shareholders via a pre-recorded statement. “We urge Moderna to share technology and know-how with the WHO hub and commit to not enforcing patents for COVID-19 and other essential vaccines in countries hosting the WHO hub and spokes. We also urge them to offer training to scientists working on those efforts through the Moderna mRNA access program.”

“We are in the midst of the greatest public health crisis in 100 years. Despite safe and effective vaccines like Pfizer’s, thousands of people are still dying every day because protections against the coronavirus have not been made accessible to all,” said Ady Barkan, Founder and Co-Executive Director of Be A Hero, presenting the Oxfam resolution to Pfizer shareholders via recording. “Billions of people remain unvaccinated in part because Pfizer cannot produce enough doses on its own. And yet, Pfizer refuses to share its technology to boost global manufacturing.”

JNJ’s COVID-19 vaccine has protected people against severe illness and saved lives—yet the company has not done enough to ensure equitable access and transparency about its pricing strategy, despite the massive investment of 1.5 billion dollars in public funds that JNJ received,” said Maaza Seyoum, Global South Convener, People’s Vaccine Alliance, presenting the Oxfam resolution to Johnson & Johnson shareholders via recording. “This injustice has heartbreaking consequences. Millions of grandparents and healthcare workers across Africa are not protected from this virus. In India alone, over two million children have lost a parent to the pandemic. These lives matter.”

Oxfam filed the shareholder resolutions because more than two years into the COVID-19 pandemic and a year after the introduction of highly effective life-saving vaccines, 74 percent of people in high-income countries are fully vaccinated, while just 12 percent of people in low-income countries are.

The failure of major pharmaceutical companies to do more to ensure vaccine equity and access threatens the companies’ reputations and the interests of corporate investors who are impacted by the pandemic’s continued impact on the global economy, in addition to the devastating toll in illness and death.

“Moderna, Pfizer, and Johnson & Johnson have prioritized short-term profit-making over long-term sustainability and reputational risks, as well as public health needs. The flawed donation-based model has produced vast vaccine inequity, despite the desire, willingness, and ability for countries around the world to produce their own doses for their own citizens,” said Abby Maxman, President and CEO of Oxfam America. “We are proud to partner with Dr. Tedros, Ady Barkan, and Maaza Seyoum to urge shareholders to realize that a model based on tech sharing and local production will not only help end the current pandemic but also make the world more resilient for the future.”

Significant number of Moderna and Pfizer shareholders support vaccine technology transfer

April 29, 2022

An Oxfam resolution before Moderna shareholders received 24% of the nominal vote, or 29% of the independent vote factoring in the 17% of the vote share owned by the company’s directors and senior executives. A similar resolution before Pfizer shareholders garnered 27% of the vote.

The unprecedented Oxfam resolutions, introduced at the Moderna Annual General Meeting today by Dr. Tedros Adhanom Ghebreyesus, Director-General of the World Health Organization and by Ady Barkan, Founder and Co-Executive Director of Be A Hero at the Pfizer Annual General Meeting, urged the companies to study the feasibility of transferring vaccine technology and know-how to urgently ramp up production and improve sustainable access around the world.

In reaction to the votes, Robbie Silverman, Oxfam America’s Senior Manager of Private Sector Advocacy, made the following statement:

“We are pleased to see that nearly 30% of Moderna and Pfizer’s investors agree that the companies should explore the feasibility of transferring its technology to spur manufacturing in low- and middle-income countries. This is the first time that shareholders have voted for a resolution like this on any company proxy ballot.

“Unprecedented risks posed by an unprecedented global pandemic call for novel solutions – and a significant number of Moderna shareholders agree with the bold action we proposed.

“Only 12% of people in low-income countries are vaccinated today– as Dr. Tedros said, this is a “failure of humanity” and threatens the health of all of us, as new variants continue to emerge.

“The countries most impacted are clear on what they believe is the best and most effective way to vaccinate their own citizens – transferring the technology and investing in locally-based manufacturing.

“By every metric, the current donations-based model has failed – it leaves countries at the mercy of rich countries and profit-driven countries; exacerbates on-the-ground distributional challenges; and leaves the world with the same inequities and vulnerabilities that have plagued the global response since the start of the pandemic.

“We believe this strong vote share demonstrates that a significant number of Moderna and Pfizer’s shareholders recognize that the only sustainable way to end the pandemic is to leverage the world’s full manufacturing capacity as quickly as possible. We call on these companies to actively collaborate with the WHO to use every possible tool to combat the scourge of COVID-19, save lives, and restore public health and the global economy.”

At its Annual General Meeting, Johnson & Johnson did not announce vote totals for the resolutions it faced, including Oxfam’s resolution, introduced by Maaza Seyoum, Global South Convener, People’s Vaccine Alliance, calling on the company to be more transparent about its pricing for its COVID vaccines in light of the billions of dollars of public funding from US taxpayers. The company has four days to file that information with the Securities and Exchange Commission.

Demands for austerity and spiralling debt are ‘sabotaging’ Africa’s Covid-19 recovery

April 19, 2022

43 African governments are facing expenditure cuts totalling $183 billion (equivalent to 5.4 percent of GDP) over the next five years, reveals new analysis from Oxfam and Development Finance International (DFI) today. If these cuts are implemented, their chances of achieving the UN’s Sustainable Development Goals will likely disappear.

The Commitment to Reducing Inequality Index: Africa Briefing Paper shows that Africa’s debt burden is stifling post-COVID economic recovery and stagnating the public services necessary to reduce poverty and inequality. Africa’s debt burden has been climbing steadily, averaging 67 percent of GDP in 2021. Debt repayments are equivalent to 51 percent of African countries’ budget revenue and 22 times more than their spending on social protection. Debt servicing exceeds spending on healthcare in all but six African countries, rising to 77 times more in South Sudan. The G20 countries have so far offered little relief: debt cancellation or suspension amounts to just $9.3 billion.

‘‘Majority of African governments know and want to lift their citizens from poverty but their coffers are empty, so they need support instead of more pressure,’’ said Peter Kamalingin, Oxfam’s Pan Africa Program director. ‘‘At a time when poor countries are faced with increasing costs of living and with poor people unable to afford food, it cannot be the time to suffocate them with more austerity. That is the surest way to undermine recovery, widen inequality and destroy livelihoods.’’

The index ranks 47 African countries on their policies on public services, tax and workers’ rights. South Africa ranks first, followed by Seychelles, Tunisia, Namibia and Lesotho. At the bottom are South Sudan, Nigeria, Chad, Liberia and the Central African Republic. North Africa outperforms Africa’s other subregions, with Central Africa ranking last.

The analysis shows that African governments’ failure to tackle inequality ― through support for public healthcare and education, workers’ rights and a fair tax system ― left them woefully ill-equipped to tackle the COVID-19 pandemic. The IMF has contributed to these failures by consistently pushing a policy agenda that seeks to balance national budgets through cuts to public services, increases in taxes paid by the poorest, and moves to undermine labour rights and protections. As a result, when COVID-19 struck, 52 percent of Africans lacked access to healthcare and 83 percent had no safety nets to fall back on if they lost their job or became sick.

Quality public services are proven to reduce inequality. For example, they have reduced inequality by 34 percent in Namibia, 22 percent in South Africa and 19 percent in Benin. However, Africa’s unfair tax system is increasing inequality by 1 percent. In Tanzania and Tunisia, fair tax policies have slashed inequality by 10 percent.

Oxfam and DFI are urging the G20 to reallocate and waive off unnecessary conditionalities so that lower-income countries can access most of the $100 billion worth of IMF Special Drawing Rights (SDRs) with ease. They are calling for increased aid flows to Africa to increase access to inequality-busting public services and COVID-19 vaccines. The vaccination rate in Africa needs to increase significantly if the continent is to meet the 70 percent vaccine coverage target set for June 2022.

‘‘That some governments have fared better than others at tackling inequality confirms we can end inequality if we make the right policy decisions. This must include taxing the wealthiest, curbing illicit financial flows, restructuring debt held by poor countries and ending the pandemic through equitable access to COVID-19 Vaccines and therapeutics.’’ ― Peter Kamalingin.

Notes to editors

Download Oxfam’s Commitment to Reducing Inequality Index: Africa.

Our analysis of the IMF’s COVID-19 loans during the first year of the pandemic is also available for download.

Crisis deepening: Gordon Brown warns of unjustified “COVID-19 complacency” and $16 billion gap in vaccine and treatment regime

February 15, 2022

“I’m not sure the world will ever forgive us” for worsening vaccine inequality and treatment of Africa “as bad as under colonial rule”, says former UK prime minister on Oxfam podcast

“People have become complacent about COVID-19. Our global (health) funds are fast running out of money. Vaccine inequity is getting worse,” said former UK prime minister Gordon Brown today.

Guesting on Oxfam’s EQUALS podcast, Brown said that “we must alert the conscience of the world” to act given the high possibility of more lethal variants “coming back to haunt even those who are fully vaccinated. We may feel safe, but we are not safe, as long as the disease can spread and mutate”.

Brown, who was appointed in 2021 as World Health Organization (WHO) Ambassador for Global Health Financing and is a member of the Club de Madrid forum of democratic former Presidents and Prime Ministers, spoke of rich countries approach to tackling COVID-19 so far as being an ethical, economic and epidemiological failure.

He warned that the Access to COVID-19 Tools Accelerator (ACT-A) ―the WHO’s initiative to coordinate the fastest health response out of the crisis― currently has a $16 billion funding hole. Brown spoke of only “weeks” left to resolve this.

“Unless the money comes in urgently, we will not be able to fund the next stages of vaccines, treatments, testing, and even the medical oxygen and PPE needed by nurses and doctors (around the world),” he said.

Brown wants governments to take “extraordinary measures” today as it did for the 2008 global financial crash. He urged them to share the burden of funding according to their ability to pay, as they do now in funding UN peacekeeping or the World Bank or the IMF, rather than “unfair” and failing voluntary contributions. He said how the world had eradicated smallpox was a successful example.

Brown said it was “short-sighted to take such a narrow view of national self-interest” for rich countries to vaccinate only their own citizens in prolonging a mutating crisis that could cost them $5 trillion in loss of trade, economic activities, companies going bust, and jobs lost. “This will bite back even those countries that have a big vaccination program,” he said, criticizing the fact that vaccination rates in rich countries currently stand at 75 percent against 11 percent across Africa.

“We need a vaccine patent waiver and technology transfer. What’s happened in Africa is as bad as what happened under colonial rule. Africa has been deprived of vaccines but also of the ability to manufacture its own vaccines because it does not have the patents to do so.” Brown slammed the EU as “unconscionable” for taking vaccines made in South Africa late last year, at a time that Europe was 60 percent vaccinated while Africa stood at less than 3 percent. He said that the “World Trade Organization should have agreed a long time ago” the patent waiver.

Brown said that the most urgent and immediate priority in tackling COVID-19 and getting more vaccines to people especially in developing countries was money. “People are dying now ―right now― because we can’t get enough vaccines and equipment and therapeutics to them quickly enough. We have to solve the problem now, and that requires proper funding now.”

“Even now more than 70 percent of vaccines are still coming to the G20 countries which means that the other 175 countries are simply losing out. We’re in this terrible position where 60 million vaccines have already had to be destroyed in the US, Canada, the UK and the European Union,” he said. 250 million more may have to be destroyed by Easter as being past their used-by date.

Brown said that the COVID-19 response was lacking funding, coordination and leadership. “An enlightened view of self-interest” would tell rich country leaders that all people must have the chance to be vaccinated to eradicate a disease that is likely to mutate and come back to hit you, he said.

Brown also called on social grassroots movements to come together around this “big picture” of saving lives. “We have to expose the anti-vaxx lies. We have to realise that social media matters. Most of all we have to give people a bridgehead of hope and a sense of that we can change things,” he said.

“If you can work for change and hope that the world can be a better place, you can persuade people to join you. I would stress organization and education and agitation, but I would stress the importance of persuading people that the world can be a better place through engendering hope in a better future.”

Notes

The EQUALS podcast about inequality is hosted by Oxfam. Listen to the latest episode with former UK Prime Minister Gordon Brown.

Oxfam reacts to Pfizer’s financial results on COVID-19 vaccine sales

February 9, 2022

In response to the publication of Pfizer’s financial results on COVID-19 vaccine sales for last year and projections for its Covid-19 vaccine and antiviral pill this year, Oxfam’s Robbie Silverman said:

“Pfizer’s results today are clear evidence of how the company has used its monopoly to enrich its shareholders at the expense of almost half the world’s population who still have no access to lifesaving vaccines.

“Millions are dying from COVID because companies like Pfizer have prioritised profits over saving lives. And it’s paying off for Pfizer, raking in as much as US$1 million every hour in profit.

“It is obscene that we have allowed pharmaceutical companies like Pfizer to put their profits before the good of humanity as the pandemic drags on. No corporations should decide who lives and who dies.”

Notes:

The latest data (from Dec 21) available shows that just one percent of Pfizer’s vaccines have been delivered to low-income countries.
Oxfam estimates Pfizer is making over US$1m an hour profit from the vaccine alone.
Pfizer and the other drugs companies are unable to produce enough vaccines for the world. Oxfam has issued a shareholder filing calling on Pfizer to study the feasibility of transferring vaccine technology and know-how so that production can urgently ramp up around the world.