BLOG - Developing world vaccine and financing crises threaten years of depressed growth

Author: John Richardson

2021/06/11

SINGAPORE (ICIS)--Click here to see the latest blog post on Asian Chemical Connections by John Richardson.

The good news this morning is that the G7 has pledged to provide a billion doses of vaccines to poorer countries.

But it costs three times more to distribute and administer each shot of vaccine as it does to buy the dose, a major issue for developing countries with weak healthcare systems. So, funding from the G7, which is meeting on 11-13 June in the UK, is also needed.

Less than 2% of Africans have received their first vaccine shots compared with 75% in the UK.

The gulf between developed world and developing world financing costs has also widened because of the different pace of vaccinations. Poorer countries would face even tighter lending conditions if the Fed raised interest rates.

We detail in today’s post what this may mean for HDPE demand in the developing world in 2021-2025. We also detail the effects on global consumption and operating rates.

In our downside scenario, cumulative global HDPE demand in 2021-2025 would be 21m tonnes smaller than our upside. Similar downside risks of course apply to other petrochemicals.

There is another risk we will discuss next week:  the West pushing ahead with reducing greenhouse gas emissions as the developing world struggles to find the money and focus to do likewise. This is to some extent already happening.

Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.