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Supply Chain Risk

Vaccine progress: Mekong economies remain susceptible

Cambodia

Cambodia recently received 600,000 out of 1 million doses of Sinopharm COVID-19 vaccine promised by China. India has also pledged support by donating100,000 doses of its Astra Zeneca-SII vaccine on an urgent basis, while Australia has pledged $US28 million to Cambodia to purchase 3 million vaccine doses approved by the World Health Organisation (WHO). Cambodia is also set to receive nearly 1.3 million doses through the WHO’s COVAX initiative over the first half of 2021, with delivery expected to begin by the end of February according to interim distribution predictions published by COVAX. The timeline for receiving the remaining approximately 5.7 million doses under the COVAX facility is not confirmed.

With a population of nearly 17 million, Cambodia will need to vaccinate nearly 12 million people to achieve herd-immunity. This means 24 million vaccine doses are required, assuming two shots per inoculation. As such, the total pledges received by Cambodia so far only add up to less than 11 million doses, sufficient to inoculate roughly one third of the population. Mass vaccination is expected to commence in March/April upon the receipt of the COVAX consignment. However, it is unlikely to gather the desired momentum amid erratic supply vis-à-vis the required number of doses. ANZ Research expects the majority of the Cambodian population to be inoculated over 2022, at best. Herd immunity in Cambodia may remain elusive till 2023, based on current information on vaccine procurement.

However, from an economic perspective, it is worth noting a large part of the downturn in the Cambodian economy was due to a decline in foreign tourist arrivals, since its own domestic pandemic burden is quite low. As such, a resumption of global tourism following vaccination in other countries is vital for a full economic turnaround in Cambodia, on top of its own vaccination drive.

Lao PDR

Laos has received 300,000 vaccine doses of Sinopharm COVID-19 vaccine from China while it has also been carrying out trials on Russia’s Sputnik-V vaccine. Once the formalities and registrations are completed, Laos plans to secure 2 million doses from Russia by the end of 2021. It also expects to receive vaccine support from the WHO’s global COVAX facility to the tune of 600,000 doses over the first half of 2021, while the timeline for the remaining nearly 2.4 million doses is not yet certain at this stage.

While cognisant of Laos’ low domestic COVID-19 burden, ANZ Research estimates Laos will need to inoculate roughly 5.2 million people to achieve herd immunity, therefore requiring 10.4 million vaccine doses. The currently pledged support fulfils only half of its total requirements. Similar to Cambodia, ANZ Research expects the vaccination drive will pick up momentum only by late 2021 – in an optimistic scenario – with the bulk of the population receiving their vaccine shots only over the course of 2022.

Myanmar

Myanmar’s high COVID-19 case count makes it an outlier in the CLMV group. The attendant drag on domestic demand is expected to be sharp as the pandemic has prevented any material relaxation of restrictions, unlike in other neighbouring economies. Vaccination is of greatest relative need in Myanmar to contain the damage to human health and the economy.

Myanmar has ordered 30 million vaccine doses from India and has received 1.5 million doses to date. It has also approved the use of Russia’s vaccine while China has pledged 300,000 doses of its Sinovac vaccine. According to COVAX interim distribution forecasts, Myanmar is expecting to receive nearly 4.2 million doses over the first half of 2021 with delivery beginning at the end of February. The timeline for delivery of the remaining approximately 17.6 million doses under the COVAX facility is not yet known. As such, the total number of vaccine doses currently rests at nearly 52 million doses, out of nearly 77 million needed to vaccinate 70 per cent of Myanmar’s population. In addition, the recent turn of political events in Myanmar may increase uncertainty over vaccine procurement, funding and dissemination plans, which could also delay its overall vaccination drive.

Vietnam

Vietnam recently placed an order with Astra Zeneca for 30 million doses of their COVID-19 vaccine, to be delivered in batches over 2021. In addition, from a total of approximately 31.2 million doses slated for Vietnam under the WHO’s COVAX facility, it is set to receive 4.9 million doses by July 2021, with delivery starting from the end of February. Vietnam also has several domestically produced vaccine candidates, which if approved, will buttress its vaccination plans.

Vietnam is the most populous country in the CLMV group with nearly 100 million people. ANZ Research estimates suggest it will need around 137 million vaccine doses to inoculate 70 per cent of its population to achieve herd immunity. The size of its currently planned vaccine procurement is slightly more than 61 million doses, which is less than half of its overall needs. However, Vietnam will still be the frontrunner among CLMV economies in terms of the speed of its vaccination program, in ANZ Research’s view. Given its large independent orders that are to be delivered over 2021, its vaccination drive will be able to gather momentum sooner than its peers.

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