2022 RI H1 Econs Prelims QP

8823/01/Prelim/Y6/22 © RI 2022 [Turn over RAFFLES INSTITUTION 2022 YEAR 6 PRELIMINARY EXAMINATION Higher 1 ECONOMICS 8823/1 Paper 1 30 August 2022 3 hours Additional Materials: Answer Paper READ THESE INSTRUCTIONS FIRST Write your name, index number and CT class on all the work you hand in. Write in dark blue or black pen on both sides of the paper. You may use a soft pencil for diagrams, graphs or rough working. Do not use paper clips, highlighters, glue or correction fluid. Answer all questions. The number of marks is given in brackets [ ] at the end of each part question. Use the cover sheets and tie your answer to the questions separately. This document consists of 4 printed pages and 2 blank pages.

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8823/01/Prelim/Y6/22 3 © RI 2022 Answer all questions. Question 1: Pharma Mia, here we go again Figure 1: Share of population at least partially vaccinated Source: https://www.vox.com, 9 November 2021 Extract 1: How to think about vaccines and patents in a pandemic Tech has, potentially, saved hundreds of thousands of lives from the novel coronavirus pandemic. Cutting-edge biotechnology and artificial intelligence (AI) have allowed scientists to develop vaccines for COVID-19 in less than a year, which is the fastest in terms of vaccination development for a major disease. With any luck, the world will be awash in COVID-19 vaccines by the end of the year. For now, though, it is not, and of the billion or so doses that have been produced the vast majority have been administered in richer countries. Deaths, by contrast, a re increasingly concentrated in poorer ones, like India, where only nine in every 100 people have been jabbed, compared with 64 in America. Some governments are floating radical options to remedy the mismatch. India and South Africa proposed that members of the World Trade Organisation waive intellectual- property (IP) protections for COVID-fighting technologies, including vaccines. Increasing the number of manufacturers globally would reduce prices, making vaccines more affordable to poorer countries. It would stabilise supply, minimising disruptions of the kind that occurred when India halted vaccine exports amidst a surge of COVID-19 cases. It is, therefore, essential to remove the legal barriers that hinder the scaling-up of the global vaccine production. Yet industry interests are right to say that liberating vaccine IP would not unleash a flood of new production. Most of the world’s vaccine- making capacity is already in use. Other more challenging constraints on production include the limited availability of raw materials and expertise needed to safely produce doses. Ex port restrictions by governments also interfere with supply chains. Arguments for retaining IP protections maintain that patent holders are the rightful owners of their inventions and are thus entitled to existing protections. With respect to COVID -19

8823/01/Prelim/Y6/22 4 © RI 2022 vaccines, the claim is that pharmaceutical companies own these vaccines, which are the products of their labour; no one can rightfully take what is theirs. In reply, the public has invested heavily, and these products are theirs’ too. Even when the translational part of product development is carried out by for-profit companies, this would be impossible without enormous upstream public investment . A 2021 review of published research on the technologies used in COVID -19 vaccines found that research and development on these technologies were funded primarily by the governments. Source: https://govinsider.asia, 21 May 2021 and https://www.economist.com, 22 April 2021 Extract 2: COVID Vaccines: Will drug companies make bumper profits? Typically, pharmaceutical companies charge different prices in different countries, according to what governments can afford. "Right now, governments in the rich world will pay high prices, they are so eager to get their hands on anything that can help bring an end to the pandemic," says Emily Field, head of European pharmaceutical research at Barclays. As soon as more vaccines come on stream, probably next year, competition may well push prices lower, she says. The World Health Organization meanwhile has warned wealthy countries against hoarding COVID-19 vaccines for booster shots as they try to fight off the new Omicron variant, Source: BBC news, 18 December 2020 and Reuters, 9 December 2021 Extract 3: How Should We Allocate Scarce Medical Resources? The COVID-19 pandemic has also undermined capacity and efforts to address other health needs that are just as pressing as the virus itself, particularly in low -income and middle- income countries (LMICs). Ongoing pressure on governments to act on COVID -19 now to save ‘immediately identifiable lives’ rather than ‘statistical lives at risk’ has had and will continue to have both short- term and long- term negative consequences for health. COVID- 19 and non-AIDS cancers were the leading causes of death among HIV-positive people in the UK in 2020, with AIDS and cardiovascular disease also cutting lives short. Overall, six out of seven deaths were due to non-AIDS causes. Source: https://hbr.org, 29 April 2020 and https://www.aidsmap.com , 21 April 2022 Extract 4: Food Markets During COVID-19 Several countries have imposed food export restrictions during the 2008 food price crisis, and some are now re-introducing them. During COVID-19, 22 countries already initiated export restrictions on one or more food products. The export restrictions are particularly significant when they concern staple foods, especially those in which countries imposing the restrictions hold a sizable share of the global market. While s uch restrictions are most likely to threaten the food security of those countries with both a low food self -sufficiency ratio and relatively high levels of hunger, export prohibitions may in the long run also hurt the countries imposing restrictions.

8823/01/Prelim/Y6/22 5 © RI 2022 Thailand is stepping up its battle against food inflation by extending price caps on dozens of essential goods for another year and funding energy subsidies for an extended period. The government will continue controlling prices of essential goods and services such as rice, sugar, medicines, fertilizers and healthcare services until June next year. Source: https://www.bloomberg.com, 17 June 2022 Extract 5: Polluter bailouts and lobbying during COVID-19 pandemic Polluting industries around the world are using the coronavirus pandemic to gain billions of dollars in bailouts and to weaken and delay environmental protections. S ome of the biggest fossil fuel -producing countries are injecting taxpayer money into propping up polluting industries. The fossil fuel industry, which already benefits from a $5 trillion-a-year subsidy, according to the IMF, has had the biggest wins during the coronavirus pandemic in the US and Canada. The controversial Keystone XL pipeline to transport tar sands oil from Canada to the US got the go-ahead, with $5bn in financial support. Other pipelines continued construction despite the lockdown. Republican senators asked the US federal government to “reduce, delay or suspend” taxes due on oil, gas and coal, while the National Mining Association lobbied to cut $220m in taxes intended to support coal miners affected by black lung disease. In the US, aviation got a $60bn bailout package and the suspension of many taxes. In the UK, major carrier easyJet got a £600m loan. In 2021, the UK government gave airlines nearly a quarter of a billion pounds in free pollution permits in a single year, enough for the entire industry to dodge a carbon emissions cap and trade scheme entirely. The government’s generosity meant not o