In this newsletter from EG4H…

•    Equitable and sustainable economic governance: for health, for all: EG4H is seeking partners for a consensus statement on global economic governance and its impact on health.
•    A Private Equity Fund for African health systems: The Gates Foundation and the dangers of their support for private sector involvement in healthcare
•    Can the ‘Taskforce’ pull the MDG rabbit out of the hat?: A high level taskforce reports on financing for health and the likelihood of meeting the MDGs
•    Just Out! Links to the latest writing and events on economic governance for health

Are you interested in helping us get the word out about the importance of economic governance for health?

Would you like to do more and join our active campaign outreach network? We have an expanding number of ‘outreachers’ who help amplify our message.

Typically they do this by:

•    Forwarding information about EG4H to your own network of contacts and lists
•    Encouraging people to respond to an EG4H request or to take up action on an event we are promoting.

If you are interested in joining this network of active campaigners, or can suggest organizations – or better still key people within those organizations – whom we should contact, please send an email to info@eg4health.org

Equitable and sustainable economic governance: for health, for all.

The more we read, the more it becomes apparent that the global health community must address some of the underlying political and economic arrangements that keep poor people poor. Focusing on health financing is important, but aid and development assistance will never be enough to fix the problems long term.

Impending climate collapse also makes it imperative for us to act on the broader design, structure and governance of the global economy.

This is a daunting and complex task, and for that reason we are not suggesting we stop focusing on specific health goals and targets, whether they be linked to diseases, mothers or children. However, we need to look beyond aid and development assistance, innovative financing and the new growing promotion of philanthrocapitalism!

This is why Economic Governance for Health was established as an initiative

EG4H is now planning to develop a consensus statement on global economic governance for health – we want to facilitate the drafting of a statement by a group of up to ten health-related NGOs + a group of NGOs that are primarily engaged in global economic governance (from a non-health perspective)

If there is interest from people / organisations in participating in this effort, please let us know – we are at the very early stages of planning, so any advice on this idea would also be welcome.

A Private Equity Fund for African health systems.

The World Bank’s investment arm said on Thursday that it had teamed up with the Bill and Melinda Gates’s Foundation, the African Development Bank, and the German development finance institution DEG to form a private equity fund to invest in African healthcare companies.
What is the Health in Africa fund?

It’s managed by Aureos Capital and will invest in small- and medium-sized companies in sub-Saharan Africa, such as health clinics and diagnostic centers. Its “function” is to help implement key recommendations of a report published by the World Bank Group’s International Finance Corporation (IFC) recommendations that include mobilizing public and donor funding to the private sector; modifying local and public policies to make them more private-sector-friendly; and fostering risk pooling mechanisms (such as commercial insurance schemes).

As reported by allAfrica.com, the fund “will make long-term equity and quasi-equity investments in socially responsible and financially sustainable private health companies”. The Gates Foundation has committed $7m so far to the Fund, which hopes to secure $100-120m in the next 12 months.
So what’s the problem?

According to Lars Thunell, CEO of the International Finance Corporation (which is a member of the World Bank Group), there is no problem: the fund is “a great opportunity to provide health services where it’s needed most”. Needless to say, this isn’t the whole story, and many civil society groups and NGOs are highly critical of this move by the Gates foundation to finance what Oxfam describes as the growing commercialisation of health care in Africa. As EG4H has reported in earlier newsletters, Oxfam’s report Blind Optimism argues that scaling-up private-sector provision in poor countries is extremely unlikely to deliver health for poor people.

A report on Private Health Insurance Funds in Africa for EQUINET argues that private insurance is
“inimical to equity in any context, except where it only offers a ‘top-up’ to a comprehensive basic package of services available to all on the basis of need”, and recommends donors support African governments’ efforts to reform its public health institutions so that they can procure and supply drugs more efficiently.

The resurgent interest by the Gates Foundation in financing the private sector, a strategy euphemistically called ‘innovation’ by the Foundation, comes at a time when it is repeatedly canceling or failing to renew public sector grants aimed at strengthening health systems. In his Annual Letter, Gates indicates that his Foundation is interested in improving markets by making them “work better for the poor” or by providing incentives where “the market doesn’t naturally work towards the right goals.” But as Wendy Johnson of Health Alliance International points out: “Gates is overlooking the fact that these [market] approaches have failed to yield the results he says are such critical criteria for their funding decisions”.

Get with the program Bill!

It’s important that Gates Foundation understand that the Bank and IFC are NOT “on the right track” in their thinking about private sector involvement in health. The consequences of taking this route would be a disaster for the poor in Africa, as Sue Perez from Treatment Action Group makes clear: “This will result in empowering for-profit African companies where many are operating in an environment without regulation of the private sector, increasing out of pocket expenditures and further increasing poverty”.

So what should Gates be doing instead? Instead of just assuming that what African governments need, or want, is investment in their private healthcare companies, why not see if its money might be better spent – and better received – through investing in community based programs that serve the poor, vulnerable and marginalized, or help build civil society capacity to better coordinate and have the knowledge to more effectively engage in planning of health sector plans. Or the Foundation could do what it does best and support R&D into new and more effective drugs and vaccines, or see if African governments need financial support to develop regulatory frameworks that protect the poor. Were these alternatives ever on the Foundation’s health agenda, one wonders? We’ll probably never know because, as Gates happily reports in his annual Letter: “Foundations are unusual because they don’t have to worry about being voted out at the next election or board meeting”.

If you want to find out more about the Gates Foundation and global health, see Global Health Watch 2

Can the ‘Taskforce’ pull the MDG rabbit out of the hat?

As anyone interested in the economics of global health will know, there is an alphabet soup of organisations, institutions, and think tanks out there threatening to spill down our chins. Sadly, however, there is no catchy acronym for (take a deep breath)…The High Level Taskforce on Innovative International Financing for Health Systems. This is a shame because the – let’s call it the ‘Taskforce’ – should be on everyone’s lips.
What is the Taskforce?

In Sept 2008, the Taskforce was set up to work out how to raise additional funding for health to help ensure that the Millennium Development Goals will be met in 2015. Total annual spending on health in low-income countries is currently $30bn. $67-76bn is needed annually by 2015 to reach the Millennium Development Goal targets. In other words, over the next 6 years an additional $251bn needs to be raised (the difference between $30bn and $67-76bn x 6 years). Most of this will have to come from bilateral and national funding sources, but the Taskforce hopes to raise $10bn per annum through “innovative development finance”.

Two Working Groups have been looking at the obstacles to raising this substantial sum (WG1), and new ways of leveraging additional funds (WG2). The Taskforce is going to present its recommendations to the G8 in Italy next month, and in advance of that meeting it has just published its Final Report.
What is the Taskforce recommending to fund this financing gap?

The Taskforce will present a range of strategies for “innovative development finance”. One recommendation is to ask more countries to impose a mandatory levy on airline tickets. France has been doing this for a while now and the Taskforce calculates that if others join, it could raise $200-400m. This would be a more convincing strategy if airline tickets reflected the cost of the flight, but they don’t. As frequent flyers will tell you, tickets are very cheap – some airlines are charging nothing at all for their tickets – it’s the tax that costs the money.

What is interesting about the levy on air travel is expanding the idea to other commodities such as tobacco and also currency transactions. Giving a new lease of life to the side-lined Tobin tax, placing a levy on currency transactions has proved to be of particular interest to activist groups who have been pushing their governments to adopt it.

Other recommendations include expanding the International Financing Facility for Immunization (IFFIm) – a mechanism that provides ‘front-loaded’ financing to quick-start projects; ‘de-tax’ – which reduces the VAT on any good or service sold by a private business supporting the scheme, which then, in return, donates a percentage of any profit made from that good or service to the initiative; expanding support for ‘buy-down’ funding; and strengthening government capacity to get more investment from the private sector, NGOs, and other non-state actors.

An exercise in damage limitation?

The best-case scenario in the Report is that 80% of countries will reach MDG 4, with just 45% reaching MDG 5 targets. Are we reading in this Report the first murmurs of a prolonged damage limitation exercise: that yet another set of optimistic global health targets will not be met? Will the G8 ministers use this report to scale-down expectations and gloss over collective failure by governments to meet their commitments.

Let’s hope nobody makes any awkward comparisons to spending sprees elsewhere during this past decade of economic prosperity. For example, let’s hope nobody mentions Linda Bilmes and Joseph Stiglitz calculation costing the Iraq war at $3Trillion. And let’s keep our fingers crossed that no-one is impolite enough to point out that, in the face of a global financial crisis, the UK quickly pledged £500bn to bail-out British banks, the EU states committed £1.16 trillion and the US invested £457bn in their efforts to shore up an ailing financial system. At £2.1 trillion, as a UK broadsheet reported last year, the cost of the bail-outs is a third bigger than the entire British economy, which could fund the NHS for more than 20 years.

In the final analysis, the amount of money found to bail out the banks and high consumption economies of the North, together with the possibility of declining levels of ODA and the continued extraction of natural resources from many poor regions of the world, highlights the failure of the Taskforce to develop anything really innovative. The Taskforce is like a magician reaching into its top hat hoping to pull out a rabbit: If it succeeds, there will be a collective sigh of relief, and pats on the back all round. If it fails, we can expect four million child and infant deaths annually; 322,000 maternal deaths; 193,000 adult HIV deaths; 265,000 tuberculosis deaths…grim reading indeed.

Just out! Links to the latest writing and events on economic governance for health

•    The 15%+ Campaign on Health Development and Financing: The Africa Public Health Alliance and 15%+ Campaign is now stepping up its campaign to hold African Heads of State to their commitment to allocate 15% of annual domestic budgets to health. In June, African activists called on Leaders at the 2009 World Economic Forum on Africa to Prioritise Health Financing and Close the Resource Gap to Secure Universal Access to HIV and TB Care

•    Jubilee Debt Campaign Report: The Jubilee Debt Campaign Report: A new debt crisis? has just been published that assesses the impact of the financial crisis on developing countries

•    Join the ‘Health For All’ online debate: The Broker has been hosting a debate online about Health For All.

EG4Health is more than words – and it’s now even easier to get involved!

1.    Add your name to our open letter to Dr Margaret Chan
2.    Join the group – simply send an email to info@eg4health.org
3.    Sign our 30 second supporter survey – we want to know how to help strengthen your collective voice through our campaigning and advocacy work