In this newsletter from EG4H…

Why the IMF and Fiscal Policy is so central to the Health MDGs: A report on why, more than ever, the International Monetary Fund’s macro-economic and fiscal policy are issues that the public health community must understand and engage with.

‘As kingfishers catch fire, dragonflies draw flame…’: Learn how our global health institutions are beginning to burn as the economic crisis bites.

High Level Taskforce keeps their data under wraps – Find out why the High Level Taskforce won’t publish its data on financing gaps.

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

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* Forwarding information about EG4H to your own network of contacts and lists
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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

Why the IMF and Fiscal Policy is so central to the Health MDGs

The IMF, together with the World Bank, bear a huge degree of responsibility for having helped sustain the illegitimate and odious debt burden under which hundreds of millions of innocent people have found their access to schools, clinics and hospitals eroded since the 1980s .

But in spite of this and the failure to provide any reasonable buffer to the disastrous unravelling of global financial regulation and transparency which preceded the so-called ‘credit crunch’, the IMF emerged after the G20 meeting in April smelling of roses.

The IMF extends its influence over poor countries’ economies

Facing a financial crisis of its own years before the global economic troubles (primarily because many “emerging market” countries had turned their back on the IMF), the Fund has now been offered hundreds of billions of dollars of new money to manage the fall-out of the credit crunch and stave off an economic recession. Most of this money will be used to bail out the discredited banking system and sustain the high-consumption economies of the rich world. However, some money has been ear marked for poor countries, extending yet further the influence of the IMF over their economic policies.

The health impact of IMF policies: data from sub-Saharan Africa

Why is this relevant to the international health community? Two recent reports provide an explanation: Education on the Brink by the Global Campaign for Education, and a report by the Centre for Economic Governance and AIDS in Africa ‘Evidence of the Impact of IMF Fiscal and Monetary Policies on the Capacity to Address the HIV/AIDS and TB Crises in Kenya, Tanzania and Zambia’.

In summary, the reports describe the effect of the IMF on the number of health workers and teachers who can be employed and adequately remunerated to provide essential services. It does this by influencing a country’s policy on inflation and foreign currency reserves targets, as well as on fiscal deficit and public expenditure ceilings. Such ceilings are one of the principal reasons why many Ministries of Health are unable to recruit enough health workers, or to pay them a living wage.

For years, development economists and health activists have been arguing that these macroeconomic policies undermine efforts to achieve the MDGs and the universal rights of all people to essential services. Even the Fund’s own Independent Evaluation Office found that its policy conditions had inappropriately prevented Sub-Saharan Africa countries from effectively spending aid – only 27% of the additional international aid to sub-Saharan Africa from 1999 to 2006 was actually spent, with the other 73% put into foreign currency reserves (see full report here).

IMF double standards

The current global financial crisis has now made the picture dramatically worse by showing up the clear double standards being applied by the IMF to rich and poor countries. High-income countries are being allowed (even encouraged) to break the very same rules which prevent poor countries from training, hiring and adequately remunerating an acceptable number of doctors, nurses and teachers. Clear examples of this are the current fiscal deficits of the United States and the United Kingdom.

It is now also increasingly clear that without a change in the orthodox macro-economic policies of the IMF, the global economic recession will have a devastating impact on the lives of billions of people and consign the world to an abject failure in reaching even the modest targets of the MDGs.

‘As kingfishers catch fire, dragonflies draw flame…’ – or how our global health institutions are beginning to burn as the economic crisis bites.

Failed pledges and funding gaps

The global economy has crashed and is continuing to burn, and as a new report by the UN Conference on Trade and Development (UNCTAD) makes clear it is the poorest countries that are suffering most. “The general expectation” argue the Reports’ authors is that Foreign Direct Investment to Least Developed Countriess “will decline over the next few years” and workers remittances will also fall.

Inevitably, global governance institutions responsible for financing global health are now beginning to feel the heat as traditional funding sources start to dry up. A recent World Bank/UNAIDS report, for example, warns that the global economic crisis is already crippling global HIV/AIDS treatment and prevention programs; the UN head Ban-Ki Moon announced earlier this month that the G8 and G20 groups of developed countries were failing on their pledges to boost their aid funds to poor nations by 2010 to help them achieve the MDGs; and the Global Fund is anticipating a $3bn funding gap from its 2010 replenishment.

But Development Assistance for Health is on the up, isn’t it?

With this gloomy economic forecast, recent evidence of a quadrupling of development assistance for health (DAH) since 1990 (read the Lancet report here and the just-published Report by the Institute for Health Metrics and Evaluation here) paint an encouraging but poignantly redundant picture of the state of global health finances. Because its data stop just short of the start of the financial meltdown, its findings have limited utility – a bit like navigation charts of the river Niagara stopping just short of the falls.

PEPFAR forecast: rain clouds on the horizon?

What the Report does ask, right at the end of its analysis, is the question on everyone’s lips: will public monies for global health grow at a slower rate, stay constant, or contract? It doesn’t provide an answer, but it does offer an important indicator: the appropriation discussions for PEPFAR re-authorization.

On this indicator alone, the signs are not good. US Congress has approved $48 billion for PEPFAR over FY 2009 – 2013. Extrapolating by an extra year, this would come to $57.6 billion over FY 2009-2014. President Obama’s PEPFAR commitment, however, for FY 2009-2014 is $51 billion – in other words, downsizing to the tune of $6.6 billion (for these data and more from Global Health, click here).

Voices from the poorest countries are beginning to speak up about their worries. Writing in the lancet, the Executive Director of Uganda’s Joint Clinical Research Centre described the “flat-line funding for PEPFAR” as “a recipe for chaos”. “The global financial crisis” argues Dr Mugyenyi “cannot justify a return to the bleak pre-PEPFAR days when limited drug supplies forced us… to choose which desperately ill patients live and which ones die”. Let’s hope President Obama is listening.

High Level Taskforce keeps their data under wraps

In Newsletter 7, we reported on the latest work of two Working Groups of the High Level Taskforce on International Innovative Financing (aka ‘the Taskforce’).

$10 billion – the estimated financing gap for health

Many NGO advocacy groups have been questioning the assumptions and calculations made by the Taskforce to estimate the health care financing gap. A low (and potentially misleading) figure of $10 billion is reported in the Taskforce Final Report – the figure the Working Group says would be needed to top up the finance that would be derived from current donor and Abuja commitments. However, there are many assumptions and caveats built into this calculation that need to be questioned and challenged.

EG4Health therefore wrote to the secretariat of the International Health Partnership (IHP+), which hosts the Taskforce, requesting access to the primary data. In the final report of WG1, the two key references for the $10 billion remain unpublished.

“Country data cannot be released”

One of our requests was to have access to the data on a country-by-country basis. This would help, among other things, an examination of the full potential for expanding domestic finance for health. It would also help examine the critical issue of how human resources for scaling up health services can be scaled up. Below is the response we got from the secretariat to my request:

“I have discussed with the Working Group chair who confirms that the country data cannot be released, at the request of many of the countries themselves, and that this level of detail will not be in the published technical reports mentioned here. I am sorry not to be of more help!”

Subsequent to this communication, EG4Health received a further explanation informing us that the primary reason for the country-specific data not being made available was because countries do not want this. Part of the reason for this is that the costing models are complicated and built on many assumptions and guesstimates. As the main purpose of the exercise was to generate a global price tag, it was felt that the release of country-specific data might cause confusion.

This however is a great pity. Not only does it harm the principle of transparency and data sharing, it is a missed opportunity to develop more inclusive and data-led country-based approaches to health sector planning.

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

• Financing Global Health 2009: Tracking Development Assistance for Health. The Institute for Health Metrics and Evaluation (IHME) at the University of Washington,July 22 – 2009

• At the 5th International AIDS Society conference in Cape Town (July 19-22nd) advocates for all the health MDGs charged G8 leaders with reneging on their commitments to health by chronically underfunding programs for AIDS, TB, maternal and child health, sexual and reproductive health, and health systems strengthening across the globe.

• Global health funding: how much, where it comes from and where it goes. A report just published in the journal Health Policy and Planning showing that the volume of official development assistance for health is frequently inflated; and that data on private sources of global health finance are inadequate but indicate a large and important role of private actors.

• The Least Developed Countries Report: The State and Development Governance, UNCTAD, 2009. A Report calling for increased focus on strengthening domestic capacity by building a new ‘developmental State’ and by re-designing the rules that govern international economic relationships with regard to trade, finance, investment and technology flows, in ways which would support development in LDCs.

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