Paying for Health in poor countries

Oct 7, 2008 | Budget Transparency | 1 comment

In too many countries access to basic health services is severely limited. Commitments for assistance from the international community are variable and provided for finite periods. Financial support of this kind doesn’t allow for the long-term investments needed to build a comprehensive health care system, such as infrastructure and training the necessary personnel.

In the latest IBP brief, Gorik Ooms of the Institute of Tropical Medicine proposes the creation of a Global Health Fund that could provide constant long-term support to poor countries. He argues that-as the creation of the Global Fund did in the fight against AIDS-a Global Health Fund could provide an international foundation on which national social health protection could be built.

He argues further that such a fund is affordable and sustainable if one looks at total global health expenditure rather than at the revenue of individual poor countries. If we assume that the global economy can afford to spend the equivalent of 4 % of their GDP on health – which is far less than what most countries are currently spending on health – then a health expenditure level of US$ 300 per person per year would become affordable and sustainable.

Ooms also argues that in the last analysis, the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights also puts a legal obligation on rich countries to support poor countries in this way.
What do you think? Will sustainable long term funding help poor countries create the health systems they need? And do you think that they creation of such a fund is sustainable?

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1 Comment

  1. Ravi Duggal

    With the global economic crises deepening, access to healthcare in already deprived developing countries/transitional economies is going to get worse. The poor not only in poor countries but also elsewhere face increasing difficulty in accessing healthcare. Public healthcare expenditures in most developing countries are declining as a proportion to its GDP as well as a proportion of total government spending. This is increasing the out-of-pocket burden on households, especially the poor who have difficult access to public health services and are now forced to turn to the private sector for care often getting into indebtedness in the process.

    In such a scenario is creation of another Global Health Fund a solution. I dont think so. The answer lies in the macro-economics of the global political economy which has impacted drastically the capacity of governments, especially in dveloping countries, to raise tax revenues. For instance in mid-eighties India had a Tax:GDP ratio of over 25% which came down post-1991 Structural Adjustment reforms to a low of 9% and presently due to the high growth rate for the last few years has reached 17%. With such resource constraints social security – health, education, housing – are unlikely to get substantial budget support. Raising tax:GDP ratios is essential for a sustained support to healthcare budgets.

    Further why create another global fund when we already have the Rio Declaration for commitment of 0.72% of GDP by developed countries and this is best channeled through UN institutions rather than non-UN structures which may have stron private vested interests and are likely to be less accountable than UN agencies. So developed countries honouring their commitments will be adequate to generate global resources to support situations of crises. But as I said above it is more important to build internal strengths of developing country governments and for this the solution lies in changing the current macroeconomics of the global political economy. The US government bailing out finance capital by pumping $700 billion and other European govts. following suit is fuel for further catastrophies in the global political economy. The solution lies in changing the development paradigm in the direction of the earlier social democracies of Europe, which is a balanced mix of capitalism and socialism.


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