Governments around the world argue that there is no money for badly needed public services. But the author of this briefing note disagrees, pointing to evidence that large pools of public monies exist for investment in public infrastructure, with public pension funds and sovereign wealth funds being two examples. Currently, these funds are being directed toward large-scale, capital-intensive, high-return projects aimed primarily at well-off urban residents and the private sector. Lessons from the financial crisis show that such funds could actually realise greater long-term returns from investment in public service provision, the authors argue, while avoiding the politically controversial and contradictory practice of using public sector funds to support privatisation. They make the case for using public pension funds and sovereign wealth funds for socially responsible investments in the global South, in support of essential public services.
Public-Private Mix
Private external funders (donors) are growing steadily more important to global aid, contributing one-quarter of the estimated US$73.9 billion spent on emergency assistance from 2006 to 2010, according to this report. Trusts, foundations, businesses and individuals are the main sources of private funding, with non-governmental organisations (NGOs) depend on these sources for 57% of their financial support, while UN agencies depend on it for only 8%. There are also wide variations: for example, Médecins Sans Frontières (MSF) gets roughly 90% of its funding from private sources but the Norwegian Refugee Council receives only 2%. While many agencies are courting private funders, the lack of tracking creates a significant information gap in both co-ordinating and evaluating this source of funds.
South Africa’s National Health Department is courting the private sector to build public-private partnerships in the development of the country’s new National Health Insurance (NHI) system. The Department has announced that it considers the issue of improving working relations and trust between the private and public health sectors an important step towards the establishment of the NHI, calling for greater transparency and accountability. Olive Shisana of the Human Sciences Research Council (HSRC) echoed government’s position, arguing that the reluctance of the private sector to work with government on the NHI ‘fails to recognise the long-term benefits for health care’ in the country. The private sector has so far been reluctant to work with government, fearing profit losses if NHI is implemented.
The Bill and Melinda Gates Foundation has pledged US$220 million over the next five years for the search for a tuberculosis (TB) vaccine. The money will be channeled via Aeras, a non-profit organisation developing vaccines to combat TB against the backdrop of a significant increase in drug-resistant strains. A large portion of their proposed TB vaccine work will take place in South Africa, where research partners have been promised they will benefit from the grant. The grant will allow Aeras to advance several vaccine candidates into pivotal large-scale efficacy trials in South Africa and elsewhere. Aeras estimates a total of $400-500 million will be needed over the next five years to fund activities. The Gates grant will provide approximately half of the estimated cost of meeting 2012 to 2016 milestone targets.
In this book, the authors present the principal findings of a study conducted between September 2007 and March 2009 on contractual arrangements between faith-based hospitals and public health authorities in four sub-Saharan African countries: Cameroon, Tanzania, Chad and Uganda. In Tanzania, Christian faith-based organisations were found to be well represented, particularly the Catholic Church. The study focused on the Nyakahanga District Designated Hospital (NDDH), a rural Lutheran hospital located in the north-west of the country. Researchers found that monitoring of the contractual relationship between church and state is not properly done and supervision remains erratic, with frequent stock-outs and lack of capital investment, leading to a negative perception of the relationship by both parties. In Uganda, the faith-based health sector owns about 30% of the country’s health facilities. Field research for the study focused on two faith-based hospitals in Uganda that were involved in contracting agreements with PEPFAR recipients. Restrictive and demanding agreements between PEPFAR recipients and hospitals were identified as problematic, but this was mitigated by the reliability of PEPFAR funding. The authors observe that where the relationship between public and faith-based sectors is not satisfactory, faith-based organisations may opt for more predictable agreements that they can rely on with external organisations like PEPFAR.
This book assesses the achievements and limitations of a new set of non-state or multi-stakeholder institutions that are concerned with improving the social and environmental record of business, and holding corporations to account. It does so from a perspective that aims to address two limitations that often characterise this field of inquiry. First, fragmentation: articles or books typically focus on one or a handful of cases. Second, the development dimension: what does such regulation imply for developing countries in terms of well-being, empowerment and sustainability? This volume examines more than 20 initiatives or institutions associated with different regulatory and development approaches, including the business-friendly corporate social responsibility (CSR) agenda, 'corporate accountability' and 'fair trade' or social economy. Several chapters deal specifically with the mining sector in Africa.
Commercial production of Tanzania's first locally manufactured antiretroviral drugs (ARVs) will start later in 2012 and it is hoped the country will eventually provide medicines for half of all HIV-positive Tanzanians. A pharmaceutical plant has been built near the northern city of Arusha using a grant from the European Union of about US$6.6 million, as well as about $1.5 million in funding from the private sector. Co-operation with a generic licence-holder on a fixed-dose combination ARV is also being considered as this would shorten the registration period significantly. Under the World Trade Organisation's Trade-related Aspects of Intellectual Property Rights (TRIPS) agreement, low income countries like Tanzania are permitted to produce essential drugs without requiring the permission of patent holders until 2016. The plant's current capacity is designed to serve a minimum of 100,000 patients with a reserve to triple the output if required - its minimum output is 100 million tablets a year.
This author argues that Zimbabwe is ripe for private waste sanitation companies (“toilet capitalists”). In 2008, cholera swept through the country due to aging and absent water and waste sanitation systems. The author argues that private systems cannot replace public investment and that what happens in the political terrain will be critical for determining whether revenue will flow in the direction of the public good.
Transnet has launched its second health train in South Africa, the Phelophepa II, costing R82m (US$10.8). The first Phelophepa train has served more than six million in rural communities over the past 18 years. The trains, crewed by medical specialists including a number of final year students, provide primary healthcare, dental, psychological and optical services. Transnet’s rail engineering division, TRE, was responsible for the development of the new train with the Swiss-based pharmaceutical group F Hoffman La Roche a major sponsor of both trains. The trains operate from January to September every year and cover vast areas of South Africa where primary healthcare facilities are under pressure.
The World Health Organisation (WHO) is under siege by private sector forces using their financial leverage to gain undue influence in the financially beleaguered United Nations agency, according to the author. He makes this assertion from observing developments such as the presence of Microsoft Chairman Bill Gates sharing the stage with WHO Director General Margaret Chan at the World Health Assembly in 2011, in the presence of industry interests at a civil society meeting before the 2011 UN summit on non-communicable diseases or from the private-sector influence in the increasingly powerful global foundations in health. Many corporate giants are noted to have been adopted by WHO since 2010, as private sector partners working together for ‘better global health’.
The origins of this public-private sector partnership process can be traced to WHO’s chronic funding problems and in the search for extra resources, the private sector funding of foundations has become more influential. The author points to concerns of industry influence in the reform proposals of WHO and asks the question whether the Director General's actions in promoting public-private partnerships have been at odds with her speeches on defending the basic mandate of WHO to promote the public health interest on the global stage?