About PRSPs ----------- Where is health? A contribution to the PRSP review December 2001 Ellen Verheul, Wemos, the Netherlands <ellen.verheul@wemos.nl> Mike Rowson, Medact, UK <mikerowson@medact.org> INTRODUCTION Only 11% of the global health budget is spent in the low- and middle- income countries, where 84% of the global population lives. 1,1 bil- lion people do not have access to clean water. 2,4 billion people lack access to sanitation. One third of deaths in developing coun- tries are due to preventable and/or treatable conditions. Health is a fundamental human right and a prerequisite for develop- ment. Health targets are central to the International Development Targets, meant to be the overriding goals for the PRSP approach. Al- though health is often claimed to be a priority area in poverty re- duction strategies, a review of existing PRSPs shows that key con- cerns in relation to poverty and health are ignored or insufficiently addressed. In this contribution to the PRSP review process, we focus on what we feel is still missing in the PRSPs and identify areas where donors fail to support the PRSP countries. Content of strategies Missing links between poverty reduction and macroeconomic and trade policies: PRSPs reviewed show a gap between social policies and the macro- economic framework. Protection of government social expenditures is one important aspect. But equally important for health is considera- tion of how economic change influences incomes, prices and household coping strategies. This issue has been brought to the fore repeatedly over the last two decades in relation to the debt crisis of the 1980s, the problems in the transition economies in the 1990s and then in the aftermath of the Mexican and East Asian financial crises. In each case, increases in poverty (often dramatic) have followed these economic changes. The role of safety nets and other social protection instruments is often promoted as a solution to problems caused by rapid economic change. However, in view of the limited resources and coverage of most safety nets, clearly a much better solution would be to ensure that economic policies, as much as possible, do not cause harm to vulnerable population groups in the first place. Similarly, PRSPs fail to identify and challenge the hindrances that international policies may have on health or national poverty reduc- tion strategies. The international trade agreements under the WTO re- gime, like the TRIPS and GATS agreements, need to be assessed on their potential health impact before being implemented in national regulation and policies. Countries should weigh alternative macro-economic and trade policy options and their trade offs in the development of poverty reduction strategies. Ex-ante impact assessments of policy options would greatly enhance an informed dialogue and transparent and democratic decision making. PRSPs should be clear about the redistributive im- pact of the proposed policies. Limited increase health budgets: Health systems of low-income countries are generally severely under- resourced, prohibiting these countries to achieve the 2015 health targets. A growing number of countries in fact even face reversals in the decline in infant and child mortality as well as declining life expectancies. The median per capita health budget for sub-Saharan Af- rica stands at $6, only 50% of the $12 basic package. The mean for the lowest income countries in Africa is just $3 per capita. WHO es- timates that $60 per capita is needed for reasonable health care. PRSPs show in general modest commitments to increase budget alloca- tions for health services. The problem is that in these countries the national economy is simply too small to generate adequate health budgets. This is illustrated by Tanzania, which has undertaken a health costing exercise as part of the PRSP development. The techni- cal studies indicate that the financing of acceptable levels of health care would cost about $9 per head. This would mean a doubling of the present health budget, which would be still 25% below the rec- ommended $12 per capita basic package. Instead of asking for in- creased donor assistance, the government of Tanzania has decided to limit the budget. PRSPs should clearly indicate the financing gap for health, in order to challenge donors to fill this gap. Budgets should be determined on the basis of needs rather than estimations of (limited) donor re- sources. The achievement of development targets should not be compro- mised. Failure to tackle adverse impacts of user fees: There is widespread international consensus on the need to avoid user charges at the point of service delivery, because of the adverse im- pacts on the poor. It is therefore remarkable that most PRSPs con- tinue to promote user fees for health, including for basic services. Most PRSPs do not go beyond proposing exemption schemes to protect access for (categories among) the poor. In practise exemption schemes are difficult to implement and in general fail to protect many poor from being charged. User fees force patients to use all kinds of cop- ing mechanisms that are poverty-inducing, like borrowing, reducing other essential expenses, selling productive assets or delaying the use of health services. Furthermore user fees may provide incentives for health workers to over-prescribe and over-refer to higher levels of care, thereby reducing the quality of care. Governments should revisit their user fee policies in view of poverty reduction. They should develop a long term financing scheme based on risk-pooling between the sick and healthy and risk-sharing between the rich and poor. The most equitable and feasible option for low- income countries are tax-based health financing systems, supported by external aid, as recommended by WHO. Donors should refrain from im- posing the introduction or increase of user fees in developing coun- tries. 'Pro-poor' content of health policies unclear: Economic crisis and austerity measures imposed by structural adjust- ment led to plummeting health budgets in the 1980s. Governments had no choice but to withdraw from health service provision, leaving growing gaps to be filled by the profit and non-profit sector. The health sector reforms initiated in the context of structural adjust- ment have not been very successful in many countries. This is largely due to severe underfunding and underestimating the complexity of the process. While the reforms focussed strongly on financial management and organisational matters, service delivery was neglected. PRSPs seem to continue downsizing the government's role in service provision and encourage private provision. Governments with weak ca- pacities for service provision often welcome private provision, even though the costs may be higher. However, there is an inherent contra- diction in this situation, as governments with weak capacities for service provision usually have weak regulatory capacities. Privatisa- tion within an unregulated environment will foster unregulated pri- vate provision of essential services, with obvious adverse conse- quences for access for the poor. In this scenario, efficiency, qual- ity and equity goals for the health system as a whole can easily be undermined. The PRSPs reviewed also show a narrow approach to health. They de- scribe health from a target-oriented basic health and disease ap- proach, and strongly emphasise the 'diseases of the poor' - AIDS, tu- berculosis and malaria. The question is whether these priorities really reflect national priorities or merely donor wishes, with large funds being available to tackle the major communicable diseases. PRSPs should outline a long-term strategy for health sector develop- ment that will guarantee access for the poor to quality services. Countries can learn from the experiences of low-income countries that achieve good health outcomes, by providing equitable and comprehen- sive public health care at low costs, such as Sri Lanka, Jamaica and Botswana These countries have emphasised the improvement of services in the areas where most of the poor live. Prevention and medical ser- vices were combined with community action and improvement of water, sanitation, nutrition and education. Donors should finance nationally defined, integrated policies instead of linking funding to their own priorities, which often focus solely on a few 'diseases of the poor'. Constraints Insufficient aid flows: ODA fell to a historic low average of 0,23% of GDP in the nineties. About $3 billion of total ODA is spent on health in low-income coun- tries. Donor assistance to health in the least developed countries is only $2 dollar per capita per year. The WHO Commission on Macroeco- nomics and Health estimates that besides comprehensive debt relief, an extra $10-20 billion per year would be needed for disease control alone. The much trumpeted Global Health Fund, which aims to mobilise new funding for health, has only received commitments of $1.5 bil- lion. Much of this money however is coming from existing ODA budgets. Insufficient grant flows increase low-income countries' reliance on loans to finance the health sector. This is problematic for highly indebted countries, since health services in themselves will not de- liver the foreign currency needed for debt repayments. The global economic downturn, deepening after September 11, will only further diminish the economic prospects of countries with weak economies. Av- erage per capita incomes in Africa have not risen since 1970. Rich countries should set a timeframe to achieve the minimum ODA level of 0,7% GDP. ODA should be given in the form of untied grants to implement the national poverty reduction strategies. Resources for the health sector should flow through nationally defined strategies. The creation of new parallel aid mechanisms, such as the Global Health Fund, should be avoided. Insufficient debt relief and creditors not accountable for own mis- takes: It is widely acknowledged that the HIPC Initiative fails to offer a way out of the debt crisis. Many countries in sub-Sahara Africa are still repaying their creditors more than twice the budget available for health. Debt sustainability criteria that do not reflect coun- tries development needs. In addition, HIPC does not offer a solution for the debt accrued for failing programmes and projects. While the World Bank is the single largest financier of health in developing countries, the Bank admits a weak knowledge base for pro-poor health interventions. The Bank's performance record in health is weak ac- cording to its own evaluation department. Less than half of all HNP projects were sustainable after completion. Only 21% of the projects made substantial contributions to institutional development and pol- icy change in the sector. As a result, the population in the recipi- ent countries suffers from the consequences of the debts repayments for projects that do not contribute to improvement of health service delivery. There is an urgent need for broader and deeper debt relief beyond the current HIPC initiative, to prevent the outflow of resources that countries need for reaching the development goals. Debt sustainabil- ity criteria should be based on development needs. Decision making on debt relief needs to be shifted to a transparent and independent ar- bitration system. Creditors should be held accountable for their mis- takes and cancel debts accrued for failing projects. Not bridging the gap between health and macro-economic policies: The Bank and the Fund have so far failed to assess the social and poverty impact of the macro-economic framework of their programmes, despite acknowledging at the launch of the PRSP approach that 'pov- erty and social impact analyses of the policy measures underpinning poverty reduction strategies are critical to ensuring that the poten- tial effects on the poor and vulnerable groups are taken into account in programme design'. The World Bank has only recently started with pilots in six countries. Specialised UN agencies like the World Health Organisation should provide independent support to governments for assessing the poten- tial impact of economic and trade policies on equity and health. Monitoring the implications of structural adjustment measures for health falls within in the mandate of the WHO. Incoherent donor policies: Donors should respect and support nationally developed strategies. This is not only relevant to PRCS and PRGF credits, which are in the- ory linked to the PRSP, but should apply for all Bank/Fund supported programmes and strategies. This is not the case. The draft Private Sector Development strategy of the World Bank for example envisages an increasing role for (profit and non-profit) private sector provi- sion of basic social services. Commercial health care provision how- ever will not lead to improved access to the poor, especially in un- regulated environments. The Bank's strategy would undermine govern- ment efforts to build universal public health systems in the context of poverty reduction. The Bank is in fact a significant driving force for privatisation in health care, through projects, investments and institutional support for multinationals. IFC is explicit about its objective to move 'aggressively' to invest in sectors such as health care. The question is what happens if countries choose not to priva- tise health care provision in their PRSP. The World Bank and IMF should respect national strategies in all their programmes and conditions. Furthermore the Bank and Fund should adhere to the international body of human rights law. The human rights framework should be the basis for all policies, programmes and projects. Countries should resist accepting reforms and conditions that force them to breach their obligations towards the rights of their own populations. These rights include the right to development, participation, non-discrimination and the right to health and educa- tion. -- Claudio Schuftan mailto:aviva@netnam.vn -- To send a message to AFRO-NETS, write to: afro-nets@usa.healthnet.org To subscribe or unsubscribe, write to: majordomo@usa.healthnet.org in the body of the message type: subscribe afro-nets OR unsubscribe afro-nets To contact a person, send a message to: owner-afro-nets@usa.healthnet.org