Global Health Aid: What’s Ahead?

1. Global Health Aid:What’s Ahead? David de Ferranti

2. Outline • Health aid and its architecture: where are we headed? • Will health aid do a better job of strengthening country institutional settings?

3. Why East Asia countries might care aboutwhat is happening in global health aid • Aid and “the aid dialogue” are a source of: • Financial support • Ideas • Experience from other parts of the world • Initiatives and advocacy – on new priorities • And these can have implications for countries • Help or hinder local efforts • Absorptive capacity concerns • Fragmentation, efficiency, other

4. Health aid has increased … and shifting to recurrent cost financing for communicable disease control Source: Lane and Glassman 2007

5. Official Development Assistance Product (RED) Debt Buy-back Global Health Partnerships Airline Tax Bilateral Agencies UN Agencies ( WHO & others) Global Fund AMC UNITAID Buy-downs, co-financing GAVI IFFIm Private Capital Health Service Delivery Public Health & Community Health Health Financing Individual Preventive Public Health Interventions Data, Health Education, Environmental Health Other Gov. Health Strategy Public Providers Ministry of Health Social Security Ministry Finance POPULATION Individual Health Interventions, Acute & Chronic Care Private Payments Public Providers Private Providers Out-of-Pocket Payments Insurance … and has gotten more complicated! International Philanthropy Multilateral Banks

6. Volatilty  unpredictable funding levels

7. Changes are afoot • The new players are still expanding. And changing. • Gates and other new philanthropies • Global Fund, GAVI, and other disease-focused initiatives • Others (Media stars, wealthy individuals, the BRICs, …) • The traditional players are trying new ideas • European bilaterals (DfID, France, Nordics, …) • US assistance (USAID, MCC, State, PEPFAR, etc.) • World Bank and regional multilaterals • BINGOs, LNGOs, FBOs, private health providers • Other (IMF, overall aid strategies, recipient governments) • The global environment is worsening • US economy and “the crisis from the north”

8. X years from now … • How will today’s tensions have evolved? • Vertical programs vs. health systems • Country-driven vs. donor-driven • Performance-based vs. input-focused • General support vs. project-oriented • Public vs. private roles in health • The trans-Atlantic divide • How will tomorrow’s trends have unfolded? • Epidemics and pandemics – old and new • New products, technology, and financial tools

9. X years from now … (continued) • Will the global health architecture have changed radically? • By default rather than by design? • Will support (public, political) for aid have weakened? • Impact of new generations of voters? Is a funding “cliff” coming? • Will the new players have achieved results? • Or changed the debate? • Or foundered on unrealistic expectations? • Or changed their own views of what is needed and what works? • Will the traditional players have changed? • Will aid be just IDA-type funding plus IFC-type support? • Will there be enough money to meet the priority needs?

10. The Great “Money Gap” Debate • UNAIDS says $55.1 bn is needed for 2006 - 2008 for HIV/AIDS • Funding gap: $6 bn in 2006 and $8.1 bn in 2007 1 • GAVI: $35 bn to immunize 27 mn children by 2015 • Funding gap: $11-15 bn 2 • StopTB: $56.1 bn over 10 years • Funding gap: $30.8 bn 3 • Maternal and Neonatal Health and Child Survival: $9 - 16 bn/yr • Funding gap: $5 bn/yr • Roll Back Malaria: $3.4 bn/yr • Funding gap: $2.7 bn/yr 4 1Report on the Global Aids Epidemic. Geneva: Joint United Nations Programme on HIV/AIDS, 2006. 2 Albright, Alice. "Innovative Financing for Global Health." The Brookings Institution, Washington. 26 July 2006. Lob-Levyt, Julian. "Progress & Phase 2." 3rd GAVI Partners' Meeting, New Delhi. 8 December 2006. 3Stop TB Partnership. Actions for Life: The Global Plan to Stop TB 2006-2015. Geneva: World Health Organization, 2006. 4 WHO. "Who | Malaria". Geneva, 2006. World Health Organization. <http://www.who.int/mediacentre/events/2006/g8summit/malaria/en/index.html>.

11. The Great “Money Gap” Debate (continued) • Adding it all up: • From World Bank for health-related MDG gap • $25 - 70 bn/yr (0.08 – 0.21% of global GDP) • From Commission on Macroeconomics and Health, WHO: • $40 - 52 bn/yr (0.08 – 0.12% of GDP) • From summing selected disease/intervention-specific estimates: $30 - 50 bn/yr (0.10 – 0.15% of GDP) • From Copenhagen consensus estimate of WDR 1993 package $337 bn/yr (1% of GDP)

12. The Great “Money Gap” Debate (concluded) • $25 to $50 bn/yr is small compared to: • Total health spending worldwide: $3,198 bn/yr1 • Global military spending: $1,118 bn in 20052 • Global corporate net profits: Exxon/Mobile alone earned $36 bn in 2005 • Total capital in global financial markets: $118,000 bn(a stock, not a flow)3 • But large compared to: • Total current development aid for health: over $11.4 bn/yr (IMF/WB, 2004) • Total current ODA for all purposes: $80 bn/yr (OECD, 2004) • Total current health spending in recipient countries: $350 bn/yr1 • And would be needed for a very long time • So …this is too big to solve by aid and philanthropy alone 1 Gottret, P. and George Schieber. 2006. Health Financing Revisited: A Practitioner’s Guide. Washington, DC: IBRD/World Bank. 2 Stockholm International Peace Research Institute, 2006 3 McKinsey Global Institute, 2005

13. Strengthening Country Institutional Settings • What is it? • Strengthening institutions such as • Laws and regulatory regime • Health workforce talent pool and incentives • Management systems • Transparency, governance • Similar to “enabling environment” and “investment climate” concepts in macro policy? • Not the same as: • Capacity building • Traditional technical assistance

14. Prospects for Improving Aid EffectivenessAnd Its Impact on Country Institutional Settings • What to expect from the new initiatives that promote: • Greater strategic coherence (IHP++, etc.) • Harmonization and alignment (Paris, Rome, etc.) • Results-based aid (Norway, etc.) • Pooling of aid (budget support, SWAps, etc.) • Better use of traditional tools (e.g., technical assistance) • Strengthening health systems • And from new efforts to: • Strengthen incentives and institutions • Attack demand and supply side constraints simultaneously

15. Why East Asia countries might care aboutwhat is happening in global health aid:REVISITED • Aid and “the aid dialogue” are a source of: • Financial support: RECENT INCREASES COULD BE IMPORTANT FOR A FEW COUNTRIES BUT NOT FOR MANY. RISKS OF FUTURE DECLINES? • Ideas: MUCH FERMENT. HOW USEFUL??? • Experience from other parts of the world: A LOT TO LEARN FROM NOW. MORE COMING. • Initiatives and advocacy – on new priorities: MANY NEW EFFORTS. THEIR VALUE STILL UNCLEAR

16. Why East Asia countries might care aboutwhat is happening in global health aid:REVISITED (continued) • And these can have implications for countries • Help or hinder local efforts: • CHOOSE CAREFULLY – WHICH GLOBAL INITIATIVESTO PARTICIPATE IN AND WHICH NOT. • Absorptive capacity, fragmentation, efficiency, other: • PUSH BACK – TAKE CHARGE – WHEN DEALING WITH DONORS. MAKE “COUNTRY-DRIVEN” A REALITY. • EVEN WITH THE WORLD BANK!

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18. Other Money Problems Within Countries Source: WHO National Health Accounts, updated 2002.

19. Global Health Spending Global Disease Burden Low- and Middle-Income Countries Low- and Middle-Income Countries High-Income Countries High-Income Countries Source: Gottret, P. and G. Schieber. 2006. “Health Financing Revisited.” World Bank.

20. Volatile revenue flows Average absolute percentage deviation from trend 1996-2005 US$ per capita data for 59 countries. Excludes micro states, countries where health aid < 10 percent of govt. spending. Source WHO. Trend: Hodrick-Prescott filter; Source: Lane and Glassman 2007

21. Options for Change • Accelerate efforts to … • Help countries move toward stronger health systems • Based on more effective built-in incentives for better performance • Develop powerful new interventions • Cost-effective vaccines, programs, financing strategies, etc. • Improve uptake of existing interventions (new or neglected) • Requires focus on country health systems • Get more impact from • Success stories – from innovative country programs • Bridging divides between leaders and ideas • Evaluation of experience • Press key players (WB, WHO) to do better • New initiatives should add value • New initiatives should be active constituents holding main players accountable, not competitors

22. Four inter-linked initiatives • Project on Innovative Financing • IFFIm, airline tax, advance market commitment • Private sector: their role and investment • Task Force on Health Financing • Mary Robinson, Julio Frenk, Ngozi Okonjo, etc. • Within-country and aid-flow issues • Programs on Improving Implementation • Focus on governance, corruption, transparency, accountability • Private sector risk-pooling in Africa • Dutch government support

23. Country Health Aid and Spending Volatility 96-05 Developing countries that experience high aid volatility tend to be those that are most dependent on aid and aid dependency is growing • High/Low Threshold: 12 percent avg. deviation from trend. Typical health aid dependent country Post conflict & other fragile states