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How IMF policies block the Global Fund

Maputo, Dec (by Gorik Ooms*) - “It is very genocidal for one part of the world to have the cure for the AIDS disease while millions of people in another part are dying from the same. The developed world is challenged to make antiretroviral drugs available”, declared Uganda’s President Museveni (New Vision, 11 Dec 02).

But only weeks before this declaration, Uganda’s Ministry of Finance made it virtually impossible for the Ministry of Health to accept a grant from the Global Fund to fight AIDS, TB and Malaria, a grant that could help to make antiretroviral drugs available. “Any new donor monies absorbed into a government sector must be accompanied by a similar reduction within the sector in order to keep the expenditure limit,” said Francis Tumuheirwe, director of budget in Uganda’s ministry of finance (The Lancet, 7 Dec 02).

In other words, if Uganda gets the $ 52 million it asked from the Global Fund, it will simply reduce its own contribution to the health budget, which will remain the same, with or without Global Fund monies. Obviously, the Global Fund will never accept this, since it can only give money for additional activities, not to replace Uganda’s contribution to a fixed health budget.

The solution proposed by Uganda’s Ministry of Finance - to cut into other parts of the health budget to “make way” for the interventions approved by the Global Fund - is clearly not acceptable.

For, this means that President Museveni can call for as much international financial support for antiretroviral therapy as he wants: as long as his own Ministry of Finance is firmly committed to a public health budget that doesn’t exceed $ 9 per person per year, “no matter how much donors are willing to provide”, the inaccessibility of antiretroviral therapy - described as a ‘genocide’ by the President himself - will continue. It makes you wonder who the real decision-maker in Uganda is; the President or the Minister of Finance? Or is it someone working for the IMF?

Like Uganda, Mozambique has a public health budget of $ 9 per person per year.  Like Uganda, Mozambique wants to provide antiretroviral therapy to the people who need it. Like Uganda, Mozambique is counting very much on the Global Fund to keep its people alive. Mozambique and Uganda have poor public health budgets not only because they are poor countries, but also because they have accepted - or, at least in the case of Mozambique, was obliged - to adopt the IMF and World Bank economic and development doctrine, in the form of a Structural Adjustment Program (or SAP.)

This doctrine is quite simple: it is based on the assumption that real development and economic growth can only occur when governments limit public spending to a percentage of their gross domestic product. In very poor countries, this has resulted in ridiculously low public health and education budgets. Less than 50% of children of school age attend school in Mozambique, less than 50% of the population has access to poor public health services.

But this would be just a temporary problem, assured the IMF and the World Bank.  Soon there will be economic growth, they promised. Economic growth will increase state budgets for public social services, and many people will become rich enough to buy private social services. Very conveniently, this doctrine provided an excellent excuse for reducing international aid. It was not only permitted to give less, rich countries were actually doing poor countries a favour by giving less (and thus stimulating their economic growth).

In the ‘90s, international aid levels dropped dramatically. Fifteen years later, the ‘temporary problem’ has been solved for less than 3% of Mozambicans. They can afford private schools and private clinics; 47% have access to poor public services, badly equipped and run by underpaid civil servants. The other 50% don’t send their children to school and don’t go to health centers.

IMF and World Bank no longer promote SAPs, they invented a new game and called it ‘poverty reduction.’ In theory, Poverty Reduction Strategic Papers (or PRSPs) are meant to ensure that the benefits of debt cancellation are invested directly in poverty reduction. In reality, they just protect the core of the old SAPs, ensuring that public spending remains capped. While HIV infects more and more Africans, the IMF and the World Bank ensure that African countries are not able to provide enough education to their children to protect them against HIV, let alone provide lifesaving treatment.

When African leaders, gathered in Abuja in April 2001, promised to substantially increase their public health budgets, I wondered if they realized they were defying IMF and World Bank policies. I felt relieved when I read the ‘Declaration of Commitment on HIV/AIDS’ that came out of the UNGASS meeting in June 2001. The international community was actually supporting increased public spending to fight AIDS and other infectious diseases! The fulfilment of this commitment would require improved health and education services!

Then came the report of the WHO Commission on Macroeconomics and Health; an implicit but clear condemnation of IMF and World Bank policies, arguing that increased spending on health would not harm but rather stimulate economic growth. When the Global Fund announced its first approved proposals in April 2002, I was saddened that the Mozambican proposal was not included, but satisfied to see that similarly poor countries would receive substantial amounts, amounts that would obviously make their health budgets break through the ceilings foreseen in their respective PRSPs.

I should have been completely convinced when the World Bank Multi-sectoral AIDS Plan (MAP) team visited Mozambique for the third or the fourth time in October 2002, announcing that the MAP would be funded with a grant, not a loan, and that the World Bank had secured $ 1 billion for several MAPs.

Surely, if this $1 billion went to the countries that need it most, it would lift their budgets well over the PRSP ceilings. Surely, if the World Bank supports such a strategy, the IMF would not challenge it. The door was open for a rights-based approach to health care and education.

Suspicious as I am, I questioned the World Bank MAP team about this. Did their macroeconomists agree with this? Because if not, that $1 billion was useless, it would only replace national contributions or contributions from other donors, but not increase the budgets. The answers were vague and evasive. One said that PRSP budgets were targets, not ceilings. The other admitted that there might be a problem.

I guess we have the real answer now. No matter how much donors are willing to provide, no matter how much the Global Fund is willing to provide, Uganda will not increase its health budget and therefore it will not provide anti-retroviral therapy (unless President Museveni has the courage to intervene directly.) The arguments used by Uganda’s Ministry of Finance are pure IMF doctrine arguments: increasing the health budget with the Global Fund grant would destabilize Uganda’s economy, the way to increase expenditure on health is through sustained economic growth, Uganda must reduce its dependence on donors. This is probably why the chairwoman of the parliamentary committee on social services wondered whether the ministry of finance or the IMF was the architect of the low ceiling.

Does it really matter? Does it really matter if the decision to sacrifice thousands of people living with AIDS on the altar of a development doctrine that has proven to be ineffective came from an office in Washington or from an office in Kampala? Does it really matter if the South African form of structural adjustment - GEAR - was voluntarily adopted by President Mbeki, strongly encouraged by the IMF and the World Bank or even imposed by them?

It doesn’t make any difference to South Africans, many of whom died of cholera in October 2000 because they suddenly had to pay for water and couldn’t; they don’t get antiretroviral treatment when they need it because of ‘financial discipline’ in a vain pursuit of economic growth. Does it really matter if NEPAD - the New Partnership for African Development that hardly mentions AIDS at all, let alone AIDS treatment - is the fruit of African Renaissance or the result of 20 years of indoctrination by Washington-based macroeconomists?

The result is the same: poor health care and poor education for poor people.

I believe the Global Fund has met its worst enemy in Kampala. Raising the funds needed to fight AIDS, TB and Malaria remains important, but it is not enough. It must also promote a rights-based approach to social services, one that legitimises public budgets that are in accordance with real needs, not limited to a percentage of gross domestic product. Otherwise the Global Fund will end up channelling funds to relatively well-performing countries only, while refusing agreements with the countries that really need it, because their budgets are capped and Global Fund money would only replace national contributions or contributions from other donors and would not create additional services.

Both objectives, to raise more money and to create a climate that allows spending it where it is needed most, go hand in hand. Both require a new development vision. Both require a genuine understanding that only a healthy and well-educated population can create real and sustainable economic growth. Both require a genuine understanding that access to treatment is a human right! - SUNS5260

[* The author, Gorik Ooms is a Mozambique-based health activist. This is taken with acknowledgement from the list-server, ‘Stop the IMF’]

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