WHO shackled: Donor control of the World Health Organisation

Since the 1990s, concern has grown that the integrity and independence of the World Health Organisation (WHO) may be compromised as a result of corporate influence. When in May, the World Health Assembly - the supreme decision-making body of WHO - met in Geneva, much of the debate centred on the funding of WHO and the rules regarding this UN agency's relationship with the private sector. David Legge analyses the debate and explains the issues involved.

THE rise of the transnational corporation (TNC) as the leading agent of global governance is widely mooted. Tensions between the TNC and the nation state were on display at the recent World Health Assembly - the supreme decision-making body of the World Health Organisation (WHO) - in Geneva in May. The debates over the funding of WHO and the rules regarding WHO's relationships with the private sector provide useful case studies for examining these apparent contradictions. The underlying forces can be mapped by exploring the links between four particular agenda items.

The first of these concerned the Ebola outbreak in West Africa. It is common knowledge that WHO was slow to respond to the outbreak, although the apportionment of blame between WHO headquarters, the regional office and the country offices is debated. It is also recognised that the outbreak could have been contained and perhaps prevented if the health systems in the affected countries had been stronger and more resilient. Finally, the Ebola outbreak also reflected influences beyond the health sector including poverty, land grabbing and corporate tax avoidance. WHO has a clear mandate to assist countries in health system strengthening and in addressing the social (including economic and political) determinants of health and can be criticised for its failures in these areas as well as its tardy response.

The recent World Health Assembly discussed the interim report of an expert advisory panel commissioned to review WHO's response to Ebola. The Assembly also considered new proposals for a contingency fund to deal with the early weeks of an emergency; an emergency health workforce capability; and a new centralised command for WHO's emergency response.

WHO's failures in preventing and responding to the outbreak reflect a range of different factors, one of which is the chronic financial crisis of WHO. The expert panel speaks of a 'lack of political and financial commitment of [WHO's] member states':

'The Ebola outbreak might have looked very different had the same political will and significant resources that were spent in responding to it been made available to Member States and the WHO Secretariat over the past five years in order to support three key areas of action: ensuring global health preparedness at country level in implementing the International Health Regulations (2005); supporting countries to establish or strengthen primary health care systems; and developing diagnostics, vaccines, and medicines for neglected tropical diseases.'

The second agenda item was the consideration of WHO's proposed biennial budget for 2016-17. In circulating the proposed budget in late April, WHO Director-General (DG) Margaret Chan had proposed a 5% increase in assessed contributions (ACs, the mandatory contributions required of member states based on population and GDP). While 5% is a relatively small increment, much less than what the big donors contribute as voluntary contributions, it would be of huge symbolic value and a crucial step towards thawing the freeze on ACs.

From the early 1990s WHO's member states have imposed a 'zero nominal growth' policy regarding ACs. Under this regime the proportion of WHO's expenditure budget which is funded by ACs has fallen from 80% of total expenditure (in the 1970s) to less than 20% now. The shortfall has been made up by voluntary contributions (VCs) from member states, global philanthropies (such as the Gates Foundation), the World Bank, the United Nations Development Programme (UNDP) and other intergovernmental organisations and various private sector entities.

Voluntary contributions now fund around 82% of WHO's expenditure; around 93% of donor funding is tightly earmarked to specific programme areas. Control of 80% of WHO's budget has thus moved from the Assembly of member states to the big donors, meeting annually with the WHO secretariat in a 'financing dialogue'. It is essentially an auction of WHO's programmes and activities.

The DG's proposal for a 5% increase in the level of assessed contributions was withdrawn before the Assembly (because of negative feedback from 'many' member states) but the Assembly did agree to an 8% increase in the budget ceiling, to be funded entirely through an (anticipated) increase in voluntary contributions. Whether the donors will be willing to provide such an increase and how much might be untied will become known during the financing dialogue in November.

The third agenda item, where the dynamics underlying WHO's funding crisis were on display, concerned the organisation's relationships with 'non-state actors' including academics, NGOs, philanthropies and private sector entities. The intensity of debate around this item led to a new acronym being coined, FENSA, referring to WHO's proposed 'framework of engagement with non-state actors'.

The debate during the Assembly focused largely on WHO's engagement with corporations and associated organisations (in particular business associations and corporate 'front organisations'). Most of the debate took place in the privacy of a formal 'drafting group' but the parameters of the debate were clearly exposed in the sequence of draft resolutions which were submitted to and emerged from the drafting group. It is standard practice in such negotiations to flag the issues which are not resolved with square brackets, and after a week of negotiations in the drafting group, the draft resolution remained peppered with square brackets, most of which point to member states' concerns regarding WHO's engagement with private sector entities. The following provisions are still in square brackets:

* 'WHO does not accept secondments from private sector entities. Secondments from other types of non-state actors shall be accepted, in accordance with [resolution] WHA67/7.'

* 'The WHO should establish ceiling in the voluntary contribution from non-state actors. Any contribution beyond that amount should go to the core voluntary fund which gives enough freedom to the Secretariat to allocate resources to underfunded programmes.'

* 'Funds may be accepted from private sector entities whose business is unrelated to that of WHO, provided they are not engaged in any activity [or affiliated with any entity] that is incompatible with WHO's mandate and work.'

* 'Funds designated to support the salary of specific staff members or posts (including short-term consultants) may not be accepted from private sector entities.'

* 'Individuals working for interested private sector entities are excluded from participating in expert groups; however, expert groups need to be able, where appropriate, to conduct hearings with such individuals in order to access their knowledge.'

The fourth issue which contributes to this emerging picture arose at the meeting of WHO's Executive Board after the Assembly (27-28 May). This involved a complaint lodged by Italy (apparently on behalf of the European sugar industry) in relation to a proposed dietary guideline regarding sugar intake. WHO's guidelines committee had reiterated a firm guideline to the effect that free sugar should constitute no more than 10% of daily energy intake but included also a conditional (tentative) guideline which would limit free sugar to less than 5% of daily energy intake. The sugar, confectionery and beverage industries expressed their strong opposition to the 5% figure publicly and no doubt privately as well.

The Italian initiative was explicitly linked to the sugar guideline and sought to open up WHO's guideline protocols to allow for greater input by 'stakeholders' such as the sugar and confectionery industries. The proposal received very little support at the Executive Board. Several member states emphasised the importance of guidelines development being protected from interference by either member states or industry stakeholders.

Joining the dots

Four vignettes from the recent meetings of the World Health Assembly and WHO's Executive Board have been reviewed:

* the underfunding of WHO reflected in the failures in WHO's response to the Ebola outbreak;

* the refusal of the Assembly to countenance a small but symbolic increase in assessed contributions;

* the conflict among the member states as to whether to impose additional restrictions on WHO's engagement with private sector entities, over and above those governing relationships with academics, NGOs and philanthropies;

* the Italian intervention at the Executive Board, apparently on behalf of the sugar, confectionery and beverage industries, seeking to weaken the integrity of WHO's guidelines process.

There is a clear contradiction between the first and second of these vignettes. In the face of overwhelming evidence of the damaging impact of the freeze, why does the Assembly refuse a small increase in ACs? The logic of imposing additional restrictions on private sector entities makes perfect sense in the light of the sugar guidelines controversy but it is not so clear what the sugar guidelines and the debate over FENSA have to do with the funding crisis.

'Joining the dots' to make sense of these four episodes requires further elaboration of four propositions:

* WHO is grossly underfunded;

* The lack of support for unfreezing ACs reflects a mix of contradictory motivations;

* WHO's dependence on (tightly earmarked) voluntary contributions transfers governance authority from the Assembly to the donors;

* WHO's relationship with global corporations lies at the heart of the crisis.

WHO is grossly underfunded

WHO is grossly underfunded in relation to its constitutional mandate and the work programme commissioned by resolutions of the World Health Assembly. The scale of underfunding can be estimated by considering separately the main 'segments' of WHO's work and comparing WHO expenditure in these areas with other organisations working in similar areas. The 'segments' which are used by WHO for budget building include: country-level technical cooperation; the provision of global and regional public goods; and emergency preparedness and response.

WHO spends around a quarter of its funding on country-level technical cooperation - about $500 million per year. This may be compared with the Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM) which spends $3.6 billion per year on country-level technical cooperation and support - for three diseases only! There are countless areas where WHO has been commissioned by its Assembly to provide country-level technical cooperation and support, including: health systems development; decision making around immunisation; the rational use of medicines (including antibiotics); advice on the health implications of trade agreements; and many more. There are no technical (epidemiological or economic) reasons why the provision of these kinds of technical cooperation should be so underfunded in comparison to the funding provided to support the treatment and prevention of AIDS, tuberculosis and malaria.

WHO spends around a third of its budget ($700 million in 2013) on the 'provision of global and regional public goods' including guidelines, strategies, policies, standards, education, etc. This may be compared with the US Centers for Disease Control and Prevention (CDC) which spends $5 billion per year on providing global and regional public goods for only 320 million people ($15 per US resident). WHO is the CDC for the lower-income countries - perhaps 2 billion people. On this basis, the spending on people in the lower-income countries is only 35 per person.

WHO spends, on average, one-fifth of its budget ($400 million per year in 2013) on emergency response including outbreak and crisis response. This may be compared with the spending of Medecins Sans Frontieres (MSF) which spent around $1.2 billion during the same period, or the International Committee of the Red Cross (ICRC) which spent $1.5 billion on comparable programmes in 2014.

WHO is grossly underfunded. The shortfalls in the Ebola response are only the most recent illustrations of this.

Lack of support for unfreezing ACs

The WHO secretariat paper dated 30 April proposing a draft budget for 2016-17 was accompanied by a memo from the DG which (in the original version) noted that the total proposed represented an increase of 8% in total expenditure and proposed a 5% increase in ACs as part of the additional revenue required.

However, in its report to the Assembly, WHO's Programmes, Budget and Administration Committee (which met before the Assembly) advised that after preliminary feedback to her proposal the DG had withdrawn her suggestion of a 5% increase in ACs. Informed sources advise that opposition to the increase was led by the UK and Belgium.

The debate around the adoption of the 2016-17 budget provided an opportunity for a wider range of member states (MS) to express their views on both the continuing freeze on ACs and the proposed 8% increase in the budget ceiling.

Nineteen of the 37 MS who spoke in this debate made no reference to the mooted 5% increase in ACs. Seven countries were either in favour of increasing ACs or at least acknowledged that there was a case for such an increase. However, several commented that the proposal had been floated too late to allow for appropriate consultations and approvals. Norway, Brazil, Argentina and Zimbabwe spoke in favour of increasing ACs at some stage in the future.

Ten countries spoke of their continued support for 'zero nominal growth' in ACs (Mexico, Russia, the Netherlands, Canada, Thailand, Venezuela, the UK, Denmark, Italy, Spain). Most of the rich countries in this group either (initially) opposed the 8% increase or accepted it with reservations.

Of the 37 countries who spoke in this debate, 30 supported the 8% increase in the budget ceiling. Five countries agreed (Italy, Spain, Russia, Monaco and Germany) but with reservations regarding transparency, efficiency, etc. Three of the countries which agreed expressed a different set of concerns regarding the tight earmarking of VCs and the associated restrictions on budget flexibility (the Maldives, Thailand and Switzerland).

Four countries opposed the 8% increase in the budget ceiling (the UK, Denmark, the Netherlands and Mexico) although the latter three indicated that they would bow to the emerging consensus in support of the increase.

It is evident that many delegates from low- and middle-income countries (L&MICs) are apprehensive about arguing for an increase in ACs because of the potential burden on their domestic budgets and the need to persuade their governments and ministries of finance to agree to such a position. Several delegates in the above debate emphasised the lead time needed to work through such a commitment at the domestic level.

For low-income countries which depend heavily on development assistance for healthcare, it might seem dangerous to be seen to be advocating for contributing more to WHO. Bilateral donors such as the UK, the US or the Gates Foundation could well take the view that if domestic resources are available to contribute more to WHO, then perhaps the need for development assistance is less pressing than it might have seemed.

There is also a certain sense of disillusionment with WHO in some middle-income country delegations; a sense that the weaknesses are too entrenched and the obstacles to change too powerful to justify arguing for an increased allocation of limited domestic tax revenues to WHO.

Opposition among the rich countries to increasing ACs reflects a different dynamic. It is not due to an unwillingness to contribute to global health. The imposition of the zero nominal growth policy with respect to ACs has been associated with a progressive increase in voluntary contributions, from around $60 million in 1974 to $600 million in 1994 to $2 billion in 2014.

However, most of the ballooning VCs are tightly earmarked to the programmes the donors want to fund (93% in 2014). Only 17 MS contributed untied funds in 2014 and only six of these contributed more than 50% of their VCs as untied funds (Belgium, Denmark, Finland, Ireland, Luxembourg and Sweden).

The donors have not argued that WHO is adequately funded in relation to the global health challenges it faces. Neither have they denied the inefficiencies, perverse incentives and transaction costs associated with the huge imbalance between ACs and VCs. The so-called 'financing dialogue' alone represents a huge burden on the senior management of the organisation. The defence of the freeze has been based instead on continuing criticism of WHO's administration for inefficiency and lack of transparency. The implication is that it would be irresponsible to increase the flexibility of funding while the organisation is so inefficient. The comments of the Netherlands delegate to the debate regarding the programme budget for 2016-17 during the recent Assembly illustrate this discourse:

'The Netherlands has a zero nominal growth policy for UN organisations as we believe zero nominal growth is an effective instrument for efficiency gains and setting priorities by the UN. Increasing budget space will not encourage organisations to increase efficiency. Related to WHO specifically, the Netherlands is concerned about a number of budget related issues, namely the AC/VC balance, the need for further efficiency gains, the increase of the reserves of WHO and especially the insufficient internal controls . . These are risks to budget increases and the Netherlands therefore believes this is not the time for a budget increase until these issues are resolved. . We still see possibilities for efficiency gains and further reprioritisation in the work of WHO and we wonder whether it is really necessary to have an increase of budget space of 8%. . The Netherlands would like to use the strongest words possible by stating that any budget increase is ambitious and it will come with great responsibilities.'

The notion that the freeze on assessed contributions should remain in place until WHO addresses its inefficiencies flies in the face of clear evidence that these inefficiencies are in large part a function of WHO's financial crisis brought on by the freeze. One of the worst effects of donor dependence on efficiency is the way it drives competition between different units of the WHO secretariat for the attention of the donors and the barriers to collaboration within the secretariat that this competition engenders.

In response to the ongoing criticism of WHO's administration, the Director-General launched an ambitious reform programme in 2010 involving programmatic, management and governance reforms. Within the limits imposed by the freeze, and the dysfunctional regional structures of WHO, the reform programme has demonstrated significant improvements in transparency, budgeting, evaluation, harmonisation and alignment across the regions and other key reform objectives.

However, according to the UK, the Netherlands, Denmark and Mexico, the freeze on ACs and the ceiling on total expenditure should both remain in place. The $155 million which the UK gave to WHO in VCs in 2014 affords it significant leverage in relation to such matters. The Netherlands, Denmark and Mexico gave $24 million, $9 million and $1 million respectively.

Dependence on (tightly earmarked) voluntary contributions

Over 80% of WHO's expenditure is funded through voluntary donations and the bulk of voluntary contributions are tightly earmarked (see table).

The combination of the vanishing ACs and the tight earmarking of VCs has had the effect of transferring control of WHO's workplan from the Assembly to the donors.

In 2014 ACs funded only 18% of total expenditure. Since the DG has taken the view that governance and management should not be subject to auction, ACs therefore go entirely to supporting governance and management, which means that WHO's programmes depend entirely on VCs and are consequently totally dependent on donor preferences.

In 2014 the funding gap (the gap between budgeted expenditure and available revenue) was greatest for the programmes dealing with: gender, equity and human rights mainstreaming; integrated people-centred health services; non-communicable diseases; and food safety. It appears that these are areas that the donors were less enthusiastic about. It matters not that these are also areas which have been prioritised by the majority of MS in Assembly resolutions.

WHO's relationship with global corporations

Many of the threats to health and barriers to affordable healthcare arise from the commercial interests of big corporations. The increasing incidence of obesity, diabetes, heart disease and stroke due to intensively marketed cheap ultra-processed foods is a stark example. Pharmaceutical corporations clearly value shareholders' demand for profits over affordable access to essential medicines and vaccines.

While the rich-country donors have not acknowledged that they maintain the zero nominal growth policy in order to control WHO's effective workplan and prevent it from taking actions which might run counter to the interests of their industries and corporations, the sugar guidelines intervention suggests otherwise.

In fact the sugar incident in 2015 was only the most recent of cases where MS have sought to undermine the mandate of WHO in support of 'their corporations'. There have been numerous episodes involving tensions between the objectives of World Health Assembly resolutions and the interests of various corporations and industries (in particular, the pharmaceutical industry).

The fact that the interests of the corporations are generally advanced by particular member states complicates the project of devising protocols to protect WHO from 'conflicts of interest'. Rich member states, the US in particular, have repeatedly opposed WHO taking any action which might run counter to the interests of transnational corporations. The US opposed the Code on the Marketing of Breastmilk Substitutes; opposed WHO's rational use of medicines initiative and its ethical criteria for drug marketing; and has still not joined the Framework Convention on Tobacco Control.

Furthermore rich member states are seeking to force WHO to open up its policy-making and decision-making spaces to the TNCs. One of the key slogans in this project is the Orwellian concept of 'multi-stakeholder partnerships', which designate, for example, junk food manufacturers as partners in the task of addressing obesity, heart disease and stroke.

At stake in the ongoing debates over the freeze on ACs is the power of the donors to refuse funding for WHO programmes which might cut across corporate interests, no matter that such programmes have been fully authorised by the World Health Assembly. At stake in the ongoing debates around the rules governing corporate influence over decision making in WHO is the determination of certain rich countries to clear the way for TNCs to buy influence and insert corporate staff into strategic positions within the WHO secretariat.

The debates over WHO funding and its relations with TNCs reflect wider contradictions between the nation state and the TNC as the principal governing structures of contemporary globalisation. However, it is also necessary to recognise the close relations between the leading industrial nation states and their TNCs. This is epitomised in the recent Italian intervention on behalf of sugar and confection but there are many more examples of the US and the EU working on behalf of their TNCs within the corridors of global health. The drive by the US to include restrictive provisions on intellectual property protection in new trade agreements and the repeated efforts by the EU to legislate for the seizure of generic medicines in transit through Europe both illustrate the leading capitalist nation states' prioritising the profits of Big Pharma over access to affordable medicines.

Against this background, the debate around WHO's engagement with corporations and other 'non-state actors' takes on a new significance. This has been a debate between a number of middle-income countries ('emerging economies') pushing for tighter restrictions on corporations and the leading capitalist nation states pushing back. This kind of tension between developing countries and rich countries is common in WHO debates. Two current examples, both of which came before the recent Assembly, concern, first, the possibility of delinking pharmaceutical research and development from monopoly pricing under patent protection; and second, the need to separate national drug regulation from the claims by originator pharmaceutical companies against generic manufacturers. In both cases the tension is not between the nation state and the corporation; rather, it is between the rich nation states (and their corporations) versus L&MICs and demands of their people for access to affordable medicines.

The contention between the nation state and the corporation as governing structures under globalisation is a useful analytical frame, but it is not sufficient. It needs to be seen in conjunction with the contention between the imperial powers and the subaltern countries within the modern (neoliberal) imperial system. Even this is too simple because it doesn't recognise the tensions between the elites and subaltern classes within countries. The interests of the languishing middle class in the US do not coincide with the commercial interests of 'their' corporations. Neither does the defence by the Mexican delegates in the Assembly of a continuing freeze on WHO's budget reflect the interests of millions of Mexicans unable to pay for medicines and facing an epidemic of non-communicable disease.

The outcomes of these tensions will determine the prospects not just for global health but for the democratic vision and for an equitable and sustainable future.

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David Legge is a member of the global steering committee of the People's Health Movement (PHM). Much of the data used in this article was collected through WHO Watch, a project of PHM in association with a number of other civil society organisations. The work of the watchers is gratefully acknowledged. See

*Third World Resurgence No. 298/299, June/July 2015, pp 15-19