ENHANCING PRODUCTIVE CAPACITIES: THE ROLE OF HEALTH

Keynote Address to the Third UN Conference on LDCs

by K. Y. Amoako,
Executive Secretary of ECA
and Member of WHO Commission on Macroeconomics and Health 
Brussels, Belgium, Wednesday 16 May 2001

Honourable Co-Chairs, Minister Minna and Minister Banda,
Honourable Ministers of Finance and Trade,
Executive Director of WHO, Dr. Asamoabaah,
Distinguished experts,
Ladies and Gentlemen,

It is a pleasure to be with you today. In my address, I would like to share with you some thoughts about some of the linkages between health and development. In the last month, my thinking on this subject has been sharpened by attending the Special Summit of the Organization of African Unity on HIV/AIDS and other infectious diseases, held in Abuja last month, followed by the Conference of African Ministers of Finance and Ministers of Development and Economic Planning that concluded last week. It is a humbling experience to meet with so many individuals who are grappling with the huge challenges of health and development on a day-to-day basis. And again, at this gathering here, there are many of you who have deep personal experience of these important issues.

Everything I have learned, which has again been underlined by the previous speakers, points to an emerging consensus on the importance of health to development.

It also points to the need for radical, imaginative thinking. The time for ‘business as usual’ is past.

As mentioned by Dr. Asamoabaah, the work of the Commission on Macroeconomics and Health, is amassing evidence on this issue. I have the honour to serve on this Commission. Although our report is not due out until next year, the gravity of the situation compels us to make public some of the Commission’s findings without delay. Some of our findings have been surprising, not to say shocking. And they have implications that go further—much further in fact—than we had anticipated.

The work of the Commission demonstrates that the current health crisis in the Least Development Countries is more than an impediment to development. It is a fundamental obstacle. Health is not just a component of development. Health and education are jointly the keys to development.

Our priorities need to be critically reassessed. And I think I am not overstating the case if I say that there is a well-accepted paradigm, which puts human capital at the center of the development agenda. The focus is on the twin, linked issues of health and education. And there is a new readiness in the least developed countries as well as in the international community to take real, decisive steps to meet this challenge.

Let us examine some dismal statistics from LDCs and examine their implications.

1. Many LDCs are not on target to meet basic goals for child survival and life expectancy. For example, in sub-Saharan Africa, life expectancy at birth, which rose to 59 years in the early 1990s, is forecast to drop to 45 years between 2005 and 2010. Among the 10.5 million children who died last year, fully 99 percent were from developing countries.

2. The situation is worse in those countries most severely affected by the HIV/AIDS pandemic. Only four are on target to meet the Millennium Summit goal of reducing the 1990 level of infant mortality by two thirds by 2015. HIV/AIDS is literally wiping out a generation of achievement—and threatening to wipe out much of an actual generation as well.

Overcoming HIV/AIDS is a survival issue.

3. In stark numbers, we are needlessly losing millions of people in poor countries. 

4. The economic cost of poor health is high. In fact, one of the most compelling conclusions of the research undertaken by the Commission on Macroeconomics and Health is that poor health is far more economically costly than we had ever appreciated. Endemic malaria alone is estimated to cost more than 1 percent per annum in lost growth. If we had effectively contained malaria 30 years ago, when control measures were available, the economies of tropical African countries would now be about 40 percent bigger than they are today. In countries with HIV prevalence rates of 10 percent or more, the economic impact threatens to be even more serious. By 2010, it is estimated that the HIV/AIDS pandemic will have cost South Africa about US$22 billion, cutting 17 percent from the country’s GDP.

5. It follows that good health is not just a factor that facilitates development. It is in fact at the heart of development. This is an insight that needs to be incorporated into every aspect of development planning.

6. To meet our goals, we need more money and better systems. We are beginning to be able to calculate the price of achieving basic health. In LDCs, we need to provide a minimum expenditure on health of about US$45-60 per head per annum. This represents a major increase on current levels of spending, which average about US$5-10 per head per annum from government funds, matched by a comparable expenditure from households themselves. LDCs themselves can certainly mobilize more resources, and it is a matter of principle and effectiveness that the ‘first dollar’ in additional spending should be domestic. But the international community will need to shoulder the greater part of this burden. Currently just 7.5 percent of global ODA is developed to health, nutrition and population programmes—a total of US$3.8 billion, of which about one third goes to LDCs.

Meeting the international development goals and Millennium Summit Goals needs a major new global commitment. The total finance needed is estimated at US$15-24 billion for the 600 million people in LDCs. These figures exclude HIV/AIDS: combating HIV/AIDS in sub-Saharan Africa alone will require an additional US$ 5-10 billion annually. These amounts are small by global standards. But, gauged against total ODA of US$55 billion, it represents a steep climb indeed, indicating just how far we need to reach to provide basic health to most of the world’s poor.

7. The unfortunate reality in LDCs is that, if we had the money, we could not spend it effectively. In some countries, even existing limited budgets remain unspent. We need capacity building and health sector reform. The responses must be systemic. We are suffering some reverses of recent gains, because sometimes we focused on easy interventions rather than lasting remedies. We must get the fixes right. Part of the reform involves bringing developmental models into health care. We need multi-sectoral strategies to promote health. We need wide-ranging social mobilization.

These findings indicate the direction of the Commission’s thinking. I would be dishonest if I minimized their implications. Permit me to compare the situation of two countries in which I have spent a lot of time. Currently I live in Ethiopia. I have also lived in the United States. In the last six years, one health worker was added in the U.S. for every 600 of its citizens. There is now one doctor for every 256 people and an additional health worker for every 91 people. The national health budget is enormous. In comparison, in Ethiopia, there is one doctor for every 40,000 people and the national health budget is US$2 per person. In recent years, primary health coverage has expanded so that it reaches 53 percent of the population. This is counted a national success—but just short of half of Ethiopia’s citizens still do not have access to any health care at all. Even if anti-retrovirals were free for all the estimated 300,000 Ethiopians with full-blown AIDS, it would take the great majority of the country’s medical talent just to administer the medicine, leaving all other health challenges unmet. If I were tasked with overcoming the HIV/AIDS pandemic in Ethiopia, plus preventing needless deaths from other common diseases, I would have to look well beyond the official budget and the small medical establishment.

The challenge is huge. But we cannot afford to fail.

In short, we cannot continue with business as usual.

This leads me to three personal conclusions about how poor countries need to view health challenges. Of course, we need more resources. But some may be surprised to hear that two of the three conclusions focus principally on substantive reform.

The first conclusion is that we need to maximize the efficient use of the resources that we already have. Our basic resource is our people. We need leadership at all levels. We need social mobilization and multi-sectoral strategies. In this respect, the African Development Forum 2000, devoted to the leadership challenges of the HIV/AIDS pandemic, was a landmark event, in that it identified the roles of all sectors of society in combating the pandemic. A theme often repeated during that conference, by African heads of state and also by heads of UN agencies, was that HIV/AIDS demands the same level of mobilization as fighting a war.

Second, we need to improve the quality of our national health systems. Health sector reform is essential. Fortunately, there is much best practice that we can observe, replicate and scale up. Our health systems cannot be built upon the lines of the resource-rich U.S. There is much to be learned from Chile and China, which have delivered very impressive health improvements at reasonable cost.

These are fine models, but something more is needed today. In the last decade, something very significant has changed, which is the rapid globalization of the health sector. Let me point to some profoundly important implications of this.

To begin with, poor countries are compelled to pay rich-country rates for intellectual property rights on new medicines. The recent and welcome decision by international pharmaceutical companies not to contest South Africa’s decision to manufacture or import generic drugs for HIV/AIDS is a welcome step, but the fundamental problem remains: medication is priced according to supply and demand in developed country markets.

In addition, research and development in health is overwhelmingly concentrated on the diseases of the rich. The health problems of 90 percent of the world’s population attract only 10 percent of global funding for research and development. The key killer diseases of tropical countries attract just a fraction of the bio-medical and epidemiological research that could deliver major breakthroughs. Investment in research in poor countries’ health problems should be considered a priority for inter-governmental partnership. Regional centers of excellence for research and development should be set up, jointly by LDCs and international partners, to focus on these challenges.

This is very similar to the problem faced in agriculture in the 1960s. In that instance, the Consultative Group on International Agricultural Research (CGIAR) was a highly successful innovation that brought together the finest talents from the public and private sectors to perform both research and to build the capacities of countries. This model can certainly be adapted to the challenge of health research.

An equally significant impact of globalization for LDCs is the emergence of global markets for health professionals. For example, South Asia has long been a supplier of medical practitioners to Britain. Recently, to fill vacancies in its health service, Britain has begun recruiting nurses from several African countries—bidding them away from their own countries. No accurate figures are currently available but it is likely that the value of services rendered by LDC-trained health professionals in developed countries exceeds the health-related ODA to LDCs. This is an issue that warrants detailed joint study by WHO and ILO.

This leads me on to my third conclusion. We need bolder and more effective international partnerships in the field of public health.

These partnerships must be home-grown: ownership must reside in the poor countries themselves. The Administrator of UNDP and I co-chair a UN system wide initiative for Africa, whose largest components are the education and health sectors. As part of this initiative, the World Bank has said that virtually every country that supplies a decent education sector programme will find finance for it. The implication is that the same will hold for health too. But the plain fact is that too few countries are preparing ambitious health sector plans for international finance.

Assuming that we have the leadership and the courage to tackle our health crises, what should we ask for from our partners? Here, the current thinking of leading African governments and like-minded donors may be of interest. We are thinking of African ownership of visions of development as well as programmes and policies, stable long-term development partnerships, and mutual accountability towards jointly-agreed goals.

Last week in Algiers, the Joint Conference of African Ministers of Finance and Development and Economic Planning reached agreement on the importance of sectoral goals, and of establishing enhanced international partnerships in pursuit of these goals.

To summarize, resolving the health crises in our countries is pivotal to achieving the twin goals of reducing poverty while increasing our rates of economic growth. Healthy people are the backbone of sustained social and economic progress.

Armed with a better understanding of the true costs of the ongoing health crisis in the poorest countries, we are impelled to focus more clearly and substantively on the priority of health for all.

The current focus on health is long overdue. But many factors converge to underscore the fact that the time for decisive action is now. For many countries, particularly in sub-Saharan Africa, the HIV/AIDS pandemic has assumed such magnitude that it is quite simply an issue of survival.

We all recognize that the world’s health crises, which are everywhere predicted to grow, are gaining increasing attention at national and international levels. I want to leave you with three points:

First, health systems require reorientation to be able to manage national public health campaigns as well as the spread of nation-wide formal health systems.

Second, my friends in WHO, perhaps with other international agencies, need to strengthen the international system of support of capacity building of such systems as well as capacity creation of research capabilities for the diseases of the poor; and,

Third, addressing health issues in a systematic way requires far more urgency and priority in international aid budgets. This is both a matter of international solidarity, and, when you get right down to it, a matter of national security, which goes well beyond normal aid considerations.

Again, thank you for the pleasure of speaking before you.