Jamra primary scholl for children affected by HIV/AIDS, drugs or poverty, Senegal (c) Nell Freeman/Alliance Participants in the Photovioce project, Ecuador © Marcela Nievas for the Alliance
  • Home > News > Health financing hangs in the balance

Health financing hangs in the balance

1
JUN
2009

Aids Alliance

The High Level Task Force on Innovative Financing for Health Systems is drawing to the end of its first phase. Recommendations will be made to the G8 on generating additional resources to meet the health Millennium Development Goals (MDGs) through innovative financing mechanisms.

The Alliance is concerned that the mechanisms currently being considered are far from innovative or new. We are working hard with policy makers and through our representation as a civil society member on the International Health Partnerships to present new ideas for consideration, such as a Currency Transaction Levy which could raise an additional $30-50 billion.

What is the High Level Task Force on Innovative Financing?

The Task Force was mandated to explore the issue of finding additional funds for health by the International Health Partnership (IHP ) which was launched in 2007 to respond to the challenge of meeting the MDGs on health.

The report just released by the Task Force (download PDF) has illustrated that even if aid pledges are kept there will be a $28-37 billion funding gap to meet the health MDGs by 2015. The report outlines how per capita spending on health needs to be at least $54 per person per year to have an impact on the health of the poorest. This compares with the average of over $4,000 spent in the West.

Comprising government leaders and health ministers, the World Bank, World Health Organisation and the United Nations, the Task Force is exploring ways in which to raise this additional income for health needs in developing countries.

Why does it matter?

Despite many advances and achievements, the international community is far from achieving the MDGs on health by 2015.

The Global Fund predicts a funding shortfall of at least $5 billion over the next two years in meeting the demands of countries battling HIV, TB and malaria epidemics.

The number of new HIV infections continues to outstrip the advances made in treatment numbers – for every two people put on antiretroviral drugs, another five become newly infected.

Every minute a woman dies in childbirth and a child born in a developing country is over 13 times more likely to die within their first five years than a child born in an industrialised country.

The credit crunch is only going to exacerbate this challenging situation.

What are civil society and the Alliance doing?

The Alliance and its partners have participated in civil society consultations reviewing the draft proposals of the Task Force. Of the innovative financing mechanisms being reviewed the Currency Transaction Levy is by far the most promising given the volume of additional revenue it can generate.

UK Prime Minister Gordon Brown is a champion of innovative financing for development – favouring the International Financing Facility (IFF) which ‘front loads’ future development assistance to enable spending on health now.

This approach is generally not supported by civil society because it is funded through future aid commitments, so when future aid is under threat, now is not the time to use future commitments to invest.

However, significant new revenue from a Currency Transaction Levy could be used to launch an IFF for health systems and help to bridge the funding gap for the Global Fund, without accumulating future debt.

We will be providing regular news updates as decisions are made by the Task Force, with analysis of the implications. Watch our website for details.

For more information on this issue please contact Elaine Ireland or Anton Kerr from the Alliance secretariat Policy team.