2023 will be a pivotal year for determining whether there is political will to learn from the lessons of the COVID pandemic and build resilient health systems.
With more than 15 million deaths from COVID to date, added to the growing impact of cardiovascular disease and cancer in low- and middle-income countries (LMICs), it is clear that we need new financing mechanisms. to properly deliver health systems – fit for purpose – that cannot be created by official development assistance (ODA) and philanthropy.
After considerable efforts by the Italian and Indonesian G20 Presidencies, the Financial Intermediate Fund for Pandemic Prevention, Preparedness and Response (PPR) was established earlier this year. The fund, which has reached $1.5 billion, represents a fraction of the estimated $10.5 billion needed each year to protect the world from the next pandemic.
For major funds created over the past 20 years to address specific diseases, the replenishment pattern has been disappointing.
Further, a consequence of the vaccines, therapeutics and diagnostics (VTD) nationalism evident during the COVID pandemic, is a new determination among many countries to challenge the traditional donor-recipient international health architecture.
Some G20 and G7 countries still approach PPR from the outdated “donor-recipient” approach, which does not recognize health system strengthening as a vital common good, and the desire of recipient governments to have a better access and control over their ability to respond to an urgent health crisis.
The Japanese G7, Indian G20 and UN presidencies have all put universal health coverage (UHC) firmly on the agenda for 2023.
While government leaders politically recognize the importance of UHC, better PPR and measures to reverse climate change, the level of national debt caused by the COVID crisis means that many countries have an impossible choice. : servicing their sovereign debt, guided by IMF conditionality rules, while trying to find the budget to deal with health and climate threats.
In October, the International Monetary Fund (IMF) launched the new Resilience and Enduring Confidence program, designed to help LMICs address their immediate health and climate challenges. This is a welcome initiative, however, as it currently works, the financing requires countries to adhere to standard IMF rules and conditions, which normally require fiscal consolidation. This needs to be changed urgently by the shareholders of the IMF, otherwise many countries will not be able to take advantage of its potential.
With donor models unable to address the fundamental challenges of building stronger health systems and resilient UHC at country level, 2023 must be the year countries have the tools and fiscal space to develop, year after year, their own national health system.
Some countries already have the fiscal space to increase health spending. In these cases, the international community, including the multilateral development banks, should work with these governments to establish evidence of the significant economic and social return that their country will receive by investing an additional one or two percent of GDP in their health systems.
In India, a 1% increase in GDP invested in strengthening the health system represents nearly $30 billion a year.
It takes political courage, but it’s a proven electoral winner when leaders commit to increasing national investments in public health. Within the G20 HDP, we stand ready to work with governments to develop the metrics and toolkit that will demonstrate the value of increased investment in public health based on models already deployed in G20 countries.
There are of course those countries that do not currently have the fiscal space to increase their investments in public health – many of these countries are focused entirely on managing their sovereign debt service burden. The COVID pandemic has made this debt crisis worse for many countries around the world.
On the one hand, the G20 and the World Bank promote the new FIF for the PPR and on the other hand the IMF continues its orthodoxy, which results in 85% of the world’s population having investments in vital public services, either immobile , or cut.
At the height of the pandemic in 2020, LRICs paid nearly $110 billion in debt service, but support in 2021-22 from the ACT accelerator was only $23 billion.
As countries develop resilient plans to invest in PPR, international institutions should support these countries to develop a national fiscal framework that helps them move away from long-term dependence on the traditional donor-recipient model.
These countries need active support to change their tax regimes to increase investment in health – when a government commits to this roadmap, then the IMF must urgently develop a new model that rewards rather than penalizing this domestic investment strategy.
Some political leaders are already exploring new ways to create this vital fiscal space in their economy. Barbados Prime Minister Mia Motley has developed a “pandemic clause” in the country’s sovereign bond, which leads to the postponement of debt repayment when the WHO officially declares a pandemic in that region.
The G20 and G7 should urge the IMF to encourage and work with leaders who develop responsible public investment and fiscal initiatives that should not negatively impact a country’s credit rating and reward initiatives , such as the success of the debt-for-health swap pioneered by the Global Fund or Belize’s most recent debt-for-nature swap.
With 60% of LMICs at risk of default and many emerging markets entering recession, IMF shareholders must give the IMF Managing Director an explicit mandate to create a new model that rewards governments for their investment in their health systems. and in the fight against climate change.
The COVID pandemic and the growing threat of antimicrobial resistance, cardiovascular disease and cancer demand nothing less from the G7 and G20. Let us give vulnerable countries and their leaders the encouragement and tools to develop sustainable national solutions that can be a big step towards universal health coverage and good pandemic preparedness.
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