2023 will be a pivotal year in determining whether there is the political will to learn the lessons from the COVID pandemic and build resilient health systems.
With over 15 million deaths from COVID so far, 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 — which cannot be created by official development assistance (ODA) and philanthropy.
After major efforts by the Italian and Indonesian Presidencies of the G20, the Financial Intermediary Fund for Pandemic Prevention, Preparedness and Response (PPR) was created earlier this year. The fund, which has reached $1.5 billion, is a fraction of the estimated $10.5 billion required each year to protect the world from the next pandemic.
The [PPR] fund, which has reached $1.5 billion, is a fraction of the estimated $10.5 billion required each year to protect the world from the next pandemic.
For the major funds created over the past 20 years to tackle specific diseases, the replenishment model has been disappointing.
Furthermore, 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Some G20 and G7 countries are still approaching PPR from the outdated ‘donor-beneficiary’ approach, which fails to recognize health system strengthening as a vital common good, and a desire by recipient governments to have greater access and control over their ability to respond to an urgent health crisis.
Some G20 and G7 countries are still approaching PPR from the outdated ‘donor-beneficiary’ approach, which fails to recognize health system strengthening as a vital common good.
The Japan G7, Indian G20 Presidencies and the U.N. have all placed universal health coverage (UHC) firmly on the agenda for 2023.
While heads of government politically recognize the importance of UHC, better PPR and steps to reverse climate change, the level of national indebtedness caused by the COVID crisis means that many countries have an impossible choice: servicing their sovereign debt, driven by IMF conditionality rules, while trying to find the budget to address the health and climate change threats.
In October, the International Monetary Fund (IMF) launched the new Resilience and Sustainable Trust, which is designed to support LMICs to meet their immediate challenges on health and climate. This is a welcome initiative, however, as it presently operates, the funding requires countries to meet the standard IMF rules and conditions, which normally require fiscal consolidation. This must be urgently modified by IMF shareholders otherwise many countries will be unable to take advantage of its potential.
Since donor models are unable to meet the fundamental challenges posed in building stronger health systems and a resilient nationwide UHC, then 2023 must be the year where countries are given the tools and fiscal space to develop year on year, their own domestic health system.
2023 must be the year where countries are given the tools and fiscal space to develop year on year, their own domestic health system.
There are those countries that already have the fiscal space to increase health spending. In those cases the international community, including the multilateral development banks should work with those governments to build the evidence of the significant return that their country will receive economically and socially by investing an extra one or two percent of GDP in their health systems.
In India, an increase of 1 percent of GDP being invested in health system strengthening represents almost $30 billion per year.
In India, an increase of 1 percent of GDP being invested in health system strengthening represents almost $30 billion per year.
It takes political courage to do this, but it is a proven electoral winner when leaders commit to raising domestic investment in public health. We in the G20 HDP are willing to work with Governments to develop the metrics and the tool kit 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, which do not currently have the fiscal space to increase their investment in public health — many of these countries are focused entirely on managing the burden of servicing their sovereign debt. The COVID pandemic has deepened this debt crisis for many countries around the world.
On the one hand, the G20 and World Bank are promoting the new FIF for PPR and on the other hand the IMF pursues its orthodoxy, resulting in 85 percent of the world’s population having investments in vital public services either standing still or being cut.
At the height of the pandemic in 2020, LMICs paid almost $110 billion in debt servicing, yet support in 2021-22 from the ACT accelerator amounted to only $23 billion.
Where countries are developing resilient plans for investing in PPR, the international institutions must support those countries to develop a domestic fiscal framework.
Where countries are developing resilient plans for investing in PPR, the international institutions must support those countries to develop a domestic fiscal framework that helps them move away from long-term dependency on the traditional donor-recipient model.
These countries need active support to modify their fiscal regimes to increase investments in health — where a government commits to this roadmap, then the IMF must urgently develop a new model that rewards rather than penalizes this domestic investment strategy.
Some political leaders are already looking at new ways to build that 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 debt-repayment deferral where the WHO formally declares a pandemic in that region.
The G20 and the G7 must urge the IMF to encourage and work with leaders who are developing responsible fiscal and public investment initiatives that should not negatively impact a country’s credit rating and reward initiatives, such as the successful debt-to-health swap pioneered by the Global Fund or the more recent Belize debt-for-nature swap.
With 60 percent of LMICs at risk of debt default and many emerging markets heading into recession, the IMF shareholders must give the IMF managing director the explicit mandate to create a new model that rewards governments for investing in their health system and in tackling climate change.
The COVID pandemic and the growing threat of antimicrobial resistance, cardiovascular disease and cancer demands nothing less from the G7 and G20. Let us give vulnerable countries and their leaders the encouragement and the tools to develop sustainable domestic solutions that can be a massive step forward in delivering universal health coverage and proper pandemic preparedness.
