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Date: Thu, 18 Apr 2002 07:47:58 -0500
From: Africa Action <[log in to unmask]>
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Subject: Africa: Hazardous to Health, 2

Africa: Hazardous to Health, 2
Date distributed (ymd): 020418
Africa Action Document

Africa Policy Electronic Distribution List: an information
service provided by AFRICA ACTION (incorporating the Africa
Policy Information Center, The Africa Fund, and the American
Committee on Africa). Find more information for action for
Africa at http://www.africaaction.org

+++++++++++++++++++++Document Profile+++++++++++++++++++++

Region: Continent-Wide
Issue Areas: +health+ +economy/development+

SUMMARY CONTENTS:

This posting contains the second part of an Africa Action position
paper released on April 18 at a joint press briefing in Washington
with the World Bank Bonds Boycott. On the eve of the press
conference, Africa Action executive director Salih Booker stated,
"The policies of the World Bank and IMF have eroded Africa's health
care systems and intensified the poverty of Africa's people. These
institutions must be made accountable for their role in causing the
worst health crisis in human history, which Africa now faces."

Africa Action supports the World Bank Bonds Boycott Campaign as a
tool to exert pressure on the World Bank to cancel Africa's debt
and end the imposition of economic policies harmful to health.

For more information see http://www.africaaction.org

+++++++++++++++++end profile++++++++++++++++++++++++++++++

Hazardous to Health: The World Bank and IMF in Africa

Africa Action Position Paper

By: Ann-Louise Colgan, Research Associate, Africa Action

April, 2002

(continued from part 1)

More than 17 million Africans have died of HIV/AIDS. It is
currently estimated that more than 28 million of the 40 million
people living with the disease worldwide are in sub-Saharan Africa
[16]. There are more than 12 million African orphans who have lost
their mothers or both parents to AIDS [17]. The social and
economic effects of the AIDS crisis are reversing post-independence
progress and exacerbating conditions of underdevelopment. The
policies imposed by the World Bank and IMF have fueled the spread
of the disease and continue to hinder the response to this health
emergency.

Declining Health Care Systems

As poverty has increased Africa's health problems, World Bank and
IMF intervention has also led to a breakdown of health care
delivery systems. The role of the state in the provision of health
care services has been reduced substantially. Cutbacks in the
health sector have severely undermined existing services. And
Africa's debt repayment obligations to foreign creditors have
diverted money directly from spending on health.

Cutbacks in government spending represent a major component of
World Bank and IMF adjustment programs. In the 1980s, real
disbursements per person dropped in government expenditure in many
African countries. In Madagascar, between 1977 and 1985,
government expenditures declined by 24% [18]. Cutbacks in
government budgets led to major cuts in the health sector. In the
42 poorest countries in Africa, spending on health care fell by 50%
during the 1980s [19]. In Nigeria, per capita expenditure on
health fell by 75% between 1980 and 1987 [20].

The dramatic drop in health expenditure in the 1980s and 1990s
resulted in the closure of hundreds of clinics, hospitals and
medical facilities across the continent. Those that remained open
were generally left under-staffed and lacking in essential medical
supplies. Many were unable to afford even basic vaccines. In 14
sub-Saharan African countries between 1990-1992, the level of polio
vaccination dropped by more than 10% as a result of cutbacks in
health care services [21].

Thousands of health care professionals throughout the continent
lost their jobs as a result of public sector cuts. In Ghana,
between 1982 and 1992, the number of doctors in the government
health care system dropped from 1700 to 665. In Senegal, between
1980 and 1993, the number of people per nurse increased six-fold
[22].

Even as government spending on health was cut back, the amounts
being paid by African governments to foreign creditors continued to
increase. By the 1990s, most African countries were spending more
repaying foreign debts than on health or education for their
people. Health care services in African countries disintegrated,
while desperately needed resources were siphoned off by foreign
creditors. It was estimated in 1997 that sub-Saharan African
governments were transferring to Northern creditors four times what
they were spending on the health of their people [23]. IN 1998,
Senegal spent five times as much repaying foreign debts as on
health [24]. Across Africa, debt repayments compete directly with
spending on Africa's health care services.

The erosion of Africa's health care infrastructure has left many
countries unable to cope with the impact of HIV/AIDS and other
diseases. Efforts to address the health crisis have been
undermined by the lack of available resources and the breakdown in
health care delivery systems. The privatization of basic health
care has further impeded the response to the health crisis.

4. Privatization and User Fees

Privatization forms a centerpiece of the World Bank and IMF agenda.
Reducing the size and scope of government, and privatizing
state-owned enterprises and services, is a major element of World
Bank and IMF programs. Under World Bank and IMF direction, control
of health care services has increasingly been transferred from
African governments to the private sector. The rationale is that
health care services are better financed and more efficiently
delivered privately.

The World Bank has recommended several forms of privatization in
the health sector. These include: the introduction of "user fees"
for health services previously provided free of charge; the
promotion of health insurance schemes; increased investments in
private care in order to attract patients to private facilities.
Through these measures, private services are made the primary focus
of health care.

Throughout Africa, the privatization of health care has reduced
access to necessary services. The introduction of market
principles into health care delivery has transformed health care
from a public service to a private commodity. The outcome has
been the denial of access to the poor, who cannot afford to pay for
private care.

For example, the introduction of user fees for health care services
has been shown to sharply reduce access for those unable to pay.
The World Bank and IMF have promoted "user fees" as a means of
generating revenue for the health sector. They argue that these
fees will tax the rich and that a system of exemptions will protect
the poor from the costs. However, the evidence shows that user
fees have actually succeeded in driving the poor away from health
care services.

Ghana, Swaziland and the former Zaire were among the first African
countries where user fees replaced free, or almost free, services.
In each of these, studies showed that the introduction of fees led
to reduced utilization of these services [25]. Studies in C"te
d'Ivoire have shown that those with income above the median make
more use of medical services when a user fee is charged. But those
with below median incomes reduce their use [26]. Across Africa,
reports indicate that attendance at hospitals and clinics drops
significantly after the introduction of user fees.

Schemes intended to exempt the poor from user fees have been shown
to be ineffective. A comprehensive UNICEF study discovered that
such schemes are rare [27]. The study claims that poor people are
generally unaware of such exemptions, and that there are often
complex administrative barriers involved. The report concludes
that the implementation of exemption schemes is infrequent and is
applied in ad hoc ways. It therefore does not appear that user
fees have been managed so as to collect revenues only from the
rich. Instead, they have had the effect of closing off access to
those who cannot pay. As a recent paper concluded, user fees
"increase the barriers disproportionately faced by the poor when
seeking health care."[28] Their failure to generate revenue has
also undermined their economic rationale, as propounded by the
World Bank and IMF.

Another form of privatization involves the promotion of insurance
schemes as a means to defray the costs of private health care.
This is inherently flawed in the African context. Less than 10% of
Africa's labor force is employed in the formal job sector [29].
Therefore, the vast majority of people are not eligible for
insurance through their employer. Income levels in Africa are
extremely low, and have been reduced further by wage cuts and lay-
offs associated with World Bank and IMF austerity policies. Most
Africans cannot afford the cost of private insurance. In view of
such circumstances, insurance schemes cannot resolve the issue of
access to private health care in African countries [30].
Beyond the issue of affordability, private health care is also
inappropriate in responding to Africa's particular health needs.
When infectious diseases constitute the greatest challenge to
health in Africa, public health services are essential. Private
health care cannot make the necessary interventions at the
community level. Private care is less effective at prevention, and
is less able to cope with epidemic situations. Successfully
responding to the spread of HIV/AIDS and other diseases in Africa
requires strong public health care services.

The privatization of health care in Africa has created a two-tier
system which reinforces economic and social inequalities. As
health care has become an expensive privilege, the poor have been
unable to pay for essential services. The result has been reduced
access and increased rates of illness and mortality. Despite these
devastating consequences, the World Bank and IMF have continued to
push for the privatization of public health services.

5. Recent Developments: Reform or Repackaging?

In recent years, there has been growing criticism of the impact of
World Bank and IMF programs in developing countries. As a result,
these institutions have shifted their public stance in favor of
"poverty reduction." They have attempted to re-package structural
adjustment to include greater emphasis on social development
programs.

The "Poverty Reduction" Spin

Both the World Bank and IMF have proclaimed a greater commitment to
"poverty reduction" in recent years. They have made it a
requirement for countries to prepare Poverty Reduction Strategy
Papers (PRSPs) as a condition for the receipt of new loans or debt
relief. These papers are intended to be drawn up by national
governments in consultation with civil society "stakeholders" and
with World Bank and IMF guidance. They are to outline the
priorities and strategies of African governments in their
development efforts. In order to reflect their concern with social
development, the World Bank and IMF have also renamed structural
adjustment lending. The IMF now uses the term "Poverty Reduction
and Growth Facility" (PRGF). The World Bank's new term is "Poverty
Reduction and Support Credits"(PRSCs).

The World Bank has also increased its funding for health, and for
HIV/AIDS programs in particular. While the shift in focus towards
prioritizing social development and poverty eradication is welcome,
fundamental problems remain. New lending for health and education
can achieve little when the debt burden of most African countries
is already unsustainable. Debt cancellation should be the first
step in enabling African countries to tackle their social
development challenges. Additional resources to support health and
education programs should be conceived as public investment, not
new loans.

The new spin on the World Bank and IMF priorities fails to change
the basic agenda and operations of these institutions. Indeed, it
appears to be largely an exercise in public relations. The
conditions attached to World Bank and IMF loans still reflect the
same orientation prescribed over the past two decades. The recent
moves towards promoting poverty reduction have actually permitted
these institutions to increase the scope of their loan conditions
to include social sector reforms and governance aspects. This
allows an even greater intrusion into the domestic policies of
African countries. It is highly inappropriate that external
creditors should have such control over the priorities of African
governments. And it is disingenuous for such creditors to
proclaim concern with poverty reduction when they continue to drain
desperately needed resources from the poorest countries.

Equivocation on User Fees

In 1998, the Bank's Operations Evaluation Department reported that
nearly 75% of projects in sub-Saharan Africa included the
establishment or expansion of user fees [31]. As the negative
effects of user fees have begun receive more public attention, the
Bank has sought to distance itself from the promotion of these
fees.

In a policy statement at the end of 2000, the World Bank announced
that it was stepping back from the promotion of user fees for basic
social services in the developing world. It stated that it
supports the provision of basic health care for free. However, it
added that well-designed and well-implemented fees can be useful in
mobilizing additional resources for these services in poor
countries. It maintains that exemption schemes do work in some
countries. Overall, it remains convinced that user fees can
improve the quality of health care services being provided.

It is difficult to ascertain whether the World Bank is still
pushing user fees in practice. Indeed, it is not easy to monitor
the content of the Bank's adjustment programs at all because of the
lack of information disclosure on this form of lending. In the
U.S., an important victory was achieved in 2000, when Congress
passed language against user fees. This language requires the U.S.
representatives to the World Bank and IMF to oppose user fees.
These representatives must inform Congress within 10 days if any
loan requiring the imposition of user fees is approved by the
International Financial Institutions.

Despite this victory, challenges remain. It has been documented in
at least one case since then that user fees have been included in
a loan package, despite this legislative language. This calls into
question the commitment of the World Bank and, of its U.S.
Directors, to ending user fees as part of World Bank and IMF
prescriptions. At the IMF, no move has been made to indicate a new
policy on the imposition of user fees in borrower countries.

Water Privatization, a threat to future health

The privatization of public water systems is a strategy being
promoted by the World Bank in an increasing number of African
countries. This involves the reduction of public subsidies for
clean water. It also involves, in some cases, the introduction of
cost-recovery measures for access to water supplies.

This development represents a major cause for concern. Access to
clean water is a vital public health necessity and a basic human
right. The privatization of water can only lead to reduced access
to safe water for poor communities. In Ghana, the recent moves
towards water privatization are being opposed by civil society
groups for this reason. Already, according to the Ghanaian
Ministry of Health, half of all clinic visits in Ghana are due to
water-borne illnesses. The groups opposing privatization are
concerned that this move will further reduce access to safe and
affordable water in urban areas [32].

Over two million people in developing countries die each year
because of diseases related to lack of clean water. Many of these
are children. Increased privatization of water in African
countries can only increase the risk of ill-health among the poor.

6. Conclusion

The free market fundamentalism of the World Bank and IMF has had a
disastrous impact on Africa's health. The all-out pursuit of
market-led growth has undermined health and health care in African
countries. It has forced governments to sacrifice social needs to
meet macroeconomic goals.

This approach to development is fundamentally flawed. The failure
to prioritize public health denies its significance in promoting
long-term economic growth. As the WHO Commission on Macroeconomics
and Health recently concluded, health is more than an outcome of
development, it is a crucial means to achieving development [33].
Investments in Africa's health must therefore form a central part
of any comprehensive development strategy.

Economic and social progress in Africa cannot succeed in the
context of the current health crisis.
In order to address this crisis, it is necessary to tackle the
structural factors that fuel it. The World Bank and IMF must
accept responsibility for the devastating impact that their
policies have had on Africa's health. If the U.S. is serious about
responding to Africa's health crisis, it must use its power at the
World Bank and IMF to end the harmful policies of these
institutions.

Endnotes for part 2

16. UNAIDS/World Health Organization (WHO), "AIDS Epidemic
Update", December 2001 See
http://www.unaids.org/epidemic_update/report_dec01/index.html

17. Salih Booker and William Minter, "AIDS in Africa: is the
world concerned enough?", in Great Decisions, 2002 (New York,
Foreign Policy Association, 2002). See
http://www.africaaction.org/action/aids2002.htm

18. Turshen, Privatizing Health Services in Africa, p. 16.

19. Inter-Church Coalition on Africa (ICCAF), Beyond Adjustment:
Responding to the Health Crisis in Africa (Toronto, 1993), p. 17.

20. ICCAF, "Beyond Adjustment," p. 19.

21. Kamkes, J., van der Meer, J., Mooren, H., and de Wildt, G.,
"Economic adjustment in poor countries is too painful for health
care", Bulletin Medicus Mundi (No. 64, April 1997)
(http://www.medicusmundi.ch/bulletin/bulletin641.htm)

22. B. G. Schoepf, C. Schoepf, and J. Millen, "Theoretical
Therapies, Remote Remedies: SAPs and the Political Ecology of
Poverty and Health in Africa," in J. Yong Kim, J. Millen, A.
Irwin, A., and J. Gershman, J., eds., Dying for Growth. Global
Inequality and the Health of the Poor (Monroe, ME: Common Courage
Press, 2000), p. 112.

23. United Nations Development Programme (UNDP), Human
Development Report 1997 (New York: Oxford University Press,
1997).

24. Jubilee 2000 Coalition, UK, Through the Eye of A Needle.
The Africa Debt Report (London, 2000), p. 4. See
http://www.jubilee2000uk.org/analysis/reports/needle.htm

25. D. Arhin-Tenkorang, "Mobilizing Resources for Health: The
Case for User Fees Revisited", WHO Commission on Macroeconomics
and Health (CMH) Working Paper Series, Paper No. WG3:6., November
2000. Available through http://www.who.int/cmhreport

26. WHO, "Financing Essential Drugs: Report of a WHO Workshop",
document WHO/DAP/88.10, 13. Referenced in Turshen, Privatizing
Health Services in Africa., p. 48.

27. S. Reddy. and J. Vandemoortele, "User Financing of Basic
Social Services. A review of theoretical arguments and empirical
evidence," 1996.
See http://www.unicef.org/reseval/pdfs/Userfees.pdf

28. Arhin-Tenkorang, "Mobilizing Resources for Health."

29. The World Bank, World Development Report 1995 (New York:
Oxford University Press, 1995). Referenced in Turshen,
Privatizing Health Services in Africa., p. 61.

30. Turshen, Privatizing Health Services in Africa.

31. John Gershman, "The World Bank and Health".
See http://www.bicusa.org/ptoc/htm/gershman_health.htm

32. For more information, see
http://www.isodec.org.gh/isodec/campaigns.htm

33. For the final report of the WHO Commission on Macroeconomics
and Health, see the section on the WHO website at
http://www.who.int/cmhreport

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