Wednesday, 28 March 2012

Redefining Poverty in China and India Parts 1 & 2

Repost from WIDER newsletter

Redefining Poverty in China and India: What Does This Mean for the Fight Against Global Poverty? Part I

Tony Addison and Miguel Niño-Zarazúa
China and India are making immense strides in development. Growth in both countries has been impressive. But there is now much concern about whether impressive growth rates are yielding enough poverty reduction. The present debate about their poverty lines is a reflection of this. In this first part of a two-part article, we consider the definition of the poverty line in China and India. Part 2, in next month’s Angle, focuses on the key challenges facing these two Asian giants.
The last two decades have seen a big fall in the number of people living on less than US$1.25 a day, the World Bank’s international poverty threshold—down from 1.9 billion in 1990 to 1.4 billion in 2005. By this measure, the global poverty rate fell from 42% in 1990 to 25% in 2005, and it may yet fall to 15% by 2015, or 900 million people.
However, US$1.25 does represent a very low standard of living. Those below it are in extreme deprivation, and many people above this threshold would regard themselves as being poor. 
Two big countries, China and India, account for much of this fall in the number of people below the US$1.25 threshold. But despite their progress, both countries are still marked by deep poverty. In both China and India, the debate on poverty—and specifically the poverty line to be used—has recently intensified. Poverty measures have always been a source of controversy, as there is no general consensus about the conceptual and methodologies approaches used to construct poverty lines. The present debate in both countries illustrates this vividly.
India’s poverty line
In September 2011, the Indian Planning Commission presented new estimates for the country’s poverty lines in urban and rural areas, setting these thresholds at 965 and 781 rupees per capita per month (or about 32 and 26 rupees per capita per day), respectively.
Since the early 1990s, India’s official poverty estimates have been made on the basis of the methodology recommended by the Lakdawala Committee established in 1993. These poverty lines are based on per capita consumption levels associated with a commodity bundle that yielded a specified level of caloric intake believed in 1973-74 to be appropriate for rural and urban areas (2,400 and 2,100 kilocalories per capita per day for the rural and urban areas, respectively).
More recently, in December 2005, the Planning Commission appointed a Committee chaired by Suresh Tendulkar to review the Lakdawala poverty lines. In 2009, the Tendulkar Committee concluded that some changes were necessary, and recommended to locate the poverty line in the consumption levels observed in the 2004-05 National Sample Survey (NSS), after correcting for the rural–urban price differential.
The new estimates increased the poverty headcount ratio for rural areas from 28.3% using the 1993 methodology to nearly 42% using the Tendulkar methodology, which is very close to figures reported using the World Bank’s US$1.25 per day poverty line (see Table 1). The new poverty estimates show that more than 327 million Indians living in rural areas are in poverty, an increase of 105 million people in absolute terms.Table 1: India’s poverty headcount ratios. 1 Government of India Planning Commission (2011) Press Note on Poverty Estimates. 2 World Bank’s PovCalNet database. 
Three critical issues in India’s poverty line
At the centre of the most recent discussions are three critical issues. First, the Tendulkar Committee reported an observed calorie intake of 1,999 and 1,776 kilocalories per day for those near the new poverty line in rural and urban areas, respectively. These levels of calorie intake are regarded as low relative to the minimum dietary energy requirement recommended in the Report of a joint Food and Agricultural Organization-United Nations University-World Health Organisation Expert Consultation published in 2004. Second, the new methodology did not consider the possibility of changes in consumer preferences, which means that the commodity bundle of 1973-74 does not now capture the current pattern of consumption in India. Third, differential rates of inflation for food and non-food items were not taken into account.
The new poverty line has also caused an intense debate in political circles to the extent that the Planning Commission and the Ministry of Rural Development had to state that a socio-economic and caste-economic census was underway to revise the existing poverty lines, although the Tendulkar poverty line will remain as a reference point for eligibility for the subsidized food and other social protection programmes.
China’s poverty line
China has been very successful in reducing extreme deprivation, as is evident from Figure 1. In the early 1980s, 94% of China’s rural population, and 44.5% of the urban population lived on less than US$1.25 a day. By 2005, the percentage of people in poverty had fallen to 26% in rural areas, and to 1.7% in urban areas. This represents a fall of 627 million people in poverty, from 835 million in 1981, to 207.7 million in 2005. Remarkably, the fall in the number of China’s poor exceeds the number still living in poverty in sub-Saharan Africa (about 388 million people) and Latin America (47.6 million people).
Figure 1. Headcount Index (US $1.25 a day)
Source: World Bank’s PovCalNet database

However, China has not been exempt from controversy in the way it measures poverty despite the fact that the country has lifted the poverty line on several occasions since the late 1970s, when the country embarked on market-based reforms.
China’s official poverty lines have been derived based on a bundle of items dominated by food grains that have neither been updated adequately to reflect changes in consumption patterns, nor adjusted to take into account inflationary trends in both food and non-food items. The result was one of the lowest rural poverty lines in the developing world. In December 2011, the Chinese government announced it would lift the country’s rural poverty line from 1,274 yuan per year in 2010 to 2,300 yuan, an increase of over 80%. This, once adjusted by the purchasing power parity of 2005, is equivalent to approximately US$1.80 per day, a threshold well above the US$1.25 used by the World Bank for international poverty comparisons.
Why is it important to redefine poverty lines in China and India?
The present debate and action on redefining the poverty lines of China and India is significant for at least two reasons. First, it signals a policy shift from ‘trickle down’ economics that emphasizes growth pure and simple, towards the notion ofinclusive or pro-poor growth. Second, by lifting the official poverty lines, the two countries have increased in principle the number of people that are eligible to receive support from social protection policies. If social protection programmes in the two countries prove to be effective in facilitating poverty exit, this could lead to a significant reduction in global poverty, even if less progress is made in sub-Saharan Africa, Latin America, and the rest of East and South Asia. However, the two giants face important challenges in that process, and we return to the policy issues in the second part of this Angle article next month.
Tony Addison is Chief Economist-Deputy Director, UNU-WIDER.
Miguel Niño-Zarazúa is a Research Fellow, UNU-WIDER.
Part 2 of this article follows in WIDER Angle February 2012.
WIDER Angle newsletter
January 2012
ISSN 1238-9544

Redefining Poverty in China and India: Making Growth more Inclusive,   Part 2

Tony Addison and Miguel Niño-Zarazúa
China and India are making immense strides in development. Growth in both countries has been impressive. But there is now much concern about whether impressive growth rates are yielding enough poverty reduction. The present debate about their poverty lines is a reflection of this. In this second part of a two-part article (first part featured in January’s Angle), we focus on more inclusive growth in these two Asian giants.
India and, especially, China have enjoyed rapid economic growth, with a median growth rate of 6% and 10% in the 1980-2010 period, respectively. This has catapulted the impressive growth in per capita gross national income (GNI) in the two countries: in 1980, the GNI per capita based on purchasing power parity (PPP) was in the order of US$430 in India and US$250 in China. By 2010, the two countries had increased their per capita income up to US$3,560 and US$7,570, respectively. The high growth rates in China are largely explained by the high gross capital formation over the past 30 years, which as a percentage of GDP fluctuated around the median of 38%, vis-à-vis 24% in India, although the investment gap between the two countries has narrowed in recent years.
A significant part of the domestic investment in China, about 20% of GDP, has gone to infrastructure projects, which is nearly 10 times more than the share of GDP invested in infrastructure in India. That has facilitated the accelerated rate at which the Chinese economy has transited form agricultural to manufacturing production. In India, the transition has been towards the IT off-shore service industry with as much as 60% of the labour force remaining engaged in traditional farming activities. 
Figure 2 Correlation between growth and poverty reduction in China.
Source: Authors’ estimations with World Bank data, available at PovcalNet
Economic growth is a necessary condition to rising per capital income, but it is nonetheless insufficient to guarantee a steady trend towards poverty reduction. In China, for instance, the relationship between economic growth and poverty reduction is far from being linear, with episodes of high economic performance in the 1990s accompanied with increases in the poverty rates (see Figure 2). In India, since the late 1990s the country has experienced the fastest economic growth, and yet the speed at which poverty is being reduced has decelerated. This tells us about the importance of public interventions in making growth more inclusive. Indeed, it is now well understood that policies that are designed to maximise growth can only trickle down to the poor if they are accompanied by wealth redistribution, employment opportunities, investments in human capital, and the provision of social protection for the most vulnerable groups in society.
Tacking growing inequalities
Spatial inequalities are particularly evident across China, with western and interior rural communities experiencing much weaker effects from economic growth than the eastern coastal provinces. UNU-WIDER’s World Income Inequality databaseshows that the Gini coefficients in China, which measure the income inequality ranging from zero for ‘perfect’ equality to one for maximal inequality, have been consistently higher in rural areas than in urban areas, despite the observed growing inequality in urban areas largely attributed to unregistered migration from the countryside to the cities. This, in combination with the fact that the national Gini coefficients are higher than both the rural and urban Ginis, indicates that the rural–urban divide is driving the growing levels of inequity in the country. In India, the Ginis have been consistently higher in the urban areas, with the rural–urban divide also growing over the last two decades. This is illustrated by the ratios of the rural to urban consumption expenditure that have declined from 0.63 in the early 1970s to 0.58 in the mid 1990s.
Fiscal policies have a lot to do with wealth redistribution. Tax rates in China and India are low, with most revenues coming from indirect taxes. This also reflects the low share of government revenues as percentage of GDP, which oscillates around 20%. This is in contrast with the average of 50% observed in OECD countries. Tax systems in both countries remain limited to maximising redistributive policies, and to a large extent, they will also limit the capacity of these countries to tackle extreme deprivation in the coming years.
Employment generation
China and India also face significant challenges in terms of employment generation. Rising unemployment is a driving factor in the incidence of poverty in urban areas in China, which has been exacerbated by market-oriented structural reforms and large migration flows of unskilled workers from rural areas to the cities. Migrant workers face exclusion from formal employment arrangements and state benefits such as housing, health and school subsidies, as well as income support from social protection schemes.
But the capacity of China to continue absorbing a larger share of the global consumer goods markets is becoming increasingly limited, with other emerging markets, including India, aggressively competing to get a share of the market. By the same token, it is unclear the extent to which the growing IT industry in India will be able to be the catalyst for a sustained growth, given the large unskilled labour force in the country that remains poor and disconnected from the booming economy.
Public service provision
China and India have made important progress in public service provision, which is associated with the reduction in the poverty rates observed in the two countries. The most recent Human Development Report (2011) shows that the respective Human Development Index (HDI) for China and India has grown at an average annual rate of 1.73% and 1.51%. But challenges persist. In rural China, for instance, accessibility to healthcare is largely financed by out-of-pocket expenses that absorb a large share of household expenditure among poor households. In India, there are serious concerns about the quality of public services, which are very low by international standards. When desegregating the HDI by its components, we also observe that in India both health and especially education indicators fall behind countries with similar per capita incomes. Evidence of schools without books and teachers, and health clinics without doctors and drugs is vast and disturbing. It also shows the importance of increasing public expenditure on the social sectors to improve the accessibility to, and quality of, health and education, and ultimately, reduce poverty.
Strengthening social protection
Social protection in the two countries remains highly fragmented. In China, the Minimum Living Subsidy Scheme, (also known as Di Bao) was introduced in 1997 to support the urban unemployed poor who had been affected by the market-based structural reforms. The programme remains limited as it excludes those who although in poverty are not registered in the civil affairs department office. As pointed out earlier, these are by large migrant rural workers who move to the city in search of livelihoods. In the mid 2000s, the Di Bao was gradually extended to the rural areas to cover nearly 42 million rural people, but the size of the transfers are unlikely to reduce the incentives to migrate to the cities. The rural Di Bao, together with the urban Di Bao, cover nearly 150 million people, which represents the second largest social protection programme worldwide in terms of scale and coverage, just behind India’s National Rural Employment Guarantee Scheme (NREGS).
The NREGS provides a guarantee of 100 days of waged employment per year to unemployed unskilled workers, currently covering nearly 48 million households, or about 240 million people. In fact, India’s social protection system is complex but incomplete. It spans from categorical and means-tested age and disability pensions, and income transfers for schooling and healthcare accessibility, to unemployment schemes such as the NREGS that rely on self-selection for the identification of beneficiaries and therefore exclude those who due to disability, illness, or age are unable to particulate in the scheme. The programmes are also unevenly distributed across the country, with many states and communities yet to be covered.
More co-ordination and institution building are clearly needed, but at the same time, social protection will only provide a sustained process of poverty reduction if it is supported by growth, redistributive policies, improvements in public service provision and employment opportunities. To the extent that the two countries will be able to address these challenges, poverty reduction will be significantly achieved on a global scale. The redefinition of the poverty lines gives us positive clues, but the final outcomes are yet to be seen.
Tony Addison is Chief Economist-Deputy Director, UNU-WIDER.
Miguel Niño-Zarazúa is a Research Fellow, UNU-WIDER.
WIDERAngle newsletter
February 2012
ISSN 1238-9544

Economic crisis and foreign aid

Repost from WIDER Newletter 

How Aid Supplies from Donor Countries Respond to Economic Crisis

Joanna Gravier-Rymaszewska
The strong interdependent relationship between the developed and developing countries made itself visible again with the recent economic downturn. Due to the now truly global character of the economy, the crisis did not only affect the North, where the first signs of crisis were seen in 2007, but also the South through decreasing trade volumes and investments. Concurrently, Official Development Assistance (ODA) is subject to a pro-cyclical trend. That is, it falls when the donors encounter an economic recession. In the presence of crisis, developing countries rely crucially on aid for their expenditures, while developed countries reduce aid volumes.
The interconnected crises of climate change and food provision also continue. The resulting self-amplifying triple crisis (finance, climate and food) confronts and overwhelms the South with economic hardship, rising food prices and more frequent climatic events like droughts and floods. The South increasingly relies on aid, and ODA remains the main channel for donor countries to assist development in the South. For the donors, the financial aspect of the triple crisis is crucial for their decisions on aid budgets. Aid is often one of the first items to be cut during fiscal restraint in donor countries.
It is important to understand how the crisis affects aid flows, and determine how financial, political and social forces within donor countries influence budgetary decisions on development aid.
The recent UNU-WIDER working paper ‘How Aid Supply Responds to Economic Crises: A Panel VAR Approach’ explores the channels and behavioural consequences of unexpected financial shocks on aid budgets. A simple theoretical consumption model is proposed to capture donor decisions on aid disbursements versus other variables: domestic social needs, financial conditions and political preferences. The evolution and magnitude of the response of aid flows to shocks applied to various macroeconomic variables including GDP, fiscal balance, unemployment, financial volatility, trade, etc can be observed due the dynamic approach taken. The study aims at determining whether the dynamics of aid vary for crises of differing severity, or before and after the crises, and if the relationship is purely economic or is also directly influenced by politics.
It is found that crises affect development aid budgets and their trend. This influence takes place through two channels: directly via lower revenues, and indirectly; by increasing fiscal costs, through exchange rates and financial volatility.
In aggregate, at the general level, there is a positive and significant relationship between ODA and GDP. That is, the higher the GDP of a donor country, the higher their development aid contribution. Prolonged recessions and banking crises have a lasting and negative effect on the behaviour of donors and aid supply. This relationship between aid and the donor economy is not of a purely economic nature, as the donor’s internal politics play an important role. The paper shows that models solely using donors’ economic and international strategic interests as determinants of their aid policy may not be complete. Donor countries’ own financial conditions as well as political determinants, such as the ideological inclination of donor governments, play an important role in the allocation of aid budgets. Furthermore, it seems to be that social conditions, for example unemployment and inflation rates, in the donor countries do not have an effect on the size of aid budgets. It seems that the types of parties in government drive decisions on development aid rather than any particular consideration of the social needs of the donor country’s population. Specifically, right-wing and center governments cut aid in response to  economic distress, while left-wing governments tend not to. Center parties are more driven by economic conditions than left- and right-wing governments, which tend to take aid budget decisions in accordance with their ideologies.
Financial factors also matter for aid. Stock market volatility increases aid uncertainty, while exchange rate movements due to crisis and the resulting appreciation of the dollar against other currencies depress the value of aid. Thus, exchange rate movements have a strong explanatory power on the variation in aid. However, increasing inflation in donor countries does not lead to contraction in aid budgets.
The results of the paper deepen the concerns about falling development aid. Contracting aid budgets in the North add to the spillover effects of the financial crisis onto the developing countries.
Joanna Gravier-Rymaszewska is Doctorate Researcher at Nanyang Technological University, Division of Economics in Singapore.
This working paper was prepared during a PhD research internship at UNU-WIDER and within the UNU-WIDER project
‘ReCom - Research and Communication on Foreign Aid’.
WIDERAngle newsletter
March 2012
ISSN 1238-9544

Monday, 26 March 2012

Report launch: BRICS reshaping global health

launch webcast.  New Delhi 26 March 11:30 am (archived)

Full Report

Global Health Strategies is proud to announce the launch of the inaugural report from our nonprofit affiliate – Global Health Strategies Initiatives (GHSi)
The report, entitled Shifting Paradigm: How the BRICS are Reshaping Global Health and Development, was released in the lead-up to the 4th BRICS Summit (28-29 March, New Delhi). It takes an in-depth look at the increasingly important roles Brazil, Russia, India, China and South Africa are playing to advance health and development in the world's poorest countries.
There is an urgent need for new resources and innovation in global health, and the world is looking to the BRICS and other emerging economies for greater leadership in these areas. As these countries invest more in global health and R&D, it is clear that their approaches differ from those of traditional donors and are shaped by their own experiences, philosophies and interests. It is also clear that the BRICS and other emerging economies will play an increasingly important role in driving access to new health technologies and services. 
Shifting Paradigm comprises part of a larger GHSi project focused on the intersections between major growth economies and global health. The report was launched by Sachin Pilot, Honorable Minister of State for Communication and Information Technology, at a special event in New Delhi that included a dynamic panel discussion on the role of the BRICS in foreign health assistance. Speakers and commentators at the event included:
  • Shyam Saran, Chairman, Research and Information System for Developing Countries; Former Foreign Secretary, Government of India
  • Carlos Passarelli, Senior Advisor, Treatment Advocacy, UNAIDS
  • Rani Mullen, Visiting Fellow, Centre for Policy Research
  • Pramit Pal Chaudhuri, Foreign Editor, Hindustan Times
  • Ashok Malik, Political Commentator
The launch was broadcast live online. You can view an archived version of the webcast and download the report and executive summary at GHSi's website:

Thursday, 22 March 2012

Geneva Health Forum, 18 - 20 April 2012 

GHF 2012 Edition

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A Critical Shift to Chronic Conditions: Learning From the Frontliners

Chronic diseases are of growing importance. While non-communicable diseases currently seem to be capturing the agenda, both chronic infectious and non-infectious diseases, pose major challenges to health systems in high and low-incomes countries in stable and emergency situations. The long-term nature of many chronic conditions warrants a comprehensive and sustainable health systems response that brings together a trained workforce with appropriate skills, affordable and reliable supplies of medicines and technologies, and empowerment of patients and communities. These new realties reflect the interplay of various factors such as changing lifestyles, economic development and urbanization. The need for a multi-sectorial response has never been greater. These challenges present new opportunities for science and technology to contribute to the improvement of access to health.
This year’s theme is the result of a consultative process involving hundreds of previous participants and partners. While there have been several calls to action, aiming at raising the profile of non communicable diseases, very little has been heard from those at the frontlines. Those, who are already active all over the world in this field, dealing with both chronic communicable and non-communicable diseases.
We intend to give them a voice and keep the health debates pragmatic and grounded in action.
We therefore welcome submissions along the entire health continuum- from upstream multi-sectoral policies for prevention (of chronic conditions) and related risk factors to downstream actions in the health sector for detection and treatment.
Click here for a detailed list of themes covered by the Geneva Health Forum 2012.
Click here to download the GHF 2012 1st Announcement 

Wednesday, 7 March 2012

Money or Die. A Watershed Moment for Global Public Health by Laurie Garrett in Foreign Affairs

Global health programs now teeter on the edge of disaster. The world economic crisis and the politics of debt reduction are threatening everything from malaria control and AIDS treatment to well-baby programs and health-care worker training efforts. And even if the existing global public health architecture survives this time of parsimony and austerity, it will have been remodeled along the way.
Prior to 2000, the links between global health programs in poor and middle-income countries and changing foreign policy priorities in wealthy nations were weak, largely because the programs themselves were just not that large. In 1999, for example, total health spending in developing countries -- for efforts ranging from clean water provision and government clinics to vaccination campaigns and HIV treatment -- was about $5.6 billion, with the United States government providing roughly a third of that and U.S. private donors another tenth. But over the next decade, the picture changed dramatically, driven by a continuing economic boom and alarm over the expanding AIDS pandemic. 
In the spring of 2000, the Clinton administration officially defined HIV and emerging diseases as national security threats, which expanded U.S. grounds for engagement in global health. At a major international conference that summer, former South African President Nelson Mandela framed equitable access to HIV treatment and prevention as the primary moral challenge of the twenty-first century. The call resonated with antipoverty activists, including the rock star Bono and the economist Jeffrey Sachs; health advocacy groups such as Médecins Sans Frontiers, Partners in Health, and ACT UP; and institutions such as the World Health Organization, UNICEF, and the United Nations AIDS Program. Microsoft founder Bill Gates and his wife, Melinda, stepped up their breathtakingly generous philanthropic efforts in global health through their Gates Foundation. And in his 2003 State of the Union address, U.S. President George W. Bush proposed a multibillion-dollar program to tackle AIDS in Africa -- an effort known as the President's Emergency Plan for AIDS Relief (PEPFAR). 
With the surge in public support for global health came increased attention from private individuals, corporations, and foundations, leading some to call the decade "the age of generosity." By 2008, global health enjoyed an estimated $16 billion pot of public-funding gold -- and with private funding and poor countries' own increased health spending included, the total spent on public health for the world's poor reached about $27 billion.
But then the global financial crisis hit. Countries, organizations, and individuals all felt the squeeze. Many severely reduced their giving. As Europe's economic situation has worsened, the region has reduced its overseas commitment-to-disbursements ratio for everything from famine relief to HIV treatment programs, undermining the credibility of both G-8 and G-20 pronouncements. With the exception of the Scandinavians, countries in the region have tended to view foreign aid in charitable terms, and, as a Brookings Blum Roundtable report noted, "Once global agreements have been couched in terms of charity, the failure to meet global targets can hardly be seen as scandalous because any efforts by the rich world, however small, are deserving of credit." Italy, which donated nearly $1 billion annually from 2001 to 2008, gave nothing in 2009 and has given almost nothing since. Greece provided more than $50 million in global health assistance in 2007 and now gives nothing. Iceland stopped making commitments and contributions in 2008, Portugal in 2009, and Spain in 2010. In 2009, 94 percent of all global health promises made by the European Union and its member countries were actually disbursed, but by the end of 2010 only 78 percent were, and the gap appears to have widened further in 2011.
Donor support to global health from all sources combined increased by roughly ten percent annually from 2002 to 2008. That growth began to slow in 2009 and fell to four percent in 2010. Final numbers for 2011 and 2012 are still being calculated, but it appears that growth has now stopped completely, and it is possible that a slight decline might actually have started. 
As important as the totals is the shift in donor composition. Total private donations excluding from the Gates Foundation have fallen from about $2 billion in 2008 to $1 billion in 2011. And global health spending by nongovernmental organizations (NGOs) and faith-based organizations dropped from $3.7 billion in 2008 to $2.5 billion in 2010. At this point, the two Washingtons -- Seattle and the District of Columbia -- are the last barriers to catastrophe. The Gates Foundation, now combining the philanthropic assets of the Gates family and Warren Buffett, is responsible for 68 percent of all private giving for global health, dwarfing the efforts of even the largest public or international institutions. And the United States government is responsible for 52 percent of all public giving. No other donors come close.
In 1948, the architecture of global public health was simple: The newly created World Health Organization, an independent agency in the broader UN system, dominated everything. For the next half century, the WHO took the lead, setting standards and providing most resources. Its efforts were complemented by those of some national donors, particularly the United States and France, and various other UN agencies and nongovernmental and religious institutions.
This situation began to change in 1990, when then WHO Director-General Hiroshi Nakajima ousted the leadership of the agency's Global Program on AIDS, at that point the only international effort to tackle the AIDS pandemic. The fracas spawned a cross-UN effort to build an alternative organization that might handle the issue better, and the result was the emergence in 1994 of the United Nations AIDS Program, which combined the HIV efforts of six UN agencies, including the WHO. This was followed soon afterward by the creation of the Global Alliance of Vaccine Initiatives (GAVI), a Geneva-based agency that coordinates dozens of UN, local government, bilateral, and private immunization efforts to ensure steady global supplies of affordable vaccines. WHO's immunization programs were put under the GAVI umbrella in 2000, and two years later the Gates Foundation's major public health-giving began, further eroding WHO's dominance. 
The year 2002 also saw the launch of the Global Fund to Fight AIDS, Tuberculosis, and Malaria, a Geneva-based multilateral organization that functions independently from the UN system but in close harmony with UN institutions; within a few years, it would be disbursing more than $2 billion annually, becoming the dominant financier of malaria and tuberculosis programs worldwide and the second-largest underwriter of HIV programs. Then PEPFAR's arrival in 2003 shattered the old order, bringing literally tens of thousands of new religious and secular organizations into the sector. Power followed the money, and by 2005 the annual World Health Assembly, which governs WHO, was convening to listen to Gates' suggestions, and today few policy initiatives or normative standards set by the WHO are announced before they have been casually, unofficially vetted by Gates Foundation staff.
If increased giving reshaped the sector's architecture, however, so has the recent reduction in revenue. The world has grown more dependent on U.S. public and private support, Europe has diminished its overall support and moved most of its remaining euros and pounds into GAVI and the shrinking Global Fund, and the WHO budget and influence is eroding further. The Global Fund's situation has grown so dire, with its commitments now outpacing actual revenues by nearly $6 billion and European support plummeting 16 percent in 2011, that in January its board called upon Executive Director Michel Kazatchkine to resign, replacing him with the retired Brazilian bank executive Gabriel Jaramillo. Since the shake-up, donor faith in the fund has been partially restored, with the Obama administration promising a 27 percent increase in U.S. support for FY 2013 (pending congressional approval). But logjams in disbursement have kept some African health groups from being able to pay their employees, and pharmaceutical outages have been reported in several countries.
The WHO is also facing problems. Director-General Margaret Chan is popular, and China's support for her is daunting, but the fact that her reelection bid is unopposed -- the first time in six decades that has happened -- is telling. Recently, 12 percent of the organization's headquarters staff was let go, and funding has dropped sharply. The WHO operates on two-year budget cycles, which peaked in 2006-7 at $5.4 billion; the current 2012-13 budget is down to $3.9 billion, for a decline of $1.5 billion. The biggest drop is in the agency's voluntary donations, which have fallen 50 percent since 2008. This grim picture worsened in the third quarter of 2011 as currency speculation drove the value of the Swiss franc up 32 percent against the U.S. dollar, forcing further staff reductions for an agency whose revenues are in dollars but payroll in francs. The WHO is still evaluating the full impact of this currency crisis. Chan has taken advantage of the budgetary stress to force much-needed major reforms, eliminating nonperforming divisions and refocusing the organization on core missions. But the budget crisis is sapping staff morale and undercutting some programs.
The fight against malaria might be the public health effort most endangered by the crisis. Thanks to an aggressive attack on several fronts, in recent years, cases of and deaths from malaria have plummeted worldwide, and some even dream of eradicating the disease entirely. But until an effective vaccine is ready for primetime, the fight against it requires steady vigilance and financing. The bed nets that protect sleeping babies from biting mosquitoes must be replaced periodically; supplies of antimalarial medicines must be replenished; mosquito elimination programs need to be adequately funded. The battle has been waged with money from the Global Fund, but that outfit is now deep in the hole and unable to offer new support until 2014. Many existing ant-malarial programs will be able to survive until then, but some older ones are set to expire earlier, and new or expanded ones would be extremely useful. Where additional money will come from is unclear. Awa Marie Coll-Seck, the executive director of the WHO-based Roll Back Malaria Partnership, predicts that "today's gains will be reversed, and we will lose many more lives to this disease."
The fight against tuberculosis faces similar problems. As with malaria, successes in controlling tuberculosis are quickly reversed when targeted programs cease -- and here the danger of stop-and-start efforts is even greater -- since interruptions in eradication programs lead directly to the development of drug-resistant bacteria. Thanks to the earlier surge in financing of TB programs, according to the WHO, 200,000 fewer people died annually of the disease in 2009 than in 2003. But about 80 percent of this victory was attributable to Global Fund support, and disbursements plummeted in 2010. While the net number of tuberculosis cases fell, moreover, the burden of multidrug-resistant disease skyrocketed, largely as a result of suboptimal or interrupted treatment. By the end of 2011, according to combined UN agency reports, about 85 percent of highly drug-resistant TB cases were going completely untreated, allowing community spread of the mutant strains.
The one bright spot on the global public health landscape is vaccination programs, which are promising, well-funded, and backed by powerful political interests. Thanks to GAVI's efforts, vaccine-preventable diseases in children have plummeted and millions fewer youngsters now die every year from such things as measles, pertussis, polio, and diphtheria. And new vaccines are being rolled out to help prevent bacterial pneumonia, cervical cancer in women, and viral diarrhea in children. Because of its successes and potential, GAVI has attracted a great deal of donor interest even during these hard times; it is now the most financially solvent outfit in the field. 
On November 8, 2011, U.S. Secretary of State Hillary Clinton called on the United States to go beyond PEPFAR's original bold vision and aim to create an "AIDS-free generation" worldwide. This would be "one of the greatest gifts America could give the World," she insisted, adding, "HIV may be with us in the future, but the disease it causes need not be. Investing in our future would be the smartest investment we could make." The goal could be attained, she said, by throwing resources and human talent at three objectives: reducing mother-to-child transmission through the provision of antiretroviral drugs, reducing sexual transmission through the funding of male circumcisions, and accelerating prevention by providing treatment to already infected populations.
All this would take several billion additional dollars annually -- more than the U.S. Congress has allocated to date and certainly more than it is likely to favor in the future, given concerns about excessive public spending and debt. Republicans in the House of Representatives have been lukewarm about foreign aid and global health programs. Florida Representative Ileana Ros-Lehtinen (R-Fla.), for example, the chair of the House Committee on Foreign Affairs, has suggested that these are "misplaced priorities," asking, "What is the return on our investment?" During the FY 2012 Continuing Resolution squabbles, the House Republicans sought to slice $700 million out of global health spending; the Senate did not agree. In December 2011, House Republicans suggested the FY 2013 budget should reflect a 13 percent cut in all foreign assistance spending. Republican presidential candidates Mitt Romney, Ron Paul, and Newt Gingrich have called for severe cuts in foreign assistance spending as part of a general drive to reduce the federal debt and deficit. (Rick Santorum, in contrast, has called for expanding global health and humanitarian aid, chiding the others for "pandering to an anti-foreign-aid element out there.")
Ironically, such objections to the expansion, or even maintenance, of the existing U.S. foreign assistance budget, come at a time when aggressive measures have been taken to rein in waste, improve efficiency, and measure outcomes. The Obama administration has pushed through significant reforms of USAID, PEPFAR, and other agencies, shifting global health programs from the NGO and consultant-focused efforts that marked the early days of PEPFAR to direct government-to-government planning and execution. The administration has also bolstered local decision-making, training, and ownership of these efforts, trying to help developing countries follow South Africa's unfolding example of reducing external donor support and make HIV and other public health efforts locally funded.
These moves, together with similar ones on the part of some other donor countries, as well as economic growth in some recipient countries, hold out hope that public health efforts in poor countries can eventually be weaned off their dependency on rich countries' fickle largesse. But that will take years, perhaps even decades. In the meantime, the structure of global health efforts is like a house of cards, highly vulnerable to prevailing winds. In 2011, for example, ministries of health throughout the African Great Lakes and East African region were dependent on external sources for 15 to 40 percent of their basic budgets. Their great recent achievements in HIV treatment, malaria prevention, tuberculosis care, maternal survival, and child health would likely evaporate were donor dollars to disappear.
In relative terms, the funds required are not large. Combined charitable giving for all causes by individuals in the United States and the United Kingdom hit $300 billion in 2011, but the bulk of this giving goes to domestic issues, and what goes to foreign causes is often dominated by surges of support for relief efforts for shocking natural disasters. Total estimated expenditures worldwide on health care in 2010, meanwhile, hit $5.3 trillion, with U.S. domestic spending accounting for nearly half of that. Even at its recent peak, the amount of money spent on the health of the world's poorest people, who suffer most of humanity's infectious and preventable diseases, represented merely .0005 percent of worldwide health spending. 
Like it or not, the burden of reducing suffering and increasing the health of the world's poor now falls largely on the backs of the two Washingtons. The Gates Foundation is doing extraordinary work, but it operates without accountability or transparency and needs competition. Bill Gates has admitted as much himself in multiple interviews, acknowledging that his efforts wield an uncomfortably large amount of unchallenged power over global health. So far, Congress has spared global health drastic budget cuts, but the White House 2013 budget request signals that pressure for reductions is building. It would be a catastrophe were the "age of generosity" to end so soon after it began, leaving millions without life-sparing medicines and tools they have come to rely upon.

Tuesday, 6 March 2012

Rising Stars in Global Health - funding for developing country researchers

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Rising Stars in Global Health


This program aims to tap into the creativity, knowledge and skills of emerging innovators from low- and lower-middle income countries to solve some of the most persistent health challenges in the developing world through scientific/technological, business, and social innovation. We call this approach Integrated Innovation.
We are looking for innovative ideas to address complex real-world challenges that involve a scientific or technological solution (new or existing) alone or in combination with social and/or business innovations.
From a Social Innovation perspective – are there social innovations (including health systems, the determinants of health, ethical/social/cultural/legal frameworks, public policies, leadership and human resources among others) that will be necessary to bring the scientific/technological solutions that are developed to scale in local communities in an appropriate manner?
From a Business Innovation perspective – are there appropriate business systems in place to produce and deliver the scientific/technological solution at an affordable pricepoint?
Application Deadline: March 23, 2012 at 11:59 p.m. EDT
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