World Bank, IMF held responsible for health crisis in Africa.
A new report documents how the policies of the IMF and World Bank have eroded healthcare systems in Africa, undermining access by the poor to this essential service.
by Jim Lobe
WASHINGTON: Policies pushed by the World Bank and the International Monetary Fund (IMF) on debt-strapped African countries over the past two decades bear major responsibility for the region’s health crisis, including the devastating spread of HIV-AIDS, according to a new report by a major US-Africa advocacy group.
Africa Action, a merger of three grassroots anti-apartheid groups, charged that structural adjustment programmes (SAPs) backed by the Bank and Fund wreaked havoc on African health budgets and systems, while more recent efforts to rely on “user fees” to fund healthcare have made it much more difficult for the majority of Africans who are poor to gain medical help.
And while the Bank has recently increased its health funding, for HIV/AIDS programmes in particular, the staggering debt burden carried by most African countries, which so far has been inadequately addressed by the IMF and the Bank, represents a major obstacle to real progress, the report said.
“The policies of the World Bank and IMF have eroded Africa’s healthcare systems and intensified the poverty of Africa’s people,” said Salih Booker, executive director of Africa Action. “These institutions must be made accountable for their role in causing the worst health crisis in human history, which Africa now faces.”
The report, “Hazardous to Health: The World Bank and IMF in Africa,” was released on 18 April, in advance of the 20-21 April spring meetings here of IMF and Bank governing committees. As in recent years, the meetings attracted dozens of non-governmental organizations (NGOs) and globalization activists long critical of SAPs and other Bank-IMF initiatives.
The two agencies, which together provide some $35 billion in loans to poor countries per year, have increasingly made their lending conditional on the implementation of policy reforms by borrowing countries. Those policy conditions - which have often come in the form of SAPs - are generally intended to increase the integration of the borrowing country into the global economy and make it more attractive to private and foreign investment. Among other measures, SAPs, which have been applied to more than 90 borrowing countries over the past two decades, are aimed at cutting government expenditures; privatizing state-owned companies; liberalizing trade and financial regimes; and expanding exports.
NGOs have long argued that such policies are ruinous to the poorer and more vulnerable sectors in developing countries, especially because governments under pressure to reduce spending usually begin with cuts to health, education, other social programmes, and food subsidies on which the poor often depend.
Ailing health services
That was the case in sub-Saharan Africa during the 1980s and early 1990s, according to the report, which noted that health systems of many of these countries had recorded major successes in reducing infant and maternal mortality rates and training medical personnel and teachers in the years that followed independence from European powers.
A combination of rising world oil prices and interest rates and falling prices for their export commodities during the late 1970s and early 1980s, however, forced many of these same countries to go to the Bank and the Fund for loans needed to service a growing debt burden.
Many studies conducted over the past decade have shown that SAPs have hurt the poorest sectors hardest by diminishing their access to basic services.
Indeed, a seven-nation study (SAPRI) released in mid-April on the impact of SAPs, undertaken jointly by the Bank and an international group of NGOs known as the Structural Adjustment Participatory Review Initiative Network, concluded that “poverty has been further deepened by the inability of the poor to access essential services at affordable rates.”
In Africa, the impact on access to healthcare has been particularly dramatic, as even the Bank now concedes.
In the 42 poorest countries in Africa, for example, spending on healthcare fell by 50% during the 1980s, by the end of which public-health experts were beginning to recognize the potentially devastating impact of the HIV-AIDS pandemic in Africa.
Ironically, even as healthcare systems were being dismantled and the potential impact of the virus understood, the amounts of money paid by African governments to foreign creditors, including the Bank and the IMF themselves, continued to increase. “By the 1990s, most African countries were spending more repaying foreign debts than on health or education for their people,” according to the Africa Action report.
The Bretton Woods agencies’ answer to the growing crisis in healthcare, however, remained consistent with the market-based approach of structural adjustment. Instead of reducing the debt and systematically rebuilding governments’ ability to provide health services, the Bank recommended privatization in the form of user fees for health services; the promotion of health insurance schemes; and increased investments in private care.
“The introduction of market principles into healthcare delivery has transformed healthcare from a public service to a private commodity,” according to the report. “The outcome has been the denial of access to the poor, who cannot afford to pay for private care.”
The Bank recommended the adoption of systems whereby user fees for healthcare would be applied only to patients who could afford them. But these schemes have been found by a series of UN and other studies to be either non-existent or ineffective.
As NGO criticism of the Bank’s and IMF’s strategies gained momentum during the latter half of the 1990s, the Bank has increased funding for health and HIV/AIDS programmes in Africa and tried to distance itself from user fees, especially after the US Congress passed legislation in 2000 calling on the US representative on the Bank’s board to oppose the use of user fees for primary healthcare and education.
In a current policy statement, the Bank says it “supports the provision of free basic health services to poor people,” and discourages user fees in cases of immunization, maternal and child care, and efforts specifically targeting tuberculosis, HIV/AIDS and certain other diseases.
Whether the Bank is strictly adhering to this policy in practice is difficult to ascertain, according to the report, which stresses that the IMF, which often determines the policy framework for SAPs, remains committed to user fees for a range of services, including for healthcare.
Moreover, new lending for health and education - a major thrust of the Bank’s response - “can achieve little when the debt burden of most African countries is already unsustainable,” according to the report, which calls for both debt cancellation as well as additional funding for health and education in grant form. (IPS)