Investing in Health for Economic Development

At the UN Millennium Summit in September 2000, 180 world leaders pledged to achieve significant advances in the well-being of the world's poor by 2015. Several of the key Millennium Development Goals (MDGs) relate to health, in particular controlling epidemic diseases and reducing the death rates of mothers in childbirth and young children. To further the Summit's goals, Dr. Gro Harlem Brundtland asked me to head a Commission on Macroeconomics and Health with the aim of charting a path for the world to achieve those MDGs in health and poverty reduction. Our Commission released its findings on December 20th.

Our Commission grappled with the challenge of burgeoning epidemic diseases that are ravaging the poorest countries of the world, especially in Sub-Saharan Africa. Despite a considerable diversity of views at the outset of the two-year investigation, the Commission reached a strong consensus after examining extensive evidence from around the world.

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The core findings are easily summarized. First, the disease burden in the poorest countries constitutes a fundamental barrier to their economic advance. Second, millions of impoverished people die tragic deaths each year from infectious diseases that are preventable and treatable simply because they lack access to the needed health services. Third, using existing technologies, it would be possible to save 8 million lives per year by the end of the decade, but only if rich countries help poor countries to obtain these technologies.

Specifically, the Commission calls for rich countries to put aside one tenth of one percent of their gross national product - or just one penny out of every ten dollars of income - on behalf of health services for the world's poor. Since the combined income of rich countries is around $25 trillion per year, this would mobilize $25 billion per year which, when combined with the poor countries' own increased contributions, would dramatically improve the health conditions of the world's low-income countries.

This modest contribution would save 21,000 lives daily in the poor countries. Moreover, the contributions to health would translate into huge economic strides. Improved health conditions would help the poor countries to escape from the poverty trap in which they have been stuck for the past decade: poor health has led to poverty and economic stagnation, which in turn has led to poor health.

If the program is adopted, countries with high fertility rates and rapid population growth will move towards lower fertility rates and slower population growth as households gain confidence that their children will survive to adulthood. Population pressures will ease, as will the strain on fragile tropical ecosystems. Foreign investors will be able to invest in an African labor force no longer shattered by disease. The economic benefits would be more than $360 billion per year from 2015-2020, many times the annual costs of increased health outlays under the program presented in the Report.

The substantial benefits of donor aid for health have already been demonstrated. Unlike some types of aid, where the assistance can be funneled to offshore bank accounts, assistance for health comes in the form of drugs, diagnostic tools, and salary support for doctors and nurses.

Smallpox was eradicated even in the most remote impoverished countries; polio is well is on its way to eradication. Immunization campaigns, when properly funded, have reached huge proportions of very poor children. Recent efforts against African River Blindness, leprosy, and trachoma, backed by industrial leaders such as Merck, Novartis, and Pfizer, have also performed wonders. The main problem is that the scale of worthy efforts has been a shadow of what is needed.

The Commission notes that R&D investments directed at the diseases of the poor are likely to have enormous social returns, not only because of recent breakthroughs in science (such as the mapping of the malaria parasite genome), but also because so little is currently invested in these areas. Malaria accounts for roughly three percent of the world's disease burden but attracts just one-sixth of one percent of global R&D outlays in biomedical research, largely because most malaria victims are impoverished and therefore ignored by private industry. The Commission advocates a series of measures to boost R&D into diseases of the poor, including donor R&D outlays of roughly $3 billion per year, or five percent of the global total.

The new Global Fund to Fight AIDS, Tuberculosis, and Malaria, which was initiated by U.N. Secretary General Kofi Annan earlier this year and will begin operation in 2002, can be a critical mechanism here. Programs will be conceived at the country level and will be submitted to the new fund for financial backing. The Commission calls on each potential recipient country to establish national-level commissions to set long-term health priorities and strategies worthy of donor backing.

The paradox of the global economy is that rich countries are now so rich and poor countries so poor that even small contributions from the rich can perform wonders. A penny on ten dollars would make historic breakthroughs in health; another penny on ten dollars could address the critical needs in education as well. The idea of controlling epidemic disease and cutting absolute poverty sharply by 2015 is not naïve idealism, but hard-headed thinking amply supported by the best evidence. The Commission on Macroeconomics and Health launched its Report on December 20 optimistic that the great battle against disease and poverty will now be joined in earnest.