Saturday, May 29, 2010

Persistent poverty ... needed to justify the perpetuation of the donor and development assistance industry!

Dear Colleagues

Why has international relief and development assistance become little more than a huge "welfare" system with a huge proportion of the world's population ... maybe half ... and indeed countries ... being funded by the other half.

This is a fatally flawed model for development success ... and it is no surprise that over a very long time ... something like 60 years, the progress of relief and development has been glacial no matter how much money has been mobilized.

The sad reality is that a lot of people have been well remunerated in administering this welfare arrangement ... and will continue in this mode ad infinitum unless there is a substantial paradigm shift.

A recent report issued by Medecins sans Frontiere (MSF) ... in English, Doctors without Borders ... is complaining that global health funding needs to be sustained at very high levels to ensure that access to AIDS treatment can be maintained at an adequate level. And while the issue of access to treatment is well taken ... the question of where the money for this should be coming from needs to be looked at from a better perspective. The MSF essay is to be found at: The text is copied at the end of this posting.

The key question that needs to be answered is why is it that so few people are able to afford the cost of adequate health care! Why are so many people poor, hungry, badly educated and unhealthy? Why are decision makers so ineffective when looked at from the perspective of society? What on earth is so wrong?

The prevailing enterprise system that is a mix of capital market, free enterprise and oligarchy ... and the prevailing systems of subsidy, official development assistance, and international finance make it possible for decision makers to design programs where there is personal and organizational profit without societal progress. It is a dysfunctional system when looked at from the perspective of the people of the planet, but almost perfect for those that are in control.

There is something fundamentally wrong when, in order for people to have access to health services there has to be external funding from "donors". An economic system that is working effectively should be able to deliver service that are able to be paid for by beneficiaries ... and the service should be affordable ... which in turn means that the beneficiaries should be in a society where remuneration is reasonable.

With more than 4 billion people poor and hungry ... there is a huge challenge to be addressed. This argues for development investment that changes the "business model" being used for global socio-economic development and the approach to development assistance. People must have opportunity to be remunerated, and important needs have got to be available at affordable profitable prices. Society must have productive value adding activities that make it possible for people to be remunerated and able to pay for what they need.

This is a big change from what has been the norm for the last several decades ... and big change is needed. This is going to be done in due course with the help of better socio-economic metrics ... more cost efficiency, more value efficiency (vefficiency) so that economic activity creates more improvement in people's quality of life!

While not-for-profit organizations do good work ... whether or not they have cost efficiency and value efficiency is never part of the analysis. This needs to change. Getting more money from donors is essential for organizational survival, but ultimate socio-economic progress is when donors and implementing organizations are not needed and the local economic activity allows what is needed to be purchased with locally earned income.

Change is not easy! There are a lot of people who are well remunerated throughout the global economy that benefit as long as poverty persists. With persistent poverty, there is a need for donors and government programs and the associated intermediaries and organizations ... and all the incentive in this value chain is to maintain the failed status quo! Not a good situation!

Peter Burgess

Backtracking by international donors in funding HIV/AIDS risks undermining years of positive achievements and will cause many more unnecessary deaths, warns humanitarian aid group Médecins Sans Frontières (MSF) in a new report.

Titled 'No time to quit: HIV & AIDS treatment gap widening in Africa', the report (download here) builds on analyses made in eight sub-Saharan countries to illustrate how major international funding institutions such as PEPFAR, the World Bank, UNITAID, and donors to the Global Fund have decided to cap, reduce or withdraw their spending on HIV treatment and antiretroviral drugs (ARVs) over the past year and a half.

'How can we give up the fight halfway and pretend that the crisis is over?' said Dr. Mit Philips, Health Policy Analyst for MSF and one of the authors of the report. 'Nine million people worldwide in need of urgent treatment still lack access to this lifesaving care - two thirds of them in sub-Saharan Africa alone. There is a real risk that many of them will
die within the next few years if necessary steps are not taken now. Also, the current donor retreat will prevent more people from accessing treatment and will threaten to undermine all the progress made since the introduction of ARVs.' The US President's Emergency Plan for AIDS relief, PEPFAR, reduced its budget for the purchase of ARVs in 2009 and 2010, and also introduced a freeze on its overall HIV/AIDS budget. Other donors, such as UNITAID and the World Bank, have announced reductions over the coming years in the funding for antiretroviral drugs in Malawi, Zimbabwe, Mozambique, Uganda and the Democratic Republic of Congo (DRC).

The Global Fund, the largest funding institution in the fight against HIV & AIDS, faces a major funding shortfall. The US, the Netherlands and Ireland have already announced that they will be providing lower contributions to the Global Fund. In 2009-2010, contributions to already approved country grants were reduced by 8 to 12 percent.

Overall funding cuts have translated into a reduction in the number of people able to start their ARV treatment, as seen in South Africa and Uganda, and in DRC - where the number of new patients able to start ARV treatment has been cut six-fold. Already fragile health systems will
become increasingly strained by an increasing patient load requiring more intensive care.

Drug stock-outs and disruptions in drug supply are already a reality, and will become more frequent if sufficient funding is not made available. MSF has recently been requested by the government and other actors to assist with emergency drug supplies in Malawi, Zimbabwe, DRC, Kenya and Uganda.

'If there is reduced funding, then it will mean more people will die, and we will have more orphans,' said Catherine Mango, an HIV patient from Kenya. 'The ones that are positive often need to assist others, like their children. People will lose hope and die. It will be the end. If there are no drugs there is no future.'

ARV treatment is lifesaving but also lifelong. This means that the number of patients under treatment increases cumulatively each year, thus requiring incrementally growing and sustainable funding.

'The HIV & AIDS crisis remains a massive emergency that still requires an exceptional response. MSF calls for a sustained and renewed commitment by donors and national governments in the fight against HIV & AIDS, so that this disastrous public health crisis can be addressed appropriately,' concluded Dr. Philips.
Seco Gerard
Analysis and Advocacy Unit, Gen. Dir.
Medecins Sans Frontieres
Operational Centre Brussels (OCB)
+32 2 475 36 34

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