European perspectives on global health: a policy glossary

More documents

Recommendations

Info

3. Europe must assert its role in global health governance issues and list other options like global taxes, for example : on currency transactions, carbon emissions, airline tickets, weapon sales or profits of Transnational Corporations ( TNCs ), voluntary contributions ( e. g. a global lottery, donations ) or further debt relief. They state that these possible financing mechanisms should be additional to existing financing ( and point to the danger of a crowding out of traditional ODA spending on health ), that it is necessary to balance between conditionality on the one hand and the need for sustainable and predictable financial flows on the other hand, that issues of donor harmonisation, governance and participation of southern actors should be addressed, and that possible new mechanisms should be discussed in the context of debt relief and trade reform. Among the most prominent of these suggestions is the so-called Tobin Tax or currency transaction tax ( CTT ), a global tax on currency transactions. The idea behind this tax is twofold : to reduce speculation and volatility in currency markets, and to generate revenues that could be used for global development purposes. It is estimated that a universal currency transaction tax of 0.1 % could yield $132 billion per year and a pure <strong>European</strong> tax ( given the political resistance especially of the US and Japan ) would still generate revenues of $16 billion per year. If a two-tier system were to be introduced, with a second, muchhigher rate applying when price movements exceed a pre-established limit, revenues could even triple. Until now only Belgium and France have adopted legislation on a CTT ; however, this will not come into force without the participation of other EU states. Another promising option is a tax on airline tickets. At the UN Millennium+5 Summit in September 2005, the “Lula group” persuaded 66 countries to support such a proposal and to sign the “Declaration on Innovative Sources of Financing for Development”. The <strong>European</strong> Commission also released a staff working paper that analyses how a contribution on airline tickets might be used by EU Member States as a source of development aid. Depending on how many EU states participate and whether governments make the tax voluntary or compulsory for passengers, it could raise between 568 and 2,763 million euros annually. So far 13 countries have either proclaimed their intention or taken corresponding decisions, among them 4 <strong>European</strong> countries ( France, Norway, Cyprus and Luxembourg ). One new mechanism that was introduced recently is the International Finance Facility for Immunisation ( IFFIm ), a pilot scheme in support of the GAVI. The idea behind it is to leverage additional money from the international capital markets by issuing bonds, based on legally-binding longterm donor commitments. This pilot project should demonstrate that it would also be possible to realise a larger IFF that could raise up to $50 billion per year. The support for that initiative, however, is limited so far as the principle of frontloading ODA through capital markets is perceived increasingly critically by governments and NGOs. Another new mechanism to add to global health financing is Public-Private Partnerships. They can promote cooperation between state and non-state actors both from the national and international level and contribute to the funding of global public goods and the development of a “new public finance”. While most of the money for GPPPs comes from public sources, private foundations play an increasing role. The Bill & Melinda Gates Foundation has committed more than $6 billion in global health grants to organisations worldwide, with a large share going to GPPPs. Recent studies estimate that GPPPs currently contribute to 2.2 % of all ODA ( with a growth from $1.41 billion in 2000 to $2.47 billion in 2003 ) and that they make up for nearly 14 % of all international funding in some developing countries. GPPPs’ commitments in many African countries exceed 1 % of GDP and 5 % of government consumption expenditure. Thus the consequences of GPPPs for macroeconomic stability and the question of the added value of these funds have to be discussed. Among the most prominent GPPPs is the Global Fund to Fight AIDS, Tuberculosis and Malaria ( GF ), which became operational in January 2002. By February 2006 it had approved $4.9 billion to support programmes in 131 countries and received pledges of more then $8.6 billion up to 2008. The GF is the leading financing mechanism in the case of tuberculosis and malaria, where it contributes 66 % and 45 % of all international funding, respectively. In the case of HIV / AIDS, the GF strongly interacts with other financing institutions like the World Bank and 42 <strong>European</strong> Foundation Centre – <strong>European</strong> Partnership for Global Health
3. Europe must assert its role in global health governance the bilateral agencies and makes up approximately 20 % of all international funding. It originally aimed at an additional contribution of $15 billion / year. It became clear, however, that it would not be able to mobilise that amount of resources and the latest calculations estimate a need for $3.5 billion in 2006 and $3.6 billion in 2007. In order to meet these needs, additional pledges by donor countries and by private actors will be necessary. A number of key issues are beginning to emerge which put into question some of the financing mechanism issues raised above : they would need to be part of an intensive discussion at <strong>European</strong> level and are therefore mentioned only in passing. They include : the effectiveness of the foreign aid mechanism, the balance between funding development in health and global public goods for health ( such as global disease surveillance systems ), the need to fund good global governance infrastructures, the problematic approach to programme funding that can reduce investments in health systems, the importance of direct private investments in countries compared to foreign aid, the role of debt relief in freeing up resources to support health within a country and the opening of <strong>European</strong> markets – such as in agriculture – to allow poor countries to compete. Action : Europe should embark on a critical assessment of financing for global health and develop a common approach to international cooperation in support of global public goods and in support of foreign aid. It should explore new financing mechanisms ( possibly like the carbon tax ) to ensure the three strategic priorities of global health : security, equity and good governance. References Atkinson, A. ( ed. ) : New Sources of Development Finance. New York : Oxford University Press, 2004. Commission on Macroeconomic and Health. Macroeconomics and Health : Investing in Health for Economic Development. Geneva, 2001. Delcour, Laure, Vellutini, C. Added Value of Global Partnerships and Global Funds to Development Cooperation. Brussels, 2005. Devarajan, S., Miller, M.J., and Swanson, E.V. Goals for Development. History, Prospects, and Costs. Policy Research Working Paper 2819, Washington, DC : World Bank, 2002. <strong>European</strong> Union. Commission of the <strong>European</strong> Communities. New Sources of Financing for Development : A Review of Options. Staff Working Paper, April 2005, SEC( 2005 ) 467. Brussels, 2005. <strong>European</strong> Union. Commission of the <strong>European</strong> Communities. An analysis of a possible contribution based on airline tickets as a new source of financing development. Staff Working Paper, June 2005, SEC( 2005 ) 733. Brussels, 2005. Kaul, I. and Conceicao, P. ( eds. ) The New Public Finance : Responding to Global Challenges. New York : Oxford University Press, 2006. ( Published for the UNDP ) Landau, J.P. ( ed. ) New International Contributions to Finance Development. Paris : Groupe de travail sur les nouvelles contributions financiers internationals, 2004. United Nations Millennium Project. Investing in Development : A Practical Plan to Achieve the Millennium Development Goals. New York : Earthscan, 2005. Oxfam. Last Chance in Monterrey. Briefing Paper No. 17, March 2002. Pearson, M. Economic and Financial Aspects of the Global Health Partnerships. DFID Study Paper. London, 2004. Spahn, P. On the Feasibility of a Tax on Foreign Exchange Transactions. Bonn, 2002. Technical Group on Innovative Financing Mechanisms. Action Against Hunger and Poverty ; Report of the Technical Group on Innovative Financing Mechanisms. Brasilia, 2004. Vandemoortele, J. Are the MDGs Feasible ? New York : UNDP, 2002. Zedillo, E. ( ed. ). Financing for Development : Report of the High-Level Panel on Financing for Development. New York : UN, 2001. Global Health Policy Glossary 43
Page 2 and 3: This policy glossary was produced w
Page 4 and 5: 4 European Foundat
Page 6 and 7: Foreword To enable Europe to play a
Page 8 and 9: Introduction the expenditures on ar
Page 10 and 11: 1. Europe must make global health a
Page 20 and 21: 2. Europe must include global healt
Page 36 and 37: 3. Europe must assert its role in g
Page 50 and 51: 4. Europe must establish a societal
Page 60 and 61: 5. Europe must act now for global h
Page 70: About the Editors Ilona Kickbusch s

European perspectives on global health: a policy glossary

Create successful ePaper yourself

Delete template?

Save as template?