THE DEVELOPING WORLD

Summer 2010

by Philippe Douste-Blazy

The global economic crisis has made the goal of saving the world’s poor slip from difficult to very doubtful. But former French foreign minister Philippe Douste-Blazy says the situation could easily be saved by widening the use of cheap but widespread travel taxes

“A child dies every 3 seconds, a mother every minute. We have no time to lose.” With these chilling words, leaders from the Netherlands, Norway, Tanzania and the World Bank called not long ago for urgent international action on innovative financing to protect child and maternal health and uphold the UN Millennium Development Goals (MDGs) adopted back in 2000 to help lift the developing world out of poverty.

The global economic crisis has claimed many victims. Companies have been bankrupted and their employees thrown out of work; people have seen their lifetime savings evaporate and their house values plummet; governments are still struggling to respond adequately, and millions around the world have seen their dreams and aspirations crumble.

But nowhere have these repercussions been as devastating as in the developing world. The setback to the fragile progress of recent years, particularly in Africa, now threatens to throw many millions back into the extreme poverty from which they had just managed to escape. As well as the very real prospect of enormous human suffering, severe economic, political and social pressures now threaten to overwhelm developing countries and trigger destabilisation and conflict on an unprecedented scale. The widening gap between the world’s rich and poor countries – highlighted by the internet – is inflaming tensions that point ominously toward catastrophic global confrontation.

What makes today’s downward spiral particularly disheartening is that the economic crisis has hit at a time of the first glimmerings of progress, notably in health. Since 2000, the rate of people dying from AIDS has declined, child-killing diseases like malaria and measles are being tackled more effectively, universal primary education is inching forward and the targets for safe drinking water are in sight.

Now, though, the global economic crisis is sapping developed countries' already shaky efforts to fulfill their MDG commitments for official development assistance (ODA). Investment from these donor countries is falling short warns a United Nations report by $35bn a year from the goal of $150bn in annual investment appear. There is now very little chance that the MDG targets can be sustained in the long run.

The consequences of this fall-off in ODA are already dramatic; the numbers of people going hungry and in extreme poverty is now far greater than before, and the same is true of the unemployed, those who work in fragile jobs or earn less than $1.25 a day. The progress that had been made in health and literacy is being undermined. World Bank data shows that 200,000 more children under the age of five than before have died because of economic downturn.

Childbirth mortality is killing 536,000 women a year, and maternal health is also the one Millennium goal that has stagnated even since the launch of the MDGs 10 years ago. It is a shameful discredit to humanity that 99% of these deaths are in developing countries. As we listen to the clock tick, remember that another minute means one less mother. And in a world torn by tension, hate and conflict, each woman less reduces our planet’s source of social cohesion, stabilisation and healing.

So should we despair of achieving the MDGs, not just by the original deadline of 2015 but even in this 21st century? Viewed through the traditional ODA prism, with its one-year budgets, public finance constraints and competing national priorities, there seems little cause for optimism. But there is another approach that would replace the traditional paradigm with an internationally-accepted model that has a proven record of success, particularly in health. Innovative financing mechanisms offer the means of tapping incrementally into global financial flows without disrupting economic activity. Among the best-known examples is UNITAID, a UN-sponsored international drug purchase facility funded largely through a small fee added to airline tickets that has raised $1.5bn since 2007. This reliable funding source has spearheaded the fight on the three health-related MDGs: treating and fighting life-threatening diseases like HIV/AIDS, malaria and tuberculosis; reducing childhood mortality and improving maternal health.

As provider of funding in 93 countries around the world, UNITAID today finances drugs for three-quarters of the children around the world who receive anti-retrovirals. This widespread coverage has been achieved through the influence UNITAID is able to exert on the price of life-saving drugs by guaranteeing a market through long-term commitments for high volumes of medicines and diagnostics – a commitment made possible by the sustainable and predictable funding of the 'air tax.' The price of anti-retrovirals has thus been cut by more than 50%. UNITAID also is attacking childbirth mortality through UNICEF’s extensive program for eradicating mother-to-child HIV transmission by screening 4m African women and providing tri-therapies treatment to 500,000 pregnant women worldwide by the end of 2010.

UNITAID is now building on this success by teaming with the Millennium Foundation to give individuals a chance to help fight major diseases through micro-contributions. An innovative fundraising mechanism called Voluntary Solidarity Contribution will soon allow air travellers and others to make a voluntary micro-donation to UNITAID simply by checking a box when buying, say, a plane ticket, and adding $2 to the total cost. The ‘air tax’ currently applies to only 7-10 % of all airline tickets sold, yet the $400m it brings in yearly accounts for three-quarters of UNITAID’s financing. With more than a billion people now travelling by air every year, and with a total of 2.2bn flights sold, extending the ‘air tax’ approach to a voluntary contributions model would vastly multiply the program’s benefits.

The turbo-charging effect of these new financing mechanisms as an addition to national ODA investments is now being seen as an important means of supporting the UN’s beleaguered MDGs. In September, UN Secretary-General Ban Ki-moon is to convene a summit of world leaders in New York to renew the drive toward reaching the MDGs. They will need to look little further than these innovative financing mechanisms to address MDG priorities in other areas than health. The 2006 Paris Conference on Innovative Development Funding Mechanisms now covers 55 member countries, and growing interest is being shown not just by the UN, but also by the EU, the G8, the G20, and leading NGOs. And although the Copenhagen climate change summit last December yielded a disappointingly failure to achieve consensus, participants were virtually unanimous about the role innovative financing mechanisms can play.

It is time for the G20 nations to turn these concepts into actions. The economic crisis is creating new barriers in the path of the MDGs, but innovative financing mechanisms are a potent weapon against them. September’s summit in New York will be an important opportunity for countries to voice their full-throated support for this approach, and give a critically-important jolt toward fulfilling the MDG commitments. When the MDGs were adopted in 2000, the sense of urgency was powered by the moral certitude that in our globally-connected world the notion that a sizeable part of humankind could miss the boat represented an unacceptable anachronism.