Print
Category: Analysis

 Why is development assistance not working for the people who need it most? Because these people, or the countries they live in, are simply too poor.

 

The ‘bottom billion’ of global society – most of whom live in low-income countries primarily in Africa - ‘enjoyed’ a combined Gross Domestic Product (GDP) of US$570 billion in 2008. That is US$570 per person, per year. In 2001, several African leaders signed the Abuja Declaration and committed to alleviating the suffering of their people by allocating 15 percent of government revenue to health services. If implemented, the policy would designate US$17 per person per year for health services. However, the World Health Organization estimates that US$40 per person per year is the absolute minimum needed to provide a basic package of primary healthcare. In order to cover the deficit, the ‘top billion’ people in high-income countries need to donate approximately US$23 per person per year. But, according to them, this is too much.

Why? The declared objective of development assistance program is ‘to put itself out of business’. By filling the gap, rich countries would essentially be paying two-thirds of the cost of healthcare for the world’s poorest nations. This would not be sustainable. And so the argument goes: in the name of sustainability and with an eye to eventual self-sufficiency, the West should not provide the US$23 per person that in many cases would make the difference between life and death.

It is hard to argue against the importance of sustainability. However, self-sufficiency is not synonymous with sustainability. When it comes to its own health - and other social services - the Western world has developed a different concept of sustainability. There is no expectation that any ministry of health should plan to ‘put itself out of business’. Imagine if you received a medical check-up, treatment for any health problems, and a decent education - and then were sent on your way to take full responsibility for your individual wellbeing for the rest of your life.

In the Western world, national social protection mechanisms do not aim for the ultimate self-reliance of their participants. They aim for a higher goal: for net recipients - participants receiving more than what they contribute - to become net contributors, i.e. participants who begin contributing more than what they receive. This relationship is framed as an open-ended relationship of mutual support between all participants. Take Belgium as an example. All citizens pay taxes toward health services, and those resources are distributed across the country to cover the healthcare of all, making it a mutual relationship. It is open-ended because there is no expectation that this relationship will ever end - the young will absorb the cost of the old, the healthy that of the sick - in a cyclical relationship that extends over time.

Would it be possible to expand this approach to sustainability beyond Western borders? As it stands, development assistance acts as a one directional and temporary relationship, with every expectation that the assistance will end as soon as the country is able to sustain its own health infrastructure. Why not work toward global mutual and open-ended relationships? Could we not share the equivalent of 0.1 percent of our GDP for a global social health protection scheme, or 0.5 percent of our GDP for a global social protection scheme, covering health, education, safe water, food security and housing?

Some will argue that any global social protection mechanism requires a global government. Social protection, they assert, requires a government representing the citizens in order to set or renegotiate the terms of the social contract: should income taxes be raised? If so, by how much? And how will the money be prioritized and used?

Yet no global government was needed to globalize intellectual property protection. The members of the World Trade Organization have all agreed to guarantee a minimum level of intellectual property protection, and are free to provide a higher level if they want. If we can agree to the global protection of intellectual property rights? The more practical challenge of collecting and redistributing funds could easily be solved through the creation of a global health fund, a global education fund, and so on, along the lines of the existing Global Fund to fight AIDS, Tuberculosis and Malaria for example. It does not require a global government.

But then the question is: should we?

The risk of dying while giving birth is 100 times higher in most low-income countries than in the majority of high-income countries. It takes ambulances, radios or cellular phones, and permanently accessible emergency obstetrics care services to make a real dent in maternal mortality. This is unaffordable for low-income countries: US$40 per person per year really is the minimum. There is no hope for significantly reducing maternal mortality - or improving healthcare in general - if we are not willing to aim for a different kind of sustainability. This will take open-ended, mutual support.

The reasons for creating social protection schemes within industrialized countries at the end of the nineteenth or during the twentieth century are now valid for the global economy. Social protection was needed to mitigate the expanding inequities that resulted from a free market economy. Any competition creates winners and losers; if the winners are allowed to invest their gains in comparative advantages for the next phase of competition, inequities grow until any form of social cohesion or cooperation becomes impossible. Social protection redistributes a part of the gains of all in accordance with the needs of all, and thus allows the continuation of unevenly distributed gains within boundaries that guarantee universal human dignity. In the twenty-first century, national free market economies have become increasingly, but not completely, integrated, resulting in cross-border competition between individuals and companies, but also in competition between states. The world is witnessing at a global level the same kind of self-amplifying dynamics, leading to ever-growing inequities, which demanded corrective measures at national levels in the West a century ago.

Last but not least, while social protection schemes were intended to redistribute wealth, they also generate wealth. Improvements in the quality of health and education in the Western world enhanced the productivity of its workforce. Social protection has proven to be more than a zero-sum wealth redistribution game. Why not apply these lessons on a global scale?

 

(published in the Yale Journal of International Affairs, March 31 2010).