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Why budget frameworks help—not hinder—HIV/AIDS relief

Author(s):
International Monetary Fund. External Relations Dept.
Published Date:
June 2005
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In the May 21 issue of The Lancet, an international journal of medical science and practice, Ted Schrecker (University of Ottawa, Ontario, Canada) and Gorik Ooms (Medecins San Frontieres, Brussels, Belgium) argued that government spending targets, created by the World Bank and the IMF under medium-term expenditure frameworks, prevent foreign aid from reaching HIV/AIDS programs in the world’s poorest countries. They also suggested that “the international community has not taken seriously enough the acute need for new resources to assist health systems in the developing world, especially in sub-Saharan Africa.” The World Bank-IMF rebuttal, to appear in the June 18 issue of The Lancet, follows.

It is disheartening to see your esteemed medical publication providing a forum for serious accusations about the International Monetary Fund (IMF) and the World Bank (May 21, p. 1821). For all of the strong rhetoric of the article, one fact stands out: Gorik Ooms and Ted Schrecker fail to cite a single instance in which Bank or Fund policies actually restricted spending on HIV/AIDS.

Take the example they offer of Mozambique, where, according to Ooms and Schrecker, officials were allegedly told in 2002 that their spending plans “might have been too ambitious.” The numbers tell a very different story. From 2001 to 2004, Mozambique’s economy grew about 9 percent a year, after taking into account inflation. Meanwhile, the government’s spending on health programs and HIV/AIDS programs grew exactly in line with that level of growth. That adds up to a substantial real increase in spending on HIV/AIDS every year.

Accordingly, the charges levelled by Ooms and Schrecker do not stand up to the experience of frontline practitioners. A recent survey by the Center for Global Development, Washington, DC, USA—which drew 353 responses from professionals familiar with HIV/AIDS prevention, treatment, and care—showed the following concerns: lack of political will (29 percent); poor national coordination (28 percent); shortcomings of the health care delivery system (14 percent); national absorptive capacity constraints (8 percent); policy confusion (7 percent); donor interference (3 percent); ministry of finance unwillingness to permit additional spending (3 percent); Global Fund restrictions/requirements (2 percent); World Bank restrictions (1 percent); IMF caps (1 percent); and other (5 percent). These results underline, if need be, that fighting the AIDS pandemic is a complex and multifaceted challenge, as Ooms and Schrecker undoubtedly agree.

But that does not mean enough is being done in Mozambique or many other developing countries. Ooms and Schrecker correctly point to the international community’s failure to provide the resources needed to combat HIV/AIDS (and, we would add, the other diseases afflicting the poorest countries). But blaming the IMF and the Bank for these failures removes the spotlight from the real issues that we need to address: getting the donors to live up to their commitments and helping recipient countries to use additional money in the best way possible.

The Medium-Term Expenditure Frameworks (MTEFs) that Ooms and Schrecker single out are not a reflection of some malign intent. They are simply tools to enable forward-looking policy planning. The MTEFs plainly state what money is available and what programs are possible within the context of that resource envelope. They do not in any way restrict the additional spending of new grant aid. Make more aid reliably available, and more long-term programs will be possible.

We have stated all of these points publicly many times. And we would have been pleased to show Ooms and Schrecker how we are pressuring donors to increase aid and to make aid flows predictable, and how we are working with countries when more money is made available. A good example is Malawi, where a major increase in grant aid to the health sector began last year. We could also have described our extensive consultations with UNAIDS, the Global Fund, and President Bush’s Emergency Plan for AIDS Relief (PEPFAR). Indeed, in the past year we have worked closely with Peter Piot of UNAIDS and his staff to ensure adequate coordination in our mutual efforts in the area of HIV/AIDS. And we would have highlighted the chronic problem that afflicts health care throughout Africa—the desperate need for large numbers of skilled doctors and nurses. This is a problem that cannot be solved overnight and that clearly requires vast and coordinated efforts from both countries and donors to which our institutions are deeply committed.

The Bank and the Fund have made an unequivocal commitment to support international efforts to solve the health crisis of the low-income countries. We are ready to work with all parties to achieve this goal. This will help us get there more effectively than polemics.

We declare that we have no conflict of interest.

Sarbib J-L, Heller PS. Fiscal Space: response from World Bank and IMF. Lancet 2005; 365:2085. Reproduced by permission of Elsevier Ltd.

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