Good health: A cornerstone of development

Development Co-operation Directorate (DCD)

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Ill-health and disease are now recognised as barriers to economic growth in developing countries. Pro-poor policies are needed to tackle these problems, through Doha and beyond.

Health before wealth is more than just an old adage, and in the build-up to the WTO meeting at Cancún in September, we look at why programmes that aim to protect and improve the health of poor people can help in the battle against global poverty.

Health before wealth is an old adage that can be readily understood by looking at the links between ill health and poverty in developing countries. Good health boosts labour productivity, educational attainment and income, and so reduces poverty. When poor people know their children are more likely to survive and be healthy, they tend to have smaller families and so higher incomes per family member. So programmes that aim to protect and improve the health of people below and just above the poverty line in developing countries could greatly help in the battle against global poverty.

These links between health and poverty reduction have been strongly confirmed in recent research on the determinants of economic growth in developing countries (see The Commission for Macroeconomics and Health in the references). And this has helped place health higher on the international agenda than ever before, not just because of efforts to generate economic growth or because of the battle against HIV/AIDS, but because poor people have higher than average child and maternal mortality, higher levels of disease, and limited access to health care and social protection. Gender inequality undermines further the health of poor women and girls.

When poor people become ill or injured, the entire household can become locked in a downward spiral of lost income and high health care costs. The international community has agreed three Millennium Development Goals (MDGs) that call for health improvements by 2015: reducing child deaths, lowering maternal mortality, and stopping the spread of HIV/AIDS, malaria and tuberculosis. In addition, however, the achievement of the other MDGs – particularly eradicating poverty and hunger, achieving universal primary education, and empowering women – greatly depends on better health.

To meet this challenge, developing countries, supported by OECD countries and their development agencies, need to take a pro-poor health approach. This must do what it says: promote, protect and improve the health of poor people. It necessitates targeting diseases that affect these groups disproportionately. Malaria, for example, causes the premature deaths of one million people each year, while globally 42 million people are living with HIV/AIDS. Diseases linked to tobacco lead to a further four million avoidable deaths each year, half of them in developing countries.

Malnutrition and food insecurity have obvious implications for health. Road fatalities are another public health concern, though often not seen as such; yet, in developing countries, about a million people are killed every year as a result of road crashes. Indoor air pollution is a health hazard resulting from the use of cheap biomass for heating and cooking which causes the deaths of two million people a year, usually poor women and children.

Resolving these problems will require not just the efforts of health ministries, but coordination with departments of agriculture, transport, education, and energy, to name but a few. Such is the nature of pro-poor health approaches.

There are many obstacles to the effective implementation of pro-poor health policies, but inadequate funding of health is a major, and inescapable, part of the problem. Average health expenditure in the least developed countries is about US$11 per capita per year, compared with around US$2,000 in high income countries. It would cost an estimated US$30-40 per capita to meet the basic health needs of the poor. Without additional money to buy vaccines and drugs, to build and equip facilities and to ensure adequate staffing, the health-related MDGs will not be met.

More funding is clearly needed. Some increase in government spending for health is possible in most developing countries. Several countries including Ghana, Uganda, and Bangladesh have increased their level of per capita government expenditure on health over the last five years though the absolute level remains inadequate.

Managing funds properly is also important, since in many countries, the distribution of resources is skewed towards advanced services at the expense of primary health care and district hospital services.

But in almost all cases in poor developing countries, additional domestic resources would be insufficient to meet health needs. External financing must fill the gap. This might mean attracting more resources from the private sector or charitable foundations, but it also means increasing development assistance to health programmes from OECD governments as part of their commitment to the MDGs.

Total levels of aid to health have increased since 1996, but the level of multilateral aid to health – particularly from the World Bank’s International Development Association – has declined. And though aid from the member countries of the Development Assistance Committee (DAC) has risen, the picture is far from even. Aid to health from countries such as Australia, the UK and the US has increased in recent years, while some large donor countries like France and Japan have seen a fall in their aid to health, albeit from high historical levels. A more determined effort is clearly required.

Realistically, public services cannot be relied on as the only supplier of health services, and private participation in investing and supplying health care seems as inevitable as it is vital.

Perspectives vary on the ideal mix of public and private sector participation, but in practice, private health services are already extensively used by poor people in developing countries. These range from private pharmacists and itinerant drug sellers, to community or NGO services, and profit-making health services.

The increasing use of private services reflects the poor quality of public sector services as well as problems in travelling to remote, often inadequate, clinics or paying official and unofficial charges.

Properly overseen partnerships with the private sector are critical if health goals for developing countries are to be met. These partnerships may include the contracting out of services to NGOs especially in remote areas, or steps to improve the quality of services available in the commercial sector.

Again, whichever model is preferred, it has to be pro-poor. People must be able to access and use health facilities and not become impoverished as a result. Charges for health services paid at the time of use, even if reimbursed later, have been shown to discourage use by poor people. The best protection for poor people is probably offered by systems that encourage payment in advance or a pooling of risk through insurance, taxation or development assistance.

Any commitment to support the health-related MDGs calls for a long-term relationship between development agencies, developing countries and the users of health care. As part of the pro-poor health approach, development agencies need to adhere to the government-led health programme and help support its development through common procedures for management, implementation and, to varying extents, funding.

Above all, a pro-poor health approach needs to be comprehensive. This means looking beyond country-level interventions and policies to the impact of international trends and policies on health. Globalisation, for example, has mixed implications for the health of poor people. Closer world integration means that diseases move more easily across national borders as shown by the recent outbreak of severe acute respiratory syndrome (SARS); yet globalisation also brings opportunities to prevent, treat and contain disease.

One way that development agencies and developing country governments can work together at the international level is by promoting the development of global public goods for health (GPGs). These are products or services that are under-supplied by the market, yet require international public action.

Health research is one example. Under 10% of global funding of health research is devoted to diseases or conditions that account for 90% of the global disease burden, and much less than 10% for the problems of poor countries and people. This means that managing diseases like trachoma, which affects 145 million people and can lead to irreversible blindness, is unlikely to be successful unless there is additional financing for international initiatives to plug the research gap. In this case, development agency funding could be used to support the production of new drugs, vaccines and knowledge to the benefit of poor people.

Public health ranks highly on the Doha Development Agenda. In November 2001, the fourth WTO ministerial conference recognised the importance of health problems in developing countries and stressed “the need for the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) to be part of the wider national and international action to address these problems.”

Intellectual property rights, including patent protection, provide an incentive for the development of new medicines. The TRIPS agreement requires WTO countries to provide patent protection for both products and processes with respect to most technologies. But under its terms, there is some flexibility in the application of patent rights in the case of public health emergencies, including the right to grant compulsory licenses. By using compulsory licensing, a government facing a national health emergency from the likes of malaria or HIV/AIDS can legally authorise production of a patented good or process without the consent of the owners of the patent. But, as recognised at Doha, not all countries have the manufacturing capacity for medicine production, making compulsory licences ineffective in such cases. Discussions continue at the WTO on resolving these difficulties.

A resolution is badly needed, for if global policymakers such as those involved in Doha can address the links between health, trade and poverty, the example they set will open the way for a range of policies that affect health to become more coherent and effective.


OECD/WHO (2003), DAC Guidelines and Reference Series: Poverty and Health, OECD, Paris.

WHO (2001), Macroeconomics and Health: Investing in Health for Economic Development, Report of the Commission on Macroeconomics and Health, WHO, Geneva.

WHO/WTO (2002), WTO Agreement and Public Health, a joint report by the WHO and WTO, available online (see link below).

World Bank (2002), World Development Indicators, World Bank, Washington.

©OECD Observer No 237, May 2003

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