New Bank report highlights emerging human cost of crisis, offers policy advice based on previous crises
Press Release No:2009/324/HDN
Washington, April 24, 2009 -The World Bank said today it was mobilizing up to $3.1 billion this year in health financing to help poor countries battle threats to their social services during the global economic crisis. This effectively triples Bank support from $1.0 billion last year and will be used to strengthen health systems in poor countries, boost their performance in preventing and treating communicable diseases, and improving child and maternal health, hygiene and sanitation.
The Bank also said it was doubling its education financing this year in low- and middle-income countries to $4.09 billion.
The new health and education numbers follow the Bank's announcement earlier this week that its investments in social protection programs, including social safety nets, are expected to rise dramatically for 2009-2010 to $12 billion.
In a new report showing how previous crises have forced developing countries to cut back on health and education spending, the Bank also warns that a number of countries may already be facing hardship in supplying life-saving drugs for people living with AIDS.
According to the new report Averting a Human Crisis During the Global Downturn: Policy Options from the World Bank's Human Development Network preliminary findings from a March 2009 survey conducted in 69 countries, which offer treatment to 3.4 million people on antiretroviral treatment (ART), suggests that 8 countries now face shortages of antiretroviral drugs or other disruptions to AIDS treatment. A total of 22 countries in Africa, the Caribbean, Europe and Central Asia, and Asia and Pacific expect to face disruptions over the course of the year. Together, these countries are home to more than 60 percent of people worldwide on AIDS treatment. HIV/AIDS prevention programs are also in jeopardy. 34 countries representing, 75 percent of people living with HIV, already see an impact on prevention programs that target their high-risk groups (including sex workers and injecting drug users).
"This new report shows that people on AIDS treatment could be in danger of losing their place in the lifeboat, and mothers and their children in poor countries could face cuts in key health and nutrition services," says Joy Phumaphi, the World Bank's Vice President for Human Development and former Health Minister for Botswana. "The global economic downturn has taken a wrecking ball to growth and development in the developing world, with children having to drop out of school and poor families eating cheaper, less nutritious food which can result in weight loss and severe malnutrition, especially for young children and pregnant women."
Phumaphi says that during the East Asia crisis in the late 1990s, for example, a survey of public health facilities in Thailand reported a 22% increase in anemia amongst pregnant women as mothers switched to eating less nutritious foods; in Indonesia, micro-nutrient deficiencies (especially vitamin A) in children and women (of reproductive age) increased during the crisis period, while the average weight fell for children under the age of three.
Holding the line on social services
Evidence from previous crises in Argentina, Indonesia, Thailand, and Russia shows that governments were forced to cut health services as a result of shrinking budgets and that returning health spending to pre-crisis levels took up to 10-15 years to achieve.
"We cannot afford a 'lost' generation of people as a result of this crisis," Phumaphi said. "It is essential that developing countries and aid donors act now to protect and expand their spending on health, education and other basic social services and target these efforts to make sure they reach the poorest and most vulnerable groups."
Citing the new report, the Bank says that 23 countries depend on foreign aid for more than 30% of their total health spending and that maintaining donor aid flows during a crisis is urgent in order to safeguard health services. In Rwanda and Ethiopia, foreign aid donors subsidize more than 50% of total government budgeted health spending. Governments have used this aid to expand their health services but they are highly dependent on uninterrupted aid flows aid to keep health services available to people, especially the poorest and most vulnerable groups.
People most vulnerable to falling sick and into extreme poverty as a result of the global economic crisis include people living with disabilities, 'informal' workers who toil in the shadows of the mainstream job market and make up a large percentage of the workforce in developing countries, and poor women and children, especially mothers and girls.
Gaps in HIV/AIDS prevention and treatment
According to the new report, the Bank is encouraging countries which depend extensively on external donor HIV/AIDS financing to identify impending cash shortages as far as possible in advance, and to liaise with the Bank and other partners which would help to mobilize 'bridge financing' that prevents interrupted AIDS drug treatment at the very least. At the same time, the Bank warns that maintaining and expanding effective HIV prevention programs during the current crisis is also essential to guard against a resurgence of new infections.
The report also suggests that countries set up simple early warning systems to help track and minimize treatment interruptions while closely monitoring drug supplies and the use of key health services.
Ensuring children remain in school
Evidence from the East Asia crisis and others show that families suddenly faced with unemployment and lost wages pull their children, especially girls, out of school and that they seldom return to school afterwards, effectively ending their chance of a formal education.
The report says that allowing enrollments and learning levels to deteriorate during the crisis will deprive developing countries of the ability to get a head-start on their economic competitiveness when the world eventually emerges from crisis.
Evidence from past crises and recent impact evaluations show that conditional cash transfers (e.g., the 'Oportunidades' program in Mexico), school feeding programs (e.g., in Jamaica) and student fellowships can also help to keep children in school. Governments and donors can also help with block grants to schools in the most vulnerable areas, on-time payment of teacher salaries, and other incentives to keep students stay in school and learn during crises.
Countries able to maintain or build up their job skills during the recession will be able to better to recover their lost footing; wealthy countries such as the United States are using stimulus investment in education and higher labor skills to re-tool their workers for the future and also to guard against future crises and economic downturns.
Social protection to help poor and vulnerable people
Social Protection programs, which include safety nets, and job creation and training programs, help to forestall rising poverty and inequality as a result of the crisis. For example, these programs can ensure that people in need get the nutrition, health, education services and alternative sources of income they need to weather the worst effects of the global downturn.
World Bank response to potential human crisis
To avert a human emergency during the economic crisis, the Bank is providing swift assistance for poor and vulnerable groups, especially including women, children, and people with disabilities. It is also working with countries and donors to maintain adequate national investments in health and education, and to scale up social protection programs during the economic crisis.
"We have seen in the past that global slowdowns can lead to reduced government spending and donor flows to health and education," says the World Bank's Managing Director for Human Development Graeme Wheeler. "Despite the crisis, aid donors must honor their commitments to increase financing for human development to prevent backsliding in this vital area."
For example, Wheeler says that the World Bank has set up a Vulnerability Financing Facility (VFF) to channel funds to those hardest hit by the twin food and economic crises with separate windows for rapid social response and food security. Through the VFF and other programs, the Bank is helping countries to expand services for maternal/infant health and nutrition, and school feeding programs; scale up targeted safety net programs; invest in active labor markets, income support for the unemployed, job creation and training programs and other work related initiatives.
The Bank is also advising countries against making abrupt policy changes to their pension systems in response to the crisis, and to focus on diversifying their pension systems and on smaller, targeted measures to protect those at or near retirement age.
For more information on the World Bank's response to the economic crisis, and to see more about the new reportAverting a Human Crisis During the Global Downturn: Policy Options from the World Bank's Human Development Network, please visit <http://www.worldbank.org>.
Contacts:
In Washington: Phil Hay(202) 473-1796
Cell (202) 409-2909
phay@worldbank.org
Carolyn Reynolds (202) 473-0049
Cell (202)294-5542
creynolds@worldbank.org