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COMMENT & ANALYSIS:
Financial Times, Jan 9, 2002
By MARTIN WOLF

The low cost of better health: Improving the life expectancy of the poor would cost little and benefit everyone. But it may not be that simple

"Unto every one that hath shall be given . . . but from he that hath not shall be taken away even that which he hath," says the Gospel of Matthew.

Even the poorest living person possesses life itself. Yet the poor lose out here too. The life expectancy of the 640m people who live in least developed countries is only 51 years. For the 900m people who live in high-income countries, it is 78. Wealth not only means the ability to enjoy good things; it also means almost three extra decades in which to do so.

Of the blessings enjoyed by those who live in the high-income countries, none rivals health. Their life expectancy has roughly doubled over the past two centuries. Deaths of children before they reach five years of age have fallen to six per 1,000, against 159 in the least developed countries today. Healthy lives are also wealthier in enjoyment, in security and in protection against grief and pain.

A new report produced for the World Health Organisation by a commission under the chairmanship of Jeffrey Sachs of Harvard University argues compellingly for an effort to spread the blessings of better health to the poorest people in the world.* At a cost of just 0.1 per cent of the gross domestic product of the rich donor countries - Dollars 27bn (Pounds 18.7bn) in 2002 prices by 2007 and Dollars 38bn by 2015 - 8m lives could be saved annually or 330m disability-adjusted life years (DALYs), defined as years of healthy life now lost through premature death and disability.

Bad health and premature death are sources of misery not just for the victims but also for those who love and depend on them. The HIV/ Aids pandemic underlines this. By 1999, 25m Africans were believed to have HIV/ Aids and the continent had 12m Aids orphans.

In addition, health brings economic benefits. An average 22-year-old with 12 years of education in Botswana has a lifetime expected income 60 times the annual average in his country. For similarly educated Americans the multiple is 120, merely because they live longer.

Improved health also contributes directly to development. In countries with incomes per head below Dollars 750 (in 1990 prices at purchasing power parity) and infant mortality rates between 50 and 100 per 1,000 in 1965, the subsequent growth in real income per head between 1965 and 1994 was 3.7 per cent a year. It was a mere 0.1 per cent a year for countries with infant mortality rates then above 150. Statistical analysis suggests that each 10 per cent improvement in life expectancy at birth is associated with a 0.3 to 0.4 percentage point rise in growth rates.

The reasons seem clear. Healthy people work better and more productively and bring up their children to maturity. If parents expect healthy children, they have fewer and invest more in each. Thus, countries with infant mortality below 20 per 1,000 have an average of 1.7 children born to each woman, while countries with infant mortality rates above 100 have 6.2.

Yet some will still ask why the world's rich countries should respond to the cause of better health in the poorest countries. A part of the justification is that disease is a global public evil. Populations ravaged by Aids or tuberculosis are dangerous for everyone. So, too, are societies overwhelmed by destitution.

Another good answer is that the cost of helping is so low - a little more than a hundredth of public spending in the high-income countries on the health of their own people. But today donor assistance for health in developing countries is a quarter of even that very low level. Charity may begin at home. But it is impossible to understand why it should end there so abruptly.

With costs so low, the ratio of benefits to costs of a big effort to improve health in poor countries also appears hugely favourable. The report gives the lowest estimate of the benefits of an expanded programme of health intervention in low-income countries at Dollars 186bn a year by 2015, almost three times the overall additional annual cost (shared by donors and the countries) of Dollars 66bn. The benefits would be much larger if improved health spurred faster growth.

Yet three questions remain. The first is whether the recommended increase in aid for spending on health would represent a distortion of the aid effort. At present, total official aid amounts to only 0.2 per cent of the GDP of rich countries. But it is unlikely that half of all assistance should go on health. There are other priorities: education, water and sanitation, environmental management, infrastructure and economic development. The recommended effort makes sense only if it is part of a larger overall aid budget.

The second question is whether the report outlines a sensible programme. This is for specialists to judge. But the suggestions sound reasonable. The Dollars 27bn of grant assistance in 2007 would be devoted to three goals: help, almost entirely to low-income developing countries, for scaling up essential interventions and health system development (Dollars 22bn); investment in research and development in diseases of the poor (Dollars 3bn); and increased delivery of global public health goods by international institutions (Dollars 2bn).

The last and most important question is whether the additional aid would go to the purposes for which it was intended. The public perception that much aid has been wasted in corruption or in sustaining wrong-headed policies, implemented by incompetent or even malevolent governments, is not wrong. If there is to be a substantially enhanced aid effort, with health as a central component, there has to be confidence in the use of the additional funds.

This is not an excuse for doing nothing. The case made in the report is too compelling for that. Those fortunate enough to be born in the world's richest countries do have a responsibility for the wretched of the earth and an interest in responding to their plight. Calling for health spending of Dollars 34 a head in the world's poorest countries is not excessive.

The report concludes that "fighting disease will be the truest test of our common capacity to forge a true global community". But community cuts two ways: it means both more money from the rich and greater accountability for the use made of it by governments of the poor. The noble aspirations of this report will be fulfilled only if agreement is reached on a credibly enforceable bargain of this kind.

* Macroeconomics and Health: Investing in Health for Economic Development, (Geneva: WHO, 2001) http:// www.who.int/home-page/

martin.wolf@ft.com

Copyright: The Financial Times Limited 1995-1998




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