IMF funding linked to high TB rates

According to this article from this BBC, “Strict conditions on international loans have been blamed for thousands of extra tuberculosis deaths in eastern Europe, and former Soviet republics.”

Researchers from Cambridge and Yale universities said countries with International Monetary Fund (IMF) loans have seen sharp increases in tuberculosis cases because the conditions attached to the loans cause them to spend less on health care.  Some background:

The resurgence of TB in eastern Europe and the former Soviet Union has caused widespread concern, particularly as it has coincided with an increase in the number of drug-resistant cases.

The IMF is an international organisation which aims to oversee the global financial system, and reduce instability by offering financial packages to governments.

In recent years, it has offered assistance to 21 countries in the region, in the form of loans offered in exchange for the meeting of strict economic targets.

The researchers claimed it was efforts to meet these targets that was undermining the fight against TB by drawing funding away from public health.

The Cambridge and Yale researchers compared the timing of IMF funding with the timing of increased TB rates, and “claimed a direct relationship could be seen – the start of the increases matched the starting point of IMF programmes, and continued rising as the programme continued.”

The researchers suggested that the financial stringencies enforced by the IMF have caused massive loss of life, “at least 100,000 extra deaths”:

Countries which accepted IMF loans averaged an 8% fall in government spending, a 7% drop in the number of doctors per head of population, and a fall in a method of TB treatment called “directly observed therapy”, which is recommended by the World Health Organisation.

David Stuckler, one of the study’s authors, said that the IMF “had its priorities backwards”.

“If we really want to create sustainable economic growth, we need first to ensure that we have taken care of people’s most basic health needs.”

These are pretty scathing findings — not surprisingly, the IMF disputes them, “saying that it always supported public spending on ‘critical social needs’ such as healthcare and education.”  IMF representatives defended the organization’s concern for health:

A spokesman said: “I suppose anyone can try finding a rationale for anything. This is an example of that.

“Efforts to attack tuberculosis in sub-Saharan Africa are fully supported by the IMF.

“Our extensive array of published analysis is clear evidence that we are very sensitive to the important role of healthcare and personal well being.

“We also have contacts and relations with international bodies who are expert in the area of healthcare and disease prevention and control.

“This doesn’t seem to register with the authors.”

Time out.  I could be wrong, but this seems like a pretty flimsy defense.  The IMF insists that it really, really does care about health, and it has the papers to prove it.  Okay, great.  But that doesn’t address the question of whether IMF policies are hindering efforts to fight tuberculosis, and therefore causing thousands of unnecessary deaths.  It’s interesting to note that the IMF spokesman — at least as far as he was quoted by the BBC — didn’t even try to refute the researchers’ specific claims.

This isn’t the first time the IMF has clashed with global health advocates.  For an overview of this and other ongoing controversies, I recommend this BBC article from 2006, especially the last section, on “Conditionality.”  (Keep an eye out for a noteworthy quote from Jeffrey Sachs.)

For a more detailed look at the IMF and healthcare, the Center for Global Development (CGD)has just the thing: a 2007 report titled “Does the IMF Constrain Health Spending in Poor Countries? Evidence and an Agenda For Action.”  You can find and overview and brief, as well as the full 90-page document (free PDF download) on the CGD website.  According to the report’s Executive Summary (page viii):

Controversy surrounds IMF-supported programs in low-income countries and one of the most contentious questions is whether the IMF forces governments to take policy measures that hurt the health of populations.  Critics argue that IMF programs have unduly constrained health spending, at a time when more donor money is available and the health sector needs are very great, because the IMF is too pessimistic about how much aid will materialize or because it takes too conservative a view about what policies are needed to sustain sufficient macroeconomic stability.  Critics also maintain that ceilings on government wage bills in IMF programs have unnecessarily disrupted much-needed expansions of the health workforce.  The IMF response to such criticisms is that governments are responsible for choices on expenditure priorities and that the Fund does not set targets for spending or wages in particular sectors.

According to the report’s findings (page ix), while governments bear responsibility for the allocation of available funds,

the content of IMF programs can have important indirect effects on the health sector, through the size of overall public spending and other influences (e.g., on the growth rate, which in turn influences future spending capacity). Furthermore, the nature of many health interventions makes them especially sensitive to fiscal decisions. In countries with weak budgetary processes, the burden of short-term expenditure cuts can fall disproportionately on health spending, causing disruptions in the availability of resources. Because of the imperative of ensuring continuity in services and drug supply for HIV/AIDS, tuberculosis and other major diseases, any temporary interruptions in funding can have very serious consequences for health outcomes. Moreover, the nature of much health spending—including the large share spent on wages and the complexity of training and recruitment—increases the importance of forward-looking budgetary planning. Therefore, IMF-supported fiscal policies in particular can have an important influence on the health sector.  [Emphasis added.]

It looks like the new research on IMF funding and TB rates supports this analysis.  This should lead the IMF and other economic leaders to look closely at the nature of funding conditions: there’s something terribly wrong when attempts to boost world economies are paid for with thousands of lives.  Maybe the IMF needs to reassess whether its policies actually reflect the best interests of the people it should be serving.

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~ by h.e.g. on July 22, 2008.

One Response to “IMF funding linked to high TB rates”

  1. From: IMF Public Affairs Office

    Readers might be interested in this preliminary critique of the TB study prepared by the IMF Research Department

    An examination of the study by economists in the Research Department of the International Monetary Fund called into question how the study was done.

    “Severe methodological shortcomings limit the scope of these results and prevent any causal interpretation. The fundamental problem is that this study does not take properly into account that countries implement IMF-supported reforms in times of economic distress,” the IMF’s assessment said.

    Key problems

    The study finds that IMF programs are positively associated with the TB mortality rate for a sample of 21 transition countries from 1992 to 2002. According to the Research Department note, the main concerns with this study are the following:

    • The authors do not take into account that the economic and social instability following the collapse of Soviet Union may have had a direct impact on TB incidence in the 21 transition economies considered in the study. Any analysis that seeks to estimate the impact of IMF-supported programs on economic or social outcomes should take into account the economic and political conditions that first led the country to agree to an IMF-supported program. By not including these conditions, this study confuses the reasons for asking IMF assistance with the consequences of this assistance.

    • The study speculates that IMF-supported programs are associated with lower public health expenditure, leading to higher TB incidence. However, this conjecture is not corroborated by data. The average increase in health spending as a share of GDP is larger for countries with Fund-supported programs than in countries without such programs (http://www.imf.org/external/np/vc/2007/062907.htm and IMF’s WP/05/100).

    • The study has a number of dubious results, which cast doubt on the methodology used by the authors. The study does not take into account many other factors that should have a direct impact on TB incidence, including health expenditure, poverty, initial mortality, and migration. Other results of the study, including that TB-incidence increases with income growth and decreases with urbanization, contradict previous studies that find that TB incidence increases with poverty and increases with urbanization.

    • Finally, the authors’ finding that the only consistent factor impacting TB incidence is the presence of IMF-supported programs is in contrast with previous epidemiological studies on the incidence of TB.

    http://www.imf.org/external/pubs/ft/survey/so/2008/RES072308A.htm

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