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Month end blues:
How to make the money stretch
Ernest Massiah, UNAIDS RST,
PANCAP AGM, Nassau,
Bahamas, 2011
1
Presentation FormatKey Questions Asked and Answered
• What has occurred - A Snapshot of the HIV
trend
• What has been the “spend”
• What has been the outcome and result of the
“spend”
• What is the likely impact of the Changing
Global Economic Environment?
• In light of this, What is the suggested way
forward
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THE TREND
3
Snapshot of the HIV trends over the period
2001-2009
21,00
0
HEALTH IMPACT
18,000
new
infections
12,000
deaths
2001
YEAR
2009
4
THE SPEND
5
Over $1.6 Billion in 10 years
6
External resources for HIV 2001-2011 (Current $)
1800
GF Global
Fund
eligibility
changes
1600
GF Global
Fund
eligibility
changes
1400
Most WB
projects
closed
US$ milions
1200
1000
800
Start of
World
Bank MAP
Global
Fund Haiti
grant
600
PEPFAR
400
200
0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
7
A Tale of Three Countries
8
Trinidad 2009
• 84% Government funded programme
• $ 90.3 million in 2009
9
Trinidad and Tobago: HIV Expenditure
2002-2009
60
US $ millions
50
40
30
20
10
0
2002
2003
Prevention
2004
Treat/Care
2005
2006
Advocacy/HR
2007
Surv/Res
2008
2009
Management
10
Trinidad/Tobago: HIV Expenditure Patterns, 2008
Coordination, 17
Research, 1
Advocacy, 1
Treatment/Care, 45
Prevention, 36
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Trinidad/Tobago: HIV Expenditure Patterns, 2008
Research, 1
02-06 73%
Donors
funded
Coordination, 17
Treatment/Care, 45
Advocacy, 1
In 2009, donor
funding
exceeded
government’s
93% Gov
funded
Prevention, 36
12
Dominican Republic 2008
• 25% Government funded programme
• US$31.3 million in 2008
13
DR: HIV Financing Sources, 2008
25%
49%
Public
Private
International
26%
14
DR: HIV Expenditure Patterns, 2008
Social Protection
Entrono Favorable
63% donor
funded
Research
Prevention
Human Resources
35% donor
funded
Prog. Management
A Tale of Two Countries
OVC
Treatment
15
Guyana 2010
• 80% Donor funded programme
• $ 28.9 million in 2010
16
Guyana: HIV Sources of Funding, 2010
Largest
supporter in
2015, with 68%,
but ends in 2016
2%
8%
Ends in 2015 ,
declines from
$18.7 in 2010 to
$0m in 2015
25%
UN
PEPFAR
GF
Domestic
65%
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EVALUATION OF THE SPEND
18
260,000 PLHIV 2008
250,000 PLHIV 2001
52% don’t get treatment
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What did the money buy?
$1.6 Billion
$91m
2001
MONEY
2009
20
Impact of investment in HIV prevention, care and treatment
2001-2009
21,00
0
$1.6 Billion
HEALTH IMPACT
18,000 new
infections
12,000 deaths
$91m
2001
MONEY
2009
21
22
3,592 receiving ART
, 404 PLHIV on
2nd Line ARV
, 40 PLHIV on
2nd Line ARV
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7,503 needing ART
3,592 receiving ART
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7,503 needing ART
3,592 receiving ART
$4,324,640
, 404 PLHIV on
2nd Line ARV
, 40 PLHIV on
2nd Line ARV
$469,400
25
There is an economic crisis
26
Caribbean Real GDP: 2005 - 2010
13
Real GDP
8
3
-2
-7
2005
The Bahamas
2006
Barbados
2007
Dominican Republic
2008
Jamaica
2009
St. Lucia
2010
Trinidad and Tobago 27
The Economic Context
• Before 2008 - with few exceptions, very low rates
of growth and widespread fiscal and balance of
payment deficits.
• Post 2008 - worsened economic context with
some countries experiencing negative growth
rates and seeking IMF support.
• Yet, the annual income of the region, including
Puerto Rico and the Dominican Republic, is
approximately US$60 billion with a population of
35 million people
• The public sector accounts for roughly 30% of this
income
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Jamaica: 2006-2010: Impact of an economic
crisis on the health sector
Economy
• GDP from 2.7% in 2006 to
-2.7% in 2009
• Debt-to-GDP 132% in 2009
• Unemployment increased
from 9.8% in 2007 to 11.4%
in 2009
• Remittances slowed
• Exchange rate declined
• Alumina revenue delined by
60%, bauxite by 25%
• 20% decline in Government
budgets
Health Sector Impact
• Pre crisis (2006/07) health
expenditures were
increasing by 19.7% in real
terms
• In crisis, (2009-10) Health
expenditures declines by
6.5%
• In US$ health expenditures
declined from $212.5M in
06/07 to $176.4M in 09/10 23%
Source: Rapid Assessment of the Impact of the Economic Crisis on Health Spending in Jamaica, World Bank, 2011
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Potential Effects of economic crises
Lack of funding for
MARPs
Less prevention: increased
risk taking
Drug shortages: ART
resistance
Drug shortages:
increased mortality and
morbidity
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Quo vadis?
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What do we do?
• Address the IDD
• Be strategic in our choices
• Put resources where the
epidemic is
• Be realistic about long term
change
• Develop a new message
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What do we do?
• Address the IDD = Implementation Deficit
Disorder
Of 7 World Bank loans totalling $157m,
•only
Be strategic
in
our
choices
$114m was used. Of 7 closed
•grants,
Put resources
where
theall
epidemic
is
5 did not
use
the funds
•available
Be realistic about long term change
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What do we do?
• Address the IDD
• Be strategic in our choices
No more implementation of costly
schemes of uncertain effectiveness
We must pay more attention to what
things cost, their likely impact and
reduce costs
34
Management expenditure, by total HIV programe costs in selected Caribbean
countries, 2002-2009
50%
45%
40%
Belize
35%
30%
Barbados
Barbados
25%
Dominican Republic
Trinidad
20%
Trinidad
Jamaica
15%
Jamaica
10%
5%
Trinidad
0%
2002
2003
Trinidad
Barbados
Trinidad
Trinidad
2004
2005
2006
2007
2008
2009
2010
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What do we do?
• Address the IDD
• Be strategic in our choices
There must be better integration of HIV
with STI, SRH services
Also better alignment with country
reponses to NCDs
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What do we do?
• Address the IDD
• Be strategic in our choices
• Put resources where the
epidemic is
• Be realistic
• Develop a new message
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DR: Modes of Transmission Study, 2010
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DR: Mode of Transmission Study, 2010
Approximately
1.2% of
expenditure,
specifically
targeted
Approximately
16.1% of
expenditure,
specifically
targeted
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Prevention Spending Trinidad/Tobago 2002 and 2009
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What do we do?
• Address the IMD
The project cycle is not a development
•cycle
Be strategic in our choices
• Put resources where the
epidemic is
• Be realistic
• Develop a new message
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What do we do?
• Address the IMD
Second
highestin
prevalence
in the world?
• Be strategic
our choices
• Put resources where the
epidemic is
• Be realistic
• Develop a new message
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Where do we go from here –
A look at the Financial &Fiscal Side
Karl Theodore
HEU, Centre for Health Economics, UWI
Update on Cost of
Regional Response to HIV/AIDS
• Based on initial estimates produced jointly
the World Bank and the HEU in 2000 the
updated estimate of the projected cost of
responding to HIV/AIDS in 22 CAREC
countries is approximately US$ 300m per
year.
• This is significantly more than the average
annual expenditure ( about $165mn) on the
epidemic for the past eight years.
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Update on Cost of Regional Response
• On a positive note, in spite of the gap
between actual and required
expenditure the epidemic has more or
less been kept in check.
• If the sustainable financing
requirement is set just a little higher
than the recent annual average
expenditure, with a new target of US$
180million, for example, we would still
be requiring just over three-tenths of
one percent , or 3/1000 (0.3%) of the
region’s annual income!
45
Sustainable Financing Feasible?
• On the face of it an expenditure of 0.3% of the
region’s income cannot be considered an
infeasible target, especially in the context of an
epidemic with the potential to annihilate the
region.
• It is, by all appearances, a matter of the political
will to take full ownership of the epidemic, the
will to mobilize a miniscule fraction of income to
confront a survival threat.
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A CHANGE OF ATTITUDE
• The truth is that while the region is grateful
for international support to fight the
epidemic, the region has always had the
financial capacity to fight this epidemic on its
own.
• To some this is the kind of statement that can
make overseas support become even more
scarce, but facing up to this is what
independence and regional responsibility are
about.
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History of domestic support
• More data required but three country experiences are
instructive:
• Country A: US$ 50mn spent over the period 2002 to 2009.
• Over the same period the cumulative income of the
country was close to US$ 135 billion.
• The allocation to HIV was therefore less than 0.05%, that is
less than 1/20 of one percent!
• Country B: in 2006 5.1% of its GDP spent on health, with
3.8% of this five percent allocated to HIV/AIDS, or 0.2% of
its income.
• Country C in 2008 laid out a plan to spend US$ 90mn
between 2008 and 2013 – an average of $18mn per year
• Since the country’s income for 2008 was US$4,046mn this
means that the planned expenditure was just over 0.4% of
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income, slightly more than the regional target!
Additional Dimension of the Context
• In addition to a challenging epidemiological and
economic context, the HIV/AIDS response is now
faced with the prospect of reduced financial
resources, mainly because of the lingering effects
of the 2008/2009 global recession.
• The need now is to do at least as much as before
with less resources than previously available.
• It is in this context that the question of the
sustainability of the HIV/AIDs response rears its
head.
49
Sustainable Sourcing
• Although support for HIV/AIDS programmes
mainly comes directly from fiscal and
international sources, in the final analysis all
such support comes from the global and
national levels of income.
• If we assume that decline in international
support will follow UK trend, where DFID has
cut by 32%, it follows that sustainability will
require countries to find significantly more
domestic fiscal space to support national
programmes.
50
Finding Fiscal Space for HIV/AIDS response
• Two broad approaches – generating more revenues and
using resources better
• In all there are at least five different ways of making fiscal
space:
1. Expanding the tax base – not likely without growth
2. Increasing the effective rate of taxation – dealing with
fiscal slippage, introducing new taxes (sin taxes?)
3. Better targeting of fiscal resources – reducing negative
impact of epidemic on the economy - and responding to
evaluation of use of resources – improving value for money
4. Linking HIV/AIDS response to other health threats to
socioeconomic development – life style diseases the
candidates here
5. Contributing to a regional pool for specific programmes
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Comments of Fiscal Space creation
• Expanding the tax base: issue here is that in some
countries per capita income is relatively high, but fiscal
deficits prevail – A&B, BVI examples. Also more countries
need to resort to sales taxation. Those with no income
taxation need to reconsider this position. Need to tap in
to more private sector support of the HIV/AIDS response
programme
• Increasing the effective rate of taxation: Estimates of
slippage range between 20% and 45%. Countries on the
higher end are foregoing valuable income for the
government.
• GIVEN THE PARALYSING DEBT/GDP RATIOS, SOME
DEGREE OF FISCAL REFORM SEEMS TO BE WARRANTED
FOR STRENGTHENING THE REVENUE BASE
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Effectively Expanding Fiscal Space
3. Better targeting of fiscal resources :same level of
fiscal allocation will do more for the HIV/AIDS
programmes if resources are prioritized to address
problems according to severity, according to
economic evaluation and M&E findings .
4. Linking HIV/AIDS response to other health threats
to socioeconomic development : since HIV/AIDS is
itself a lifestyle disease the response to the epidemic
may benefit from complementary efforts in
addressing other lifestyle diseases – use of same
trained personnel, use of same facilities, joint
procurement of drugs, etc
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Philosophical summary
• Situation may indeed be a bad one, with the
prospect of dwindling resources in the presence of
an epidemic that is not yet fully under control.
• However, given the options countries face the
situation cannot be described as hopeless:
• a)The opportunity for fiscal reform is presented.
• b)The opportunity for health system reform is also
presented.
• c)The case for private sector resource mobilization is
clear.
• In this sense the sustainability of the HIV/AIDS
response in the region is, in a very real sense, within
our hands.
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Way Forward
• It will make sense
1. to assume that overseas support over the years
will level out at around 30% of 2007 levels and
2. to gear the domestic sources – public and
private- to take over funding responsibilities
• In particular the prevention programme should
be 100% locally or regionally funded, with
external donor support going wholly to the
treatment programme.
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One New Message
• One new message today is that in
their determination to control the
HIV/AIDS epidemic the countries
of the region are taking control of
the funding of their response
programmes.
• HIV/AIDS and other threats to
development to be covered by a
new one percent rule.
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