Innovative Financing: Opportunities and Challenges for the Future of Global Health.
The goals of reducing poverty, improving maternal and child health outcomes and decreasing the incidence of infectious diseases are laudable goals. The costs of these efforts are monumental. To date most developed countries have failed to meet the 0.7 % of gross national income committed to development at the 2002 International Conference on Financing for Development. Most developing countries have also failed to meet the budgetary goal of allocating 15 % of Gross National Product to social and healthy development as agreed to in 2001. In addition, to limited resources there is significant competition within countries for development resources.
It is within this funding gap that truly innovative mechanisms of funding global health are developing. By no means are these efforts meant to replace traditional development assistance, but they are meant to complement existing programs. The goal is to not only increase funding but also to leverage existing funding to be more productive in order to have a sustainable positive effect on global health.
A number of mechanisms for innovative financing have been developed over the last several years. These include voluntary micro-contributions by individuals on services including travel and mobile phone use, taxes on services such as airline tickets, branded trademark sales that direct a proportion of sales into financing programs, buy-down debt programs and the issuing of bonds in capital markets. Many additional mechanisms are being explored including levies on foreign exchange transactions, voluntary 1 % waiver of VAT and auctioning of permits to emit greenhouse gases. These efforts have raised over two billion dollars.
Innovative financing efforts have also proved to increase value for money of current funding levels by accelerating the implementation of programs in country with greater efficiency. The Pledge Guarantee of Health (PGH) has made it possible for governments to obtain funds based on pending commitments to allow the execution of critical health programs in both a timely and more efficient fashion. This type of financing effort has assisted programs including malaria net distribution ahead of peak infection periods and contraceptive implants to avoid stock-outs.
The opportunities presented by innovative financing are endless. No longer are we constrained by health models based upon large donor to developing country donations. Technology allows us to link individuals with means- to individuals with needs. We have the opportunity to make the health and well-being of our global neighbors our personal responsibility, and to participate in assisting them directly as evidenced by internet based efforts to provide maternal care funding through individual donations.
While financing options are limitless we are still faced by many challenges. Some groups continue to be at significant risk, particularly women and girls. MDG5, the reduction of maternal deaths and achievement of universal access to reproductive health, remains unmet and underfunded. We highlight these issues in a special section of this issue because in order to meet MDG5 we must explore additional innovative financing mechanisms. Increased awareness of violence against children and forced child marriage is necessary to promote future economic development in many countries. The advancement of women itself is a study in innovative financing. Increasing employment of women improves GDP. Improved economic status of women leads to direct, local reinvestment resulting in improved education and health services and reduction in poverty.
As we enter into a new year we need to be invigorated by the efforts of all of the authors featured in this edition of GHD news and look within ourselves for innovative solutions to the challenges that face us all.
— Joanne Manrique