[stop-imf] World Bank And IMF Preventing Transfer of foreign Aid To HIV/AIDS Programmes

[Robert Weissman]

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Medical News Today


     World Bank And IMF Preventing Transfer of foreign Aid To HIV/AIDS
     Programmes

20 May 2005

Multilateral financial organisations that aim to reduce poverty are
preventing foreign aid from reaching HIV/AIDS programs in developing
countries, states an article in this week's issue of The Lancet.

Ted Schrecker (University of Ottawa, Ontario, Canada) and Gorik Ooms
(M=E9decins Sans Fronti=E8res, Brussels, Belgium), state that expenditure
ceilings for public health, created by the World Bank and the
International Monetary Fund (IMF), stop countries from benefiting from
outside investment in their health programmes. To receive debt relief
countries must provide the IMF and World Bank with a poverty reduction
strategy. Most strategies include spending targets or ceilings for
various sectors of government activity. These ceilings exist because of
concerns that rapid inflows of foreign exchange associated with
increased aid can drive up the value of the recipient country's currency.

The result would be to increase the price of exports, thereby
undermining competitiveness. However, ceilings create a clear
disincentive for external donors to offer desperately needed financing,
state the authors. This is because the IMF requires that countries
include the value of all new donor funding received for initiatives,
such as scaling up antiretroviral treatment, in their health budgets. If
a sector receives any new funds that were not initially budgeted for, a
comparable amount must be cut from the budget.

The authors use the situation in Uganda as an example of the effect of
expenditure ceilings. In September 2004, the IMF claimed no funds for
HIV/AIDS projects had been rejected by Uganda because of expenditure
limitations, while conceding that only US$18=956 million of the $201
million approved for Uganda by the Global Fund to Fight AIDS,
Tuberculosis and Malaria had been disbursed.

The authors comment: =93[The existence of public health expenditure
ceilings] reveals the dark underside of the industrialised world's grand
rhetoric about improving the health of the poor. =93At the very least, the
World Bank and the IMF owe the developing world an unequivocal
commitment that they will be part of a solution to the health funding
problem, instead of perpetuating it.=94

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