Fi­nanc­ing health and ed­u­ca­tion for all

Financial Mirror (Cyprus) - - FRONT PAGE -

In 2015, around 5.9 mil­lion chil­dren un­der the age of five, al­most all in de­vel­op­ing coun­tries, died from eas­ily pre­ventable or treat­able causes. And up to 200 mil­lion young chil­dren and ado­les­cents do not at­tend pri­mary or sec­ondary school, ow­ing to poverty, in­clud­ing 110 mil­lion through the lower-sec­ondary level, ac­cord­ing to a re­cent es­ti­mate. In both cases, mas­sive suf­fer­ing could be ended with a mod­est amount of global fund­ing.

Chil­dren in poor coun­tries die from causes – such as un­safe child­birth, vac­cinepre­ventable dis­eases, in­fec­tions such as malaria for which low-cost treat­ments ex­ist, and nu­tri­tional de­fi­cien­cies – that have been al­most to­tally elim­i­nated in the rich coun­tries. In a moral world, we would de­vote our ut­most ef­fort to end such deaths.

In fact, the world has made a half-hearted ef­fort. Deaths of young chil­dren have fallen to slightly un­der half the 12.7 mil­lion recorded in 1990, thanks to ad­di­tional global fund­ing for dis­ease con­trol, chan­nelled through new in­sti­tu­tions such as the Global Fund to Fight AIDS, Tu­ber­cu­lo­sis, and Malaria.

When I first rec­om­mended such a fund in 2000, skep­tics said that more money would not save lives. Yet the Global Fund proved the doubters wrong: More money pre­vented mil­lions of deaths from AIDS, TB, and malaria. It was well used.

The rea­son that child deaths fell to 5.9 mil­lion, rather to near zero, is that the world gave only about half the fund­ing nec­es­sary. While most coun­tries can cover their health needs with their own bud­gets, the poor­est coun­tries can­not. They need about $50 bil­lion per year of global help to close the fi­nanc­ing gap. Cur­rent global aid for health runs at about $25 bil­lion per year. While these num­bers are only ap­prox­i­mate, we need roughly an ad­di­tional $25 bil­lion per year to help pre­vent up to six mil­lion deaths per year. It’s hard to i mag­ine a bet­ter bar­gain.

Sim­i­lar cal­cu­la­tions help us to es­ti­mate the global fund­ing needed to en­able all chil­dren to com­plete at least a high-school ed­u­ca­tion. UNESCO re­cently cal­cu­lated the global ed­u­ca­tion “fi­nanc­ing gap” to cover the in­cre­men­tal costs – of class­rooms, teach­ers, and sup­plies – of uni­ver­sal com­ple­tion of sec­ondary school at roughly $39 bil­lion. With cur­rent global fund­ing for ed­u­ca­tion at around $10-15 bil­lion per year, the gap is again roughly $25 bil­lion, sim­i­lar to health care. And, as with health care, such in­creased global fund­ing could ef­fec­tively flow through a new Global Fund for Ed­u­ca­tion.

Thus, an ex­tra $50 bil­lion or so per year could help en­sure that chil­dren ev­ery­where have ac­cess to ba­sic health care and school­ing. The world’s gov­ern­ments have al­ready adopted these two ob­jec­tives – uni­ver­sal health care and uni­ver­sal qual­ity ed­u­ca­tion – in the new Sus­tain­able Devel­op­ment Goals.

An ex­tra $50 bil­lion per year is not hard to find. One op­tion tar­gets my own coun­try, the United States, which cur­rently gives only around 0.17% of gross na­tional in­come for devel­op­ment aid, or roughly one-quar­ter of the in­ter­na­tional tar­get of 0.7% of GNI for devel­op­ment as­sis­tance.

Swe­den, Den­mark, Nor­way, the Nether­lands, Lux­em­bourg, and the United King­dom each give at least 0.7% of GNI; the US can and should do so as well. If it did, that ex­tra 0.53% of GNI would add roughly $90 bil­lion per year of global fund­ing.

The US cur­rently spends around 5% of GDP, or roughly $900 bil­lion per year, on mil­i­tary-re­lated spend­ing (for the Pen­tagon, the CIA, vet­er­ans, and oth­ers). It could and should trans­fer at least $90 bil­lion of that to devel­op­ment aid. Such a shift in fo­cus from war to devel­op­ment would greatly bol­ster US and global se­cu­rity; the re­cent US wars in North Africa and the Mid­dle East have cost tril­lions of dol­lars and yet have weak­ened, not strength­ened, na­tional se­cu­rity.

A sec­ond op­tion would tax the global rich, who of­ten hide their money in tax havens in the Caribbean and else­where. Many of these tax havens are UK over­seas ter­ri­to­ries. Most are closely con­nected with Wall Street and the City of Lon­don. The US and Bri­tish gov­ern­ments have pro­tected the tax havens mainly be­cause the rich peo­ple who put their money there also put their money into cam­paign con­tri­bu­tions or into hir­ing politi­cians’ fam­ily mem­bers.

The tax havens should be called upon to im­pose a small tax on their de­posits, which to­tal at least $21 tril­lion. The rich coun­tries could en­force such a tax by threat­en­ing to cut off non­com­pli­ant havens’ ac­cess to global fi­nan­cial mar­kets. Of course, the havens should also en­sure trans­parency and crack down on tax eva­sion and cor­po­rate se­crecy. Even a de­posit tax as low as 0.25% per year on $21 tril­lion of de­posits would raise around $50 bil­lion per year.

Both so­lu­tions would be fea­si­ble and rel­a­tively straight­for­ward to im­ple­ment. They would un­der­pin the new global com­mit­ments con­tained in the SDGs. At the re­cent As­tana Eco­nomic Fo­rum, Kaza­khstan’s Pres­i­dent Nur­sul­tan Nazarbayev wisely called for some way to tax off­shore de­posits to fund global health and ed­u­ca­tion. Other world lead­ers should rally to his call to ac­tion.

Our world is im­mensely wealthy and could eas­ily fi­nance a healthy start in life for ev­ery child on the planet through global funds for health and ed­u­ca­tion. A small shift of funds from waste­ful US mil­i­tary spend­ing, or a very small levy on tax havens’ de­posits – or sim­i­lar mea­sures to make the super-rich pay their way – could quickly and dra­mat­i­cally im­prove poor chil­dren’s life chances and make the world vastly fairer, safer, and more pro­duc­tive. There is no ex­cuse for de­lay.

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