Does the IMF Constrain Health Spending in Poor Countries?

Featured Speakers: David Goldsbrough, Visiting Fellow, Center for Global Development

Ambassador Amina Salum Ali, Permanent Representative of the African Union to the U.S.

Abdoulaye Bio-Tchane, Director, African Development, International Monetary Fund

Jose Sulemane, Former Director for Planning and Budget, Ministry of Finance, Mozambique; Current Advisor to IMF Executive Director

Moderator: Nancy Birdsall, President, Center for Global Development

David Goldsbrough discussed the findings of the workgroup from the Center which focused on how IMF funding relates to health spending. He claimed that typically the conditions of IMF funds constrain health spending. Often, the IMF implements extremely conservative policies, meaning countries do not have enough flexibility in deciding how funds are allocated.

Goldsbrough touched on many problems with the IMF, including failure to explore alternative aid scenarios, sending mixed signals to donors and governments, and overusing wage ceilings, thereby risking economic stability. More broadly, he pointed out that health policy is often disconnected from macro policy, and that key fiscal decisions are made without grasping the full consequences, especially in terms of health.

Abdolaye Bio Tchane responded with the affirmation that there are problems in the IMF system and that steps are being made to correct some of the issues. He noted too, however, that often a country’s authorities have more power than they are given credit for, and often the lack of health spending is an effect of local budgetary constrains, rather than the fault of the IMF. He stressed the importance of macroeconomic stability, emphasizing that the main goal of IMF spending is to create more stable economies, which he claims they have somewhat achieved. He concluded that through current efforts aimed at increases in transparency and the effectiveness of aid, the IMF system will improve in the future.

Ambassador Amina Salum Ali and Jose Sulemane reflected the views of both Goldsbrough and Tchane. They concluded that lack of effective communication between the IMF, national authorities, and local government ministers has strained health care spending in Africa. Both agreed that higher priority must be given to health care spending in IMF and fiscal funding.

The panel concluded the event in unanimous agreement on the need for change. Policymakers at every level need a better understanding of the interconnection between economic stability and health policy needs. Tchane acknowledged that the IMF should reevaluate some aspects of their funding, but as Sulemane stated, it is also the responsibility of local government ministers to communicate the needs of the country to one another in order to effectively use the funds.

Sponsor: Center for Global Development

Location: Center for Global Development, 1750 Massachusetts Ave, NW, Washington, DC

Date: September 7, 2007

Time: 2:00pm-4:00pm

Approximate Number of Attendees: 75 People

Intern Attending: Rebekah McKnight