As leaders gathered in New York last week for the United Nations General Assembly, much of the discussion focused on how to do more with limited resources.
Aid from wealthy countries to fight disease and poverty in the developing world has saved countless lives over the past decade. But in these hard economic times, we cannot blindly rely on donor governments to endlessly reach into their budgets to give more. Rather, we must think creatively about new ways to financially support global health and development goals.
The term for this is "innovative financing for development." We believe it is the next frontier in the fight against global poverty and disease.
After more than a decade of steady increases in funding for global health and development programs, foreign aid is flatlining and in many cases dwindling. This will leave millions without prevention and treatment in years to come. Funding for HIV/AIDS alone dropped 10% in 2010. The United States has scaled back overseas development assistance programs.
These cuts are coming just as investments in global health programs are showing significant returns. Thanks to investments in childhood vaccines, over 80% of children around the world are protected from measles. Polio, once a global scourge, is on the verge of eradication. For the first time since its discovery, HIV/AIDS is on a retreat thanks to 6.6 million people receiving antiretroviral therapy in developing countries.
This is all good news, but there is still much more to be done. Nine million people with HIV/AIDS cannot access treatment. The statistics surrounding women's health are even more alarming. 215 million women in developing countries do not have access to modern contraception and an estimated 500,000 women die each year during childbirth.
Faced with impending fiscal constraints, the international community has devised several promising financing models to protect investments in global health.
One of these is the Pledge Guarantee for Health (PGH), which was developed through a collaboration of the Reproductive Health Supplies Coalition, the Global Leadership Council for Reproductive Health, the UN Foundation and the Bill & Melinda Gates Foundation. PGH is a financial tool that borrows several ideas on trade finance developed by Wall Street, but applies it to the procurement of health commodities like anti-Malaria bed nets, contraceptives and medicines. A donor serves as a guarantor to lending institutions and manufacturers to ensure they will be paid on time and in full. This stretches the value of the donor dollar and hastens the delivery of these commodities to the people who need them.
In February, PGH ensured that 800,000 bed nets arrived in Zambia months ahead of schedule -- and before the peak rainy season. Later this month, PGH will use a receivable financing strategy to enhance affordability and ensure increased access of vital contraceptives developed by leading pharmaceutical manufacturers.
Let us be clear, the international development community must still find new funding sources if we are to sustain progress in global health. However, through innovative approaches like PGH, the ability to stretch donor dollars is increased.
Yet another promising example of innovative financing is the International Finance Facility for Immunizations (IFFim), which sells bonds on capital markets that are backed by the long-term commitment of a few donor countries. The Global Alliance for Vaccines and Immunizations (GAVI) uses these funds to purchase childhood vaccines worldwide.
The looming era of budget austerity has spawned a wave of creativity. We can no longer exclusively depend on the good graces of donor governments alone. If we are going to sustain the incredible gains in global health that we have made over past decade, we are going to have to keep exploring innovative ways to support these projects.
Muhammad Yunus is the founder of the Grameen Bank and winner of the 2006 Nobel Peace Prize. Gro Brundtland is a board member of the Global Leaders Council for Reproductive Health, the former Prime Minister of Norway, and the Director-General Emeritus of the World Health Organization. Both serve on the board of directors of the United Nations Foundation.
How will Donald Trump’s first 100 days impact YOU? Subscribe, choose the community that you most identify with or want to learn more about and we’ll send you the news that matters most once a week throughout Trump’s first 100 days in office. Learn more