PHM-Exch> Economic Governance for Health #9

[Claudio Schuftan]

  **
*Welcome to the EG4H Newsletter!*

*Newsletter 9, 14th September 2009*

In this newsletter from EG4H...

§             *Tobin or not Tobin? That is the question...* - Find out why
the Tobin Tax has resurfaced as a way to respond to the crisis in funding
for the health MDGs

§             *$10 billion financing gap to scale up the health MDGs* - read
about the data behind the numbers

§             *The IMF needs more than guidance and support: it is time for
a complete overhaul* - Why EG4H is against a Global Economic Council for the
IMF

§             *Just Out!* Links to the latest writing and events on economic
governance for health**



*Are you interested in helping us get the word out about the importance of
economic governance for health?*

Would you like to do more and join our active campaign outreach network? We
have an expanding number of 'outreachers' who help *amplify* our
message. Typically
they do this by:

§             Forwarding information about EG4H to their own network of
contacts and lists

§             Encouraging people to respond to an EG4H request or to take up
action on an event we are promoting.

§             Translating EG4H primers or communications into additional
languages

*If you are interested in joining* this network of active campaigners, or
can suggest organizations - or better still *key people within those
organizations* - whom we should contact, please send an email to
info at eg4health.org

*Tobin or not Tobin, that is the question...*



The brain child of Nobel prize winning economist James Tobin, the idea
behind the 'Tobin
Tax<http://madmimi.com/redirects/d5dfdd76e0a844d2f1af1eaeb8ae9ae2?pa=228999508>'
is that a tax would - and should - be levied on the currency market. Trade
in currency - essentially betting on whether the value of a currency will go
up or down - is a massive market: approximately $1.8 *trillion* of currency
are traded every day. The idea has been largely ignored by politicians since
it was first mooted in the 1970s because of pressure from the banking
sector, who would incur a small cost - 10-25 cents for every $100. But the
potential benefits are huge - $100-300 billion every year to spend on global
priorities.

*Banking: a "socially useless activity"*

The Tobin Tax is in the news again this month because UK Financial Services
Authority chairman, Lord Turner is supporting renewed calls to
establish a *Currency
Transaction Levy* (CTL) - a Tobin Tax by any other name. Civil society
campaigners developed the idea prior to the G20 meeting in London earlier
this year, and Turner's support for it has caused outrage in the banking
sector; although describing much of the activity of London bankers as
"socially useless", may also have had something to do with it. However, the
CTL proposal comes at a time when the UN is estimating a $5 billion
shortfall<http://madmimi.com/redirects/2c93d57985a87dd42aca723a70357ae9?pa=228999508>for
international aid projects, and when the Global Fund is facing a $3
billion deficit<http://madmimi.com/redirects/aa048a455034a5f6cc4a48eae2dd0673?pa=228999508>.
Clearly, it is a vital time to be pushing governments to adopt such
innovative reform.

*Support for the Levy*

The UK-base NGO Aids
Alliance<http://madmimi.com/redirects/54f1f70f206cfd48b2bf72d0b73a81fc?pa=228999508>is
actively campaigning for the CTL, arguing that a levy of just 0.005%
on
major currencies could fill much of the funding gap needed to achieve the
health Millennium Development Goals by 2015, including reducing child
mortality, improving maternal health and combating AIDS, TB and malaria.

And as the UK's Guardian
newspaper<http://madmimi.com/redirects/7d56d336899d2a194f9a0a77fc19177d?pa=228999508>reported,
Philippe Douste-Blazy, the former French foreign minister now the
UN's secretary-general's special adviser on innovative financing for
development has also lent his support to the idea. If, as is becoming
increasingly likely, investment from western countries decreases and aid
commitments fail to reach countries in need, Douste-Blazy's blunt assertion
is undeniable: "We can't continue like this. We have to redefine the
system."

*$10 billion financing gap to scale up the health MDGs - the data behind the
numbers*



As we reported in Newsletter
8<http://madmimi.com/redirects/af83789fe60daa749a349849767c3252?pa=228999508>,
the HIgh Level Taskforce on International Innovative Financing recently
reported a figure of $10
billion<http://madmimi.com/redirects/33cf169d0dc3761e75e9a90baca88f44?pa=228999508>.pdf)
as the 'top-up' required for international donors to meet their Abuja
commitments to development. EG4H argued then that this figure was too low
and asked for the data behind this calculation to be made publicly
available.

The WHO has now published a paper that lays out the details of the costing
estimates<http://madmimi.com/redirects/93446f071219b8a63facdb83d53ac2f2?pa=228999508>used
by the Taskforce. Whilst the Report provides detailed presentations of
year-by-year financing by program, and details the interventions included in
the costing estimates, it does not provide the country-by-country figures
EG4H has been calling for.

*The IMF needs more than guidance and support - it is time for a complete
overhaul*



In a recent article in the Financial Times - Global economic council should
oversee all<http://madmimi.com/redirects/f9c663802fd671981ccc59a98c0d4d68?pa=228999508>-
Timothy Adams and Arrigo Sadun present an argument for superceding the
G20
and G8 with a Global Economic Council or *Gleco*. They argue that Gleco
would "oversee the proper functioning of the global economy and the
stability of the international financial system by providing close political
support and strategic guidance to all international financial institutions",
including the IMF and World Bank.

What Adams and Sadun fail to mention is that the IMF has had political,
institutional, and financial support and guidance for the last fifty years
by the wealthy countries of the global north, often at the expense of
countries in the global South that have had little say in the institution's
liberal financial policy reforms. EG4H represent a growing campaign to
harness the voice of the health community – health workers, academics and
activists – in advocating for change in the global institutions that govern
the global economy. We argue that instead of the formation of Gleco, the IMF
should be opened to further democracy so that the interests of the global
south who are affected the most by IMF policy are fairly represented.

But EG4H goes one step further in its critique of the world's financial
institutions. The IMF, World Bank, and others could become the most
democratic institutions on the planet *and still* expound global economic
policies that impact negatively on health. And they do impact negatively on
health, as the WHO's Commission on the social Determinants of Health
reported so clearly in its 2008 Report.

It is missing the point completely to argue for a new oversight mechanism -
such as Gleco - that simply helps the IMF discharge its economic policies
more effectively. It is the policies themselves that require radical
overhaul: away from the blind neo-liberal policies of the past, and towards
policies directed at improving the well being of the poorest as a central
concern, and which are sufficiently transparent to avoid inappropriate
policy capture within ostensibly democratic structures.



*Just out! Links to the latest writing and events on economic governance for
health*

*The impact of the financial crisis on conflict and state fragility in
sub-Saharan Africa<http://madmimi.com/redirects/925f0ff7ae6164a8a1e1cb8927b806d9?pa=228999508>
** by Shiv Bakrania and Brian Lucas*

In this paper from the Governance and Social Development Resource
Centre<http://madmimi.com/redirects/31c518066a881548a6231e5b3733f063?pa=228999508>,
the authors explore the conflict and fragility dimensions of the financial
crisis in Sub-Saharan Africa – asserting there is currently little in-depth
information available.

*The global financial crisis: risks for fragile states in
Africa<http://madmimi.com/redirects/8bc247e3bd34ca15751fc6c767e4cad9?pa=228999508>
** by Timothy Othieno *

In this Opinion piece from the Overseas Development Institute, the author
argues that OECD-DAC donors need to at least maintain their aid commitments
to African states to counter the effects
of the global financial crisis that has the potential to exacerbate state
fragility in Africa.
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