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This Week in Global Development
Could taxes fix the global health funding crisis?
00:23:32
This week, we discuss https://www.devex.com/news/the-accra-reset-time-s-up-for-the-legacy-aid-system-110845 an effort to declare an end to the era of development-as-usual and to push for the creation of new governance, business, and financing models....
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- [00:00]
A
Foreign My name is Rumbi Chakamba and you're listening to this week in Global Development hosted by myself, Ada Seldinger and David Ainsworth. I'm joined by our global health reporters, Sarah Jerving and Andrew Green. And we're going to dig into what happened at Unger as well as look ahead at the World Health Summit coming up soon. Hi guys. Hello. It's such a treat to have you guys here because we work so closely together. So it's always so fun to have like a conversation with the two of you. So last I was a Ganga, it was hectic as usual and a lot of global health discussions happening there. For me, I think the consensus is we can't do things the way that we're doing them before. And it seems like everyone is in agreement that we need to move through to a country led system that eliminates inefficiencies, that eliminates silos. And something that's at the center of this is the Accra agenda that's being led by Ghana's president. Sarah, you have a story out on this? The story is out today actually, so please do check it out. You have a story out on this. Can you explain to us what the Accra agenda is?
- [01:10]
B
Absolutely, yeah. Everyone's pretty excited about the Accra Agenda, the Accra Reset. So it all had its genesis back in August when there was a African health sovereignty summit in Accra and health leaders met and heads of state from African governments met to talk about kind of a, how countries were going to do kind of manage this new reality of less foreign, foreign aid. And so they came forward with an Accra initiative. And then last week at unga there was another meeting where the Accra reset was launched. And that was kind of a broader discussion of or kind of a broader vision that talks about restructuring international development as a whole, kind of recognizing that you can't just do a restructuring of health in a silo. And so within the Accra Reset, health will be kind of a proof of concept because the health sector has been really dependent on international aid. And so kind of lessons learned from the health sector will be expanded to areas like food security and climate change and whatnot, climate finance. And as you mentioned, it's led by the President of Ghana. And one of the kind of the bigger themes of it is kind of not a rejection of the, the, the legacy aid system, but a recognition that kind of after the system Sustainable Development goals expire in 2030, the world shouldn't just come together and create a new set of Goals. What the world needs in this reset is more of a kind of business models and institutions and plans in that, in that model, kind of partnerships with the private sector are kind of a more appropriate way to move forward. And one of the things that happened last week was that the President of Ghana also launched a President's Council and that's going to be accompanied by a high level council of people from different sectors. And they will kind of serve as kind of a ground to figure out and kind of refine these new models. And I think one of the things the experts are saying is that it's really important to have that high level political commitment to ensure that this reset is kind of felt across, across government.
- [03:36]
A
So one thing I found really interesting at Angor were the conversations or the talking points from US government officials. So a lot of the things that you're mentioning within the Accra reset actually are in the global health strategy, or maybe a lot of the same words are used in the US's global health strategy. And a lot of the officials there were saying that they've been speaking to African leaders and African presidents and they are kind of in alignment with what the health strategy actually states. States. And this is more of like having these bilateral agreements, having the private sector leading more. But it also leaves the question, where does it leave, like all the health institutions that have been embedded in this global health architecture that's there. Andrew, are you hearing the same thing and are you hearing less about global health institutions being focused or leading this charge?
- [04:28]
C
Yeah, I think that's right. I think there's a lot of questions. I mean, already there was obviously a lot of questions about the funding of these institutions moving forward because the United States was such a big contributor to their bottom line. So with that money withdrawn, it's a question of what they're capable of doing. But then this seems to be kind of another blower, another step back for those institutions if they're not kind of positioned within the architecture of these responses, if they're being cut out. I mean, you mentioned the America First Global Health Strategy, which is attempting to essentially cut out all NGOs. And we've seen a lot of restructuring at UNAIDS who kind of really diminishment of their role moving forward. It does seem like it's, it's private sector and government first and then everyone else taking a step back.
- [05:06]
A
Yeah. And speaking of UNAIDS, also at ANGA this week as part of the UN80, which is the restructure of the UN as a whole, the Secretary General announced part of his restructure plans and that included sunsetting UN AIDS next year. So UN AIDS had actually spoken about sunsetting previously. They had said that they are reforming, slimming down their structure by quite a bit, as you mentioned, Andrew. And they're going to have a meeting in 2027 to Dec. If the agency can then can then sunset by 2030. So their timeline was looking at 2030. Secretary General's timeline was looking at 2026. And I think we now have a bunch of campaigns saying that 2026 is too close, is too close. What are you hearing around this, Andrew?
- [05:53]
C
I think there was immediate outcry, especially from civil society and people on the ground. I mean, there was, as you mentioned, an expectation that perhaps UNAIDS was going to sunset sometime in the future. We're, you know, the global community is in the midst of an effort to end AIDS by 2030. And that was a UNAIDS target that was set. So UNAIDS is really leading that effort. So if they're going to be gone by 2026, then it becomes a question of is this going to be sustainable, to attempt it to end aids? PEPFAR and other countries have rallied their entire response around and that's kind of the structure. I think there's also a particular concern because as we're talking about the shift in financing toward bilateral agreements in the private sector, there's a real concern among vulnerable communities that they're going to be left behind, especially in the AIDS response. And so if you UN AIDS was really kind of the avatar or the leader of making sure that groups like men who have sex with men, sex workers are included in this response, that their voices are heard. And so if you pull them out of the conversation, you also pull NGOs out of that conversation. I think there's a real fear that they're going to be left behind.
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A
Yeah, I really understand that argument, but I also feel like at some point I think something's gotta go because the money just simply isn't enough to finance all these institutions. And we're actually seeing it because this year was a big replenishment here this year and last year were big replenishment years. And we're seeing a lot of organizations struggling to meet their targets for replenishments, wondering what will have to go. And going back to the ACCRA reset, Sarah, does it make any rifts to these global health institutions? And I know you actually dug a little bit into the America first global health strategy. Can you take us through what America first means for the big global health institutions.
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B
There's two different kind of elements of what's happening in Washington D.C. right now. There's the State Department's kind of overarching strategy, the America First Global Health Strategy. And then there was also a bill that's been proposed by Congress by Representative Brian Mast and that gives this discussion of global health compacts and that's that bilateral relationship between the US and partner governments. And that would be kind of this direct relationship. They're kind of these two, these two different elements that are working in tandem, but that would have to kind of push through, through both houses or, excuse me, both the House and the Senate in Congress before it would be signed by the President, President Trump. But anyways, that that proposed language, one of the things that we reported on last week was that, you know, like the African Union and Africa CDC would be explicitly prohibited from working on those global compacts. And the Africa CDC put out a statement last week kind of expressing concern about that and saying there could be diplomatic consequences to that. And kind of further clarification made it clear that it's simply that these compacts would not necessarily include multilateral institutions like Africa cdc. But that doesn't mean that the US Government wouldn't work with multilateral organizations. And one of the things that the strategy says is that yes, these kind of bilateral relationships we prioritize, but multilateral relationships could also come into play. And so it's not kind of a, we're likely to see kind of that continued use of multilateral institutions to roll out the US Government strategy, but just a greater emphasis on the abstract relationship.
- [09:26]
A
I feel like the US Took center stage at Unger. It was bound to because of all the things that are happening and all the change in strateg priorities, etc. But another thing that I noticed is a change in language. I reported on a story on Malaria no More making the Economic case for investing in Malaria. I think a lot of people are now using that language like instead of it being a public good, it's now like this makes sense financially. This is going to keep Americans safe. Are you seeing a lot of that language change happening as well, Andrew?
- [09:58]
C
Yeah, I think it's been a really interesting pivot how quickly that's happened. Of course there's always this, this kind of investment case that was being made around global health investments in the past, but now it's really coming to the fore, especially as people are looking to the private sector to start taking a stronger role in the global health response. So I think there's in order to justify that there's a real push to, to focus on the money that can be saved.
- [10:20]
A
And America obviously, well, not obviously America surprised me. Everyone was waiting for Donald Trump speech. I think there were no, not a lot of surprises there. It was quite interesting. A lot of shocking moments, but not a lot of surprises. But what actually surprised me is what happened at the NCD high level meeting. So that was my first high level meeting. I don't know if you guys have attended a high level meeting, but it wasn't what I expected, so. Because for those who don't know, there was an NCD high level meeting at this year's UN General assembly and they had been negotiating text for a declaration for a long time. So my assumption was we're going to go into there, we'll have a few high level speeches, everyone's going to adopt this agreement and maybe we have a photo opportunity. But it turned out to be like the same thing as the UN process or the WHA process where countries just stand up and they all give like their statements, their speeches, etc. So it took the whole day, which I was not expecting first of all. And then America surprised us as usual and they say they are pulling out of this declaration. What surprised me was RFK Jr made the speech on behalf of America and he acknowledged the burden of NCDS in the country. He acknowledged that this is important to America. He acknowledged that Donald Trump is pushing for this and this is important for his agenda. But they will not sign up to this declaration. He spoke about the language in the text, he spoke about possibly having abortion language in the text which does not exist. He spoke about the leadership of who saying that WHO needs to reform. They cannot take a leadership role in this. So for that reason America is pulling out. And what I learned at the meeting was that they had agreed that they would approve the text by consensus. So because there is no consensus, this will probably take another month and it will go to a General assembly meeting where they will now vote on this and chances are it will be approved. Because I think what we're hearing is only two countries are saying that they're not signing up, which is Argentina and the US So were you guys also surprised by this? And is this just America saying we're not gonna perform, we're not gonna in multilateral agreements? Because for me, I just did not understand why.
- [12:37]
B
Yeah, it seemed like the NCD declaration was widely supported. One of the things that, I mean there has been concern with this process is that it already has kind of industry pressures to water it down and so it doesn't seem, it didn't seem kind of going into this, that this would be such a controversial document. So I think I was surprised that there was objections to it.
- [13:02]
A
Yeah. And the objections that were raised by the US Government were so different from objections that everyone else was raising, which you highlight. Sarah, Andrew, can you take us through the objections that everyone else had with this agreement? They were willing to move on with it, but they did raise objections to it.
- [13:20]
C
Yeah, I think there was a lot of concern about the industry pressure that was brought to bear, as Sarah said, to water down the agreement. So a key component of this was an idea of introducing health taxes on some products that are responsible for NCDs, especially in low and middle income countries. So you're thinking like cigarettes, sugary beverages, alcohol. And there's been a real push as we're going to talk about, I think, to, to introduce these health taxes and as a way to mitigate the purchase and use of these products. But you know, the WHO and other organizations that are leading these efforts have pushed for really high taxes and of course the industry doesn't want them at all. So. And you saw a real negotiating down, so real reduction of what, what countries are being asked to do under the terms of the agreement. It does kind of make you wonder with the United States pulling out and the United States being such a backer of industry's efforts in watering this down, if maybe there's an opportunity to kind of strengthen that again if the US isn't going to support them anyway. I gather it's probably too late for that, but I think a lot of people would be happy to see see those numbers go back up.
- [14:16]
A
Yeah, I think one of the first drafts had actually had targets sitting there and this draft that they were announced discussing at the high level meeting did not have any of those taxes.
- [14:33]
D
Are you interested in the intersection of business and social impact? Do you want to know how corporate sustainability, esg, impact investing and more can contribute to development finance? My name is Adva Saldinger. I'm a senior reporter at devex and I've been reporting on these issues for nearly a decade. I'm the author of Devex Invested, our free weekly newsletter dedicated to development finance. Every Tuesday we explore how companies, investors and market mechanisms are reshaping the world of development finance. Visit devex.com newsletters and join us on Tuesdays.
- [15:12]
A
But how taxes are actually being touted as a way that countries can actually contribute more towards their health budgets. And looking at domestic resources, they're looking at this as really a way that countries can start paying more. But it's not as easy as we want to start making money out of this. And a couple of months down the line, we have a health tax in place and we're contributing towards our budget. And Andrew, you're actually looking into this. Can you tell us why it's so challenging?
- [15:41]
C
Yeah, I was. So I was struck by something you said earlier in terms of the kind of reframing of the way that people approach health issues. So for 20, for decades, health taxes have been approached as, here's a way to reduce NCDs, as we were just discussing. You know, you introduce these taxes, people purchase less and then they have less cardiovascular disease, less emphysema. Other problems. There's been a switch since the cuts to U.S. funding and cuts by Europe and other countries and countries in other places, a switch to focusing on how much money countries can make if they implement these taxes. And so you have institutions like one led by Michael Bloomberg saying that countries can raise up to 3.7 trillion doll if they implement these taxes over the next five to ten years. And I, you know, I, I saw those numbers and I've seen a lot of emphasis on looking at this as a way to make up for the deficits that countries now face, especially when it comes to financing their health systems. And I have to admit, I was a bit skeptical. I mean, those numbers seem really high. And so as I started to dig into it, you, you start to understand all the challenges that stand in the way of implementation and specifically of implementation at the level that who Michael Bloomberg and others are pushing for, which is a 50% and 50% increase in the rates. You know, obviously you have industry that's going to play a huge role, as we've already talked about, in trying to push back on this. But also a lot of countries don't have the regulatory systems in place to both put these taxes in place and then also to enforce them. And so that's going to be a major challenge countries have to address before they can kind of get these, before they can start accruing the kind of money that we're talking about. And then the other issue is you have to show that they're working because otherwise you're going to lose political and popular support for these taxes. You know, people don't want to pay more for these products. And so, you know, Zimbabwe is having this problem right now. They've implemented attacks that they promised would be channeled into fighting cancer within public hospitals. And there's a lot of outcry now by the opposition because they're not seeing the kind of returns, the kind of investments that they were expecting. And so then that can kind of. There's a risk that. That diminishes the support for the taxes. And so. So there's a lot of issues that go into making sure that these are actually successful.
- [17:42]
A
Which brings us into the broader challenge of domestic resource mobilization, because I think one of. I think African countries are generally not really good at collecting, and that's probably because of, like, the services. Like, you've both lived in Africa, right? Sarah's in Kenya right now. Andrew, you stayed in Uganda for a long time. But then the services that come with tax collection leave people wondering where the money actually goes. And it makes it very difficult for countries to out for residents to want to pay the taxes to begin with and then for countries to actually collect them. Do you see that as well, Sarah, this sort of reluctance or.
- [18:19]
B
Yes, yes, very much so. Like, as you mentioned, I'm in Kenya and there's just. There is a really strong outcry at the suggestion of raising taxes. And as Andrew mentioned, you need to kind of have that trust in the government that they're. That the citizens are actually like, paying into a system that they're going to benefit from. And that's. That can be. Can be tricky. And just to the larger kind of conversation around health spending, there was the Abuja Declaration, which, if I Remember correctly was 2001, asked countries to dedicate 15% of their budgets to health spending. And that has not widely been. I mean, a few countries have succeeded in reaching that from, like, you know, specific years and whatnot, but it's just not broadly been realized across the continent. So kind of what can be done to ensure that, like, not only health experts in countries, but actually the Ministry of Finance and other people across the government are really committed to increasing spending has been a real challenge across the continent.
- [19:23]
A
Yeah, I've spoken to a lot of, like, health leaders around the Abuja Declaration, and I spoke to our former minister, Minister of Health here in Botswana, and she was able to actually meet that target. And she says it's like a question of political will. But when you also look at the moment that we're in right now, there are so many priorities and so many things, so many gaps to be filled, actually, that were created by the US's withdrawal. And it's hard to imagine, you're saying it's hard to imagine meeting those targets, and it's hard to imagine countries actually raising those that amount of money to actually fill in the gaps. Which brings me to something that I want to mention, a little plug as before we go into the next section, we are actually working on a series on the changing global health architecture on the future of global health. And we actually have a couple of stories up now. So if you haven't already, sign up to devex Checkup, which is the newsletter that we all work on to get that reporting. And coming up in DEVEX Checkup in the couple of weeks time will be the World Health Summit. Andrew will be at the World Health Summit and he will be writing Checkup from the World Health Summit and keeping us all informed. So Andrew, what can we look forward to at the World Health Summit? Do you think some of these issues that came up will carry on at the World Health Summit?
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C
Yes, definitely. So it's NCDs are one of the major tracks at the summit this year. I think probably in anticipation of the high level meeting and the declaration being approved by consensus, which didn't happen. So I'm wondering to what extent that's going to end to alter some of these conversations that were already going to be taking place at whs. And then the other kind of big elephant in the room there is exactly what we've been talking about, which is the global health architecture and who's going to pay for it moving forward. WHS is a very Europe focused, Europe centered discussion with a lot of leaders from across the continent. So it'll be interesting to hear what their reaction to the America First Global health strategy is, how they see themselves fitting within the kind of, of ecosystem that that might create, whether they're going to challenge it, whether we're going to see kind of additional retreat from Europe as we've seen when it comes to global health funding. But this is a real moment for them to say, to kind of put their stake in the ground and say here's, here's what we're going to be doing moving forward.
- [21:33]
A
And I'm also curious because I haven't been to the World Health Summit. What's the vibe like? I think the last time you spoke you said that there are a lot of like industry people who attend the World Health Summit.
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C
Yeah, so there are, there are some very industry focused, industry heavy gathering. So it's primarily leaders from Europe, leaders from some of the big multilateral organizations. And then you see a lot of pharmaceutical representation and also service providers. So Amazon kind of plays a big role there. The voices you're missing are civil society. They're really not very present at the World Health Summit. They never have been. And I've been going now for almost a decade. And so in some ways that lends itself to kind of these high level conversations that, that give you a picture of what leaders are thinking about the role that their countries and their industries are going to play. And on the other hand, there's not really a lot of challenge to that that takes place within the halls, at least.
- [22:23]
A
Yeah, that's really interesting. And Sarah, what are you working on in the next couple of weeks? What should we be looking forward to?
- [22:29]
B
Well, I think we're just going to be doing a lot of kind of focus on how the U.S. engagement in global health is evolving. And the U.S. has, has talked about kind of having these bilateral engagement agreements by the end of the year and that there would be some kind of bridge funding and kind of the changing role of implementing partners and NGOs and. Yeah, so just kind of, I think that's one of the big discussions that we'll be following is the ever changing face of the U.S. foreign aid to global health.
- [23:03]
A
Super interesting. And we'll definitely be on the lookout for stories from both of you. Like I said earlier, please sign up to devex checkup in order to get all these stories directly to your inbox. Thank you guys so much for joining me.
- [23:14]
B
Thanks for having us.
- [23:15]
C
Great to be here.