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The Significance of Cuts to Global Healthcare Funding

Global Healthcare Funding
President Trump’s budget request for the fiscal year of 2018 includes drastic cuts — 32 percent — from foreign aid. The drop of 4.6 billion in humanitarian assistance and global health spending comes along with a call for “the world to pay their fair share” in terms of global healthcare funding.

While the U.S. did contribute nearly one-third of the global spending on Development Assistance for Health in 2016, foreign aid makes up less than 1 percent of the national budget; that same year it was only 0.22 percent.  Looking at countries’ spending as a percentage of gross national income, the U.S. ranks 23rd for foreign aid and healthcare funding.

What Would Cutting Aid Mean?

Cutting foreign aid would lead to:

  • Less disease surveillance
  • Decreased diagnostic testing and vaccines
  • A shortage of research
  • Less life-saving medications
  • Fewer healthcare facilities
  • Instability
  • Decreased economic productivity
  • More deaths from curable or treatable diseases
  • Mitigated interest from local governments
  • Increased risk of domestic disease
  • Diminished soft power and global influence

The Brookings Institute forecasts that the domestic cut to foreign aid would drop healthcare funding from 39.2 to 28.8 billion, marking the lowest American investment in the last decade.

How Does Foreign Aid Help Global Healthcare?

Since pathogens such as zika, influenza, and Ebola are prone to spread across borders, aid cuts threaten the health of U.S. citizens. The Ebola breakout killed over 11,000 people; an additional 21,000 died due to a reduction in access to healthcare services.

Investment in surveillance programs greatly reduces the risk of a pandemic and eliminates the spending that an outbreak necessitates. The entire Ebola outbreak cost a total of $3.6 billion — $2.3 billion of which came from the U.S.

Foreign investment also inspires a response from local governments and organizations. By prioritizing health, global support helps to foster expectations that governments should do the same. Funding for HIV/AIDS research, testing and education have resulted in every African country possessing a national AIDS strategy and commission. Between 2011 and 2015, African countries increased their own funding by 150 percent.

How Does Promoting Healthcare Help the World?

Supplying vaccinations promotes prevention and may lead to a complete eradication of deadly diseases. Every dollar invested in childhood immunizations begets $44 in economic benefits, which includes saving money that families lose when a child is sick and the parent is unable to work.

Global healthcare funding and other types of humanitarian spending tend to increase a nation’s soft power — supporting basic human rights and humanitarian causes generally garner influence and respect. In aiding global healthcare funding, the U.S. is able to look out for foreign policy priorities, address national security concerns, and bolster global economic productivity and development.

A healthy individual will become a more productive member of society at large than his/her sick or dead peer; health is a direct determinant for economic stability.

Waves of Improvement

Bill and Melinda Gates sum up the importance of global healthcare funding in saying: “By preventing the spread of disease, we save lives in other countries and at home. By stimulating economic development, we open new markets for our country’s goods. By making conflict less likely, we advance our own national security. And by lifting up the poorest, we express the highest values of our nations.”

Global healthcare funding relates to each point, and thereby creates waves outside of the medical sector.

– Jessie Serody
Photo: Flickr

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Studies Find Americans Overestimate Foreign Aid Spending

Foreign Aid Spending
Much of what Americans believe about foreign aid spending is wrong. A recent Kaiser Family Foundation poll of 1,505 people found most couldn’t accurately place the percentage of its federal budget the U.S. spends on foreign aid. The average amount they guessed is 26 percent; the answer is less than 1 percent. Only one in every 20 people answered the question correctly.

Where do these misconceptions come from?

The U.S. spends more in net amount than any other country on foreign aid; the total came to some $32 billion in 2014. However, when looking at aid spending as a percentage of gross national income (GNI) , the amount the country and residents abroad take in as income, the U.S. spends a mere 0.19 percent of the wealth it receives each year in aid.

The American contribution falls flat behind larger benefactors like Sweden which donates 1.1 percent of its GNI, or Luxembourg at 1.07 percent and Norway at 0.99 percent.

The misconceptions of Americans regarding foreign aid are showing no signs of clearing up on their own. Another poll conducted by WorldPublicOpinion.org in 2010 found the median estimate Americans believe their country spent on foreign aid was 25 percent. When the poll asked them what would be an “appropriate” amount, the median answer was 10 percent.

These findings might even be humorous if so many people around the world weren’t living amid crushing levels of poverty. The erroneous views Americans hold of foreign aid spending have a direct impact on millions of people who struggle each day with hunger and a lack of economic opportunities.

Americans also host conflicting views regarding foreign aid based on their party affiliation. A survey conducted by yougov.com in 2016 revealed 49 percent of Americans identifying as Democrats believed U.S. aid should go to the poorest countries, while 59 percent of those identifying as Republicans believed aid should go to countries who support U.S. foreign policy.

Overall, 39 percent of Americans believed in aid for poor countries and 41 percent believed aid should be directed based on foreign policy support.

Our misconceptions of foreign aid influence how we think about the topic. In the Kaiser Family Foundation poll, 56 percent of those interviewed believed the U.S. spends too much on foreign aid.

However, when presented with the actual situation, namely the fact that the U.S. spends less than 1 percent of its $4 trillion federal budget on foreign aid, the poll found the number of Americans who think the U.S. is overspending on the aid dropped to 28 percent.

The wording of the questions also makes a difference. When the poll posed the question to Americans, “Do you think the U.S. is now spending too much, too little, or about the right amount on foreign aid?” 56 percent of respondents said too much.

However, when researchers modified the question to ask, “Do you think the U.S. is now spending too much, too little, or about the right amount in efforts to improve health for people in developing countries?” the percentage of those saying too much dropped to 28 percent.

Despite perceptions of corruption, elected officials tend to act in accordance with public opinion when faced with overwhelming support for spending measures. By dispelling the myths surrounding U.S. foreign aid spending, aid legislation will face less opposition as more Americans come forward to support it.

– Will Sweger

Photo: Flickr

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Where Could Your Foreign Aid Dollars Go?

Foreign Aid: What Could Your One Percent Do?In a recent poll, 81 percent of Americans said they believe that the U.S. has “a moral responsibility to work and reduce hunger and severe poverty in poor countries.” However, Americans also think that America is already spending a significant portion of its annual budget on foreign aid; when polled, some Americans thought the U.S. spent as much as 30 percent, more than is actually spent on Social Security or Medicare, when in reality only about 1 percent of the budget is allocated to foreign aid.

And while 1 percent of the American budget is a large sum in absolute dollars, even compared to other developed nation’s foreign aid spending, America does not rank in the top 15 industrialized countries when compared to the percent of its gross national income. Britain, who does make the top 15, spent about 6 percent of its gross national income in 2012, so while they are spending less money in actual dollars, they are willing to allocate a higher percentage of their budget toward assisting economically struggling countries.

As the American foreign assistance budget stands now, citizens pay pennies on the dollar toward saving and improving the lives of people living in poverty. The average median income for residents of Washington State in 2013 was $58,405. Households making the median annual income would have paid roughly $10,000 in income taxes. Of their tax money, about $100 would have been put toward foreign aid.

Foreign aid dollars are worked in a variety of ways. In 2012, the economic assistance budget of about $31 billion was split among spending on development assistance, migration and refugee assistance, international narcotics control and law enforcement, and global health and child survival. According to a tax calculator created by the nonprofit ONE.org, that family’s $100 could have been used to provide someone with 268 days of HIV treatments, 61 life-saving vaccines or 11 bed nets that save lives.

Tax season is understandably not everyone’s favorite time of year, but it is good to know not only where our dollars are being spent, but also the amount of good they can do. Even with only a small percentage of our taxes being spent on foreign aid, they are managed through effective programs that make real differences.

– Brittney Dimond

Sources: Gates Notes, One, OFM, National Priorities, OXFAMAmerica
Photo:  Flickr

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How Transparency Leads to Sustainable Development

How Transparency Leads to Sustainable Long-Term Development
Ever wondered where that money you donated went? The U.S. government, in partnership with USAID, has made a commitment to track international aid to more closely monitor sources of aid abroad and hold international leaders accountable for development. Up-to-date, truthful data about where international funds are going helps governments, civil service organizations and private sponsors track their money and increase the efficacy of donations.

The government recently signed on to the International Aid Transparency Initiative (IATI), an international organization that encourages NGOs, governments and international aid organizations to report data on foreign aid spending. This group estimates that $4.8 billion of EU-given aid, $2.8 billion U.S.-given aid and $13.8 billion in international donor aid was not visible. The initiative aims to have 80 percent of aid be visible; this amount, it estimates, will make the aid useful. This makes development easier to track and organizations more transparent in how they use their funds. It will encourage further donations and trust in the work of these organizations. Furthermore, IATI has developed a tool to compare spending by different aid groups and the amount of money going to different countries.

Anyone with Internet connection can now track the U.S. government’s aid efforts by country, sector and year on www.foreignassistance.gov.

Through this initiative, USAID has made a commitment to increasing its transparency in regards to foreign aid spending. Through developing a cost management plan, the organization upped its accountability and made it clear to donors where their money goes. As a result of this, USAID’s Aid Transparency Review jumped 20 points in the last year, from the “fair” category to the “good” one. The organization predicts improved donor understanding and confidence in its future projects and improvement in international development through its and other organizations’ efforts at increased accountability.

Progress does not end at transparency, however. USAID hopes to improve the knowledge base of its donors so that they can better understand the organization’s international efforts, understand where funds are going and hold governments, both those donating and accepting aid, accountable.

Through initiatives like these, international aid can become more sustainable, efficient and successful.

– Jenny Wheeler

Sources: USAID, Road To 2015
Photo: The Spectator

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The BRIC Countries Growing Contributions to International Aid

BRIC_countries
Times are changing in the realm of foreign aid. Recent economic downturns have caused the aid levels of traditional donors like the US, Japan and the European Union to stagnate. However, another group of countries is rising to take their places. While in the past, these countries have received large amounts of foreign aid, they have rapidly evolved into some of the biggest benefactors. These burgeoning non-traditional donors are the BRIC countries.

Devised in 2001 by Jim O’Neil of Goldman Sachs, the acronym, BRIC, indicates Brazil, Russia, India and China. Within their borders, they contain 40% of the global population, encompassing a quarter of the world’s land and constitute another quarter of the global GDP. Those are some significant fractions.

Though already substantial, the BRIC countries stand to grow into the largest economies of the 21st century. According to predictions, China will have the largest GDP in the world by 2050, nearly twice that of the US. While China’s BRIC cohorts, India, Brazil and Russia are expected to stand at third, fifth and sixth places respectively.

In coincidence with their economic expansions, the BRIC countries have also stepped up their contributions to foreign aid. Estimates place China at the head of the pack with foreign aid spending in the broad range of $4 billion to $25 billion annually. According the Council on Foreign Relations, “This higher estimate would make China the second-largest provider of aid after the United States.” The rest of the BRICs trail behind. Estimates suggest India donates up from $680 million to $2.2billion annually, followed by Brazil with $400 million to $1.2 billion and finally, Russia with $500 million a year.

Excluding China however, these levels still hardly match traditional donors such as Norway, Sweden, Australia, Japan, the UK, France, Germany and Italy. Russia’s aid spending equals approximately that of Greece, while India’s spending compares to that of Portugal.

So then, what exactly makes the BRIC foreign aid spending significant?

Though the BRICs do not spend nearly as much as traditional donors, they spend in more incisive and focused manners. According to the GHSi, “international organizations have started looking to the BRICS as potential donors and health innovators in their own right . . . These countries represent a potentially transformative source of new resources and innovation for global health and development.”

India in particular has focused on global health initiatives that have labeled it “The Developing World’s Pharmacy”. As a major manufacturer of pharmaceuticals, India makes 60% to 80% of vaccines used by the UN and 80% of all donor-funded HIV treatments to developing nations.

Growth in spending, rather than the sheer magnitude of spending, also distinctively marks BRICs from more traditional donors. According to Reuters, all BRIC countries have heavily accelerated foreign aid spending in recent years. China has quadrupled its foreign aid spending between the years 2004 and 2011. According to their estimates, Brazil’s aid spending has had an annual increase of 20% a year between the years of 2005 and 2011. In 2010, Russia’s aid spending had quadrupled since 2006.

This growth also comes at a time when some traditional donors’ spending has become stagnant. While India’s foreign aid spending has, according to Reuters, “grown . . . at a rate 10 times that of the US,” Italian foreign aid has “fallen 10 percent in [the same] period.” In 2014, other traditional donors like Canada, France and Portugal all significantly decreased foreign aid spending.

For the rapidly expanding BRIC countries, foreign aid serves as a way to galvanize their position amongst the more traditional global powers. While they still cannot quite match their more developed counterparts, their increasing foreign aid spending reflects their predicted ascension into economic prosperity.

– Andrew Logan

Sources: Asia Pathways, CFR Global Sherpa 1, Global Sherpa 2 IPS News, NCBI Reuters, The Guardian 1 The Guardian 2
Photo: Flickr