Debt Relief and The HIV/AIDS Crisis in Africa: Does The Heavily Indebted Poor Countries (HIPC) Initiative Go Far Enough?
Debt Relief and The HIV/AIDS Crisis in Africa: Does The Heavily Indebted Poor Countries (HIPC) Initiative Go Far Enough?
Debt Relief and The HIV/AIDS Crisis in Africa: Does The Heavily Indebted Poor Countries (HIPC) Initiative Go Far Enough?
Zambia and Malawi have among the highest HIV/AIDS prevalence rates
in the world. But while Zambia has almost one million people affected,
the country is spending 30 per cent more on debt than on health.
Malawis health budget is equivalent to its debt servicing. Child mortality
is increasing in both countries.
In Cameroon HIV prevalence rates have passed five per cent. Debt
repayments amount to three-and-a-half times spending on health.
Conclusion
It goes without saying that increased and more effective debt relief is
just one part of a wider strategy for resource mobilisation. It is not a
substitute for more decisive action by the international community.
The new Global Fund to Fight AIDS, Tuberculosis and Malaria must
be properly resourced and managed to support the development of
health systems capable of responding to the crisis. Building capacity
for appropriate service provision is as important as transferring
money.
At the same time, more has to be done to bring down the prices of
anti-retroviral drugs, along with drugs for treating secondary
infections and poverty-related diseases such as respiratory tract
infection. An imminent danger in this context is the implementation
of the WTO intellectual property agreement (TRIPS). When applied
to developing countries, the more stringent patent protection it
provides for will artificially raise prices for vital medicines, bringing
new pressures to bear on public health and household budgets. There
is little merit in generating new resources through debt relief with
one hand, and then absorbing these resources by inflating drugs
Notes
1
As of late March 2002
2
Estimates from various research exercises suggest that a one per cent
increase in per capita income growth is typically associated with a decline in
income poverty of 0.3 per cent to 0.9 per cent, depending on the distribution
of income. The figure in the text is derived by using these parameters and
the 1998 poverty headcount figure for Africa of 291 million.
3
This is supposed to set out a broad strategy for achieving agreed poverty-
reduction goals, including financing provisions.
4
For very open economies, the ratio of debt to government revenues can
also be taken into account, but the eligibility criteria for this window make it
the exception to the rule.
0
5
10
15
20
25
Zambia
Malawi
Mozambique
Rwanda
Ethiopia
Uganda
Tanzania
Cameroon
Burkina Faso
Ghana
Guyana
Sierra Leone
Chad
Benin
Guinea-Bissau
Mali
25
Honduras
Senegal
Guinea
Niger
Mauritania
Madagascar
Figure 1: Percentage of population with HIV/AIDS: selected Heavily Indebted Countries (2001/02)
Nicaragua
Bolivia
Debt service as a percentage of government revenue
26
0
5
10
15
20
25
30
35
Nicaragua
Guyana
Guinea
Zambia
The Gambia
Sierra Leone
Honduras
Mali
Niger
Chad
Guinea-Bissau
Malawi
1
Mauritania
Bolivia
Senegal
Tanzania
Ghana
Uganda
Madagascar
Countries (HIPCs): 2001 (actual) and 2003/05 (projected average)
Mozambique
Figure 2: Debt service as a percentage of government revenue in 26 Heavily Indebted Poor
Benin
Ethiopia
Burkina Faso
Rwanda
2003-05 (projected average)
Debt service as a multiple of public-health spending
0
0.5
1
1.5
2
2.5
3
3.5
4
Cameroon
Sierra Leone
Mauritania
Guyana
Mali
Madagascar
The Gambia
Zambia
Nicaragua
Guinea
Niger
Honduras
Benin
27
Malawi
Senegal
Poor Countries (2001/02)
Bolivia
Tanzania
Guinea-Bissau
Ghana
Chad
Mozambique
Ethiopia
Burkina Faso
Rwanda
Figure 3: Debt service as a multiple of public-health spending: 26 Heavily Indebted
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