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Philippe Douste-Blazy. Millennium Development Miles

September 1, 2010

PARIS—The global economic crisis has claimed many victims – unemployed workers, underwater homeowners, and bankrupt pensioners – but nowhere have the repercussions been as devastating as in the developing world. The setback to the fragile gains of recent years, particularly in Africa, threatens to return millions of people to the extreme poverty from which they had just managed to escape. In addition to the prospect of enormous human suffering, severe economic, political, and social pressures now threaten to overwhelm and destabilize developing countries, triggering conflict on an unprecedented scale.

What makes today’s downward spiral particularly disheartening is that the economic crisis has hit at a time of the first glimmerings of progress, notably in health care. Since 2000, the rate of people dying from AIDS has declined, child-killing diseases like malaria and measles are being tackled more effectively, universal primary education is inching forward, and the targets for safe drinking water are in sight.

Now, though, the global economic crisis is sapping developed countries’ shaky efforts to fulfill their commitments for official development assistance (ODA) in order to achieve the United Nations’ Millennium Development Goals (MDGs). A UN report warns that annual investment from these donor countries is falling billion short of the 0 billion goal. Unless something changes, there is little chance that the MDG targets can be sustained in the long run.

Indeed, the consequences of the fall-off in ODA are already dramatic; the number of people going hungry and in extreme poverty is now far greater than before, and the same is true of the unemployed, those who work in vulnerable jobs, or earn less than .25 a day. Progress in health and literacy is being undermined. World Bank data link the economic downturn to an increase, by 200,000, in mortality among children under the age of five.

Moreover, 536,000 women a year die in childbirth, and maternal health is also the one MDG progress towards which has stagnated since the targets were established 10 years ago. Every minute that passes means one less mother, and it is shameful that 99% of these deaths occur in developing countries.

So should we despair of achieving the MDGs, not just by the original deadline of 2015 but even by the end of the century? Viewed through the traditional ODA prism, with its one-year budgets, public-finance constraints, and competing national priorities, there seems little cause for optimism. But there is a way to replace the traditional paradigm with an internationally accepted model that has a proven record of success, particularly in health care.

Innovative financing mechanisms offer the means to tap incrementally into global financial flows without disrupting economic activity. Among the best-known examples is UNITAID, a UN-sponsored international drug-purchase facility funded largely through a small fee added to airline tickets, which has raised .5 billion since 2007. This reliable funding source has spearheaded the fight on the three health-related MDGs: treating and fighting life-threatening diseases like HIV/AIDS, malaria, and tuberculosis; reducing childhood mortality; and improving maternal health.

Providing funding in 93 countries, UNITAID today finances drugs for three-quarters of the children around the world who receive anti-retrovirals. Widespread coverage has been achieved through UNITAID’s influence on the price of life-saving drugs: it guarantees a market through long-term commitments to purchase high volumes of medicines and diagnostics – a commitment made possible by the sustainable and predictable funding of the “air tax.” As a result, the price of anti-retrovirals has been cut by more than 50%.

Similarly, UNITAID is attacking child mortality through UNICEF’s extensive program to eradicate mother-to-child HIV transmission. By the end of 2010, four million African women will be screened, and tri-therapies treatment provided to 500,000 pregnant women worldwide.

UNITAID is now building on this success by teaming up with the Millennium Foundation to give individuals a chance to help fight major diseases through micro-contributions. An innovative fundraising mechanism called Voluntary Solidarity Contribution will allow air travelers and others to make a voluntary micro-donation to UNITAID simply by checking a box when buying, say, a plane ticket, and adding to the total cost.

The “air tax” currently applies to only 7-10% of all airline tickets sold, yet the 0 million it brings in yearly accounts for three-quarters of UNITAID’s financing. With more than a billion people now traveling by air every year, and with a total of 2.2 billion flights sold, extending the “air tax” approach to a voluntary contributions model would vastly multiply the program’s benefits.

Such new financing mechanisms, in addition to national ODA investments, are an important means of supporting the beleaguered MDGs. In September, when UN Secretary-General Ban Ki-moon convenes a summit in New York to renew the drive toward reaching the MDGs, the world leaders in attendance should endorse their use to address MDG priorities in areas other than health.

When the MDGs were adopted in 2000, the sense of urgency was powered by the moral conviction that extreme poverty had become an unacceptable anachronism in our globally connected world. But more is needed, and September’s summit in New York will be an important opportunity for countries to voice their full-throated support for innovative financing mechanisms, and thus give the MDGs a fighting chance.

Philippe Douste-Blazy, a former French foreign minister, is the UN Under Secretary-General in charge of Innovative Financing for Development.

Copyright: Project Syndicate/Europe’s World, 2010