Financial crisis and global health

Dr Margaret Chan
Director-General of the World Health Organization

Remarks at the high-level consultation on the financial crisis and global health

Honourable ministers, distinguished experts, ladies and gentlemen,

Let me extend my warmest welcome to all of you, and my special thanks to panel members for agreeing to join us on such short notice.

The topic is acutely relevant. Time is short. I will be brief.

I have convened this consultation for several reasons. First and foremost, countries at all levels of economic development are concerned about the impact of the financial crisis on health.

Officials are worried that health in their own countries may worsen as unemployment rises, safety nets for social protection fail, savings and pension funds erode, and spending on health drops. They are concerned about mental illness and anxiety, and a possible jump in the use of tobacco, alcohol, and other harmful substances. This has happened in the past.

Officials are also worried that present levels of financing for international health development may not be maintained. These issues are extremely important for initiatives such as GAVI and the Global Fund.

In a time of austerity, how do we set priorities? How do we decide what to continue, and what to cut?

Such concerns are fully justified. The situation is alarming and highly volatile, as it has some unprecedented dimensions.

Financial markets, economies and businesses are more closely interconnected than ever before. As we have seen, financial turmoil is contagious, moving very rapidly from one country to another and spreading very quickly from one economic sector to many others.

The crisis comes at a fragile time for public health. We are in the midst of the most ambitious drive in history to tackle the root causes of poverty and reduce the gaps in health outcomes. No one wants this momentum to stall.

In times of economic crisis, people tend to forego private care and make more use of publicly financed services. This trend will come at a time when the public health system in many countries is already vastly overstretched and underfunded.

In many low-income countries, more than 60% of domestically-sourced health spending is private, largely in the form of direct out-of-pocket payment. Economic downturn increases the risk that people will neglect health care, with prevention falling by the wayside. Less preventive care is particularly disturbing at a time when demographic ageing and a rise in chronic diseases are global trends.

We know, too, that women and young children are among the first to be affected by a deterioration in financial circumstances and food availability. Moreover, recent trends in international trade have left many countries with little self-sufficiency in the production of staple food items, a cornerstone of food security.

Ladies and gentlemen,

I have convened this consultation for three further reasons.

First, we must seize every opportunity to protect populations and pre-empt adverse effects on health. Together, we need to use past experiences to get as good a grip as possible on what might happen, what are the warning signals, when to intervene, and what to do.

Second, ministries of health and foreign affairs need a set of compelling arguments for persuading other ministries to protect funding for health, nationally and internationally. In the past, we have seen the social sectors robbed in times of economic downturn, with dire long-term consequences.

Finally, we need to be very smart and cost conscious in the early warning systems and protective measures we recommend. I want to assure you that WHO is looking at the use of existing systems and instruments.

I am personally looking at the overall efficiency of WHO operations. And I want to assure you that I am prepared to exercise strict financial discipline in my capacity as chief technical and administrative officer of this Organization.

Thank you.