Director-General addresses reforms in WHO financing
Dr Margaret Chan
Director-General of the World Health Organization
Excellencies, ambassadors, distinguished members of the Programme, Budget and Administrative Committee, ladies and gentlemen,
A good morning to all. Let me thank you most sincerely for attending this extraordinary meeting.
Finding ways to improve the financing of WHO is important in its own right, but also because it underpins the success of the entire reform process. Getting the priorities and expected outputs right will not improve the performance of WHO in the absence of quality financing.
Quality financing aligns with the programme budget, comes from a broad base of contributors who share the resource burden, and is predictable, transparent, and flexible. We are far from this ideal.
Current financing practices make WHO a resource-based and not a results-based organization. Money dictates what gets done. It should be the other way around. Money should be allocated to support the work that Member States have prioritized. A good budget balances expected income and expenditure but is also driven by needs.
The figures tell the story very clearly, as set out in the Secretariat’s report. Only 25% of total financing comes from assessed contributions. Of the 75% of funds that come from voluntary sources, around 54% are contributed by Member States. The remaining 46% of voluntary contributions come from non-state actors.
We can take some pride in the fact that voluntary contributions have increased steadily and substantially. In a sense, this expresses confidence that support for the work of WHO is a good investment.
But it shapes the agenda beyond the control of Member States, lets resources drive priorities, and greatly diminishes Member-State oversight of resources and expenditures. In my view, addressing these problems and finding solutions is a central part of the reform process.
We know the problems. Most voluntary funding is for short-term projects. The management of a large amount of earmarked and specified voluntary income increases overhead costs, also called transaction costs, and reduces efficiency. Programmes and offices compete for funds and become territorial in protecting their interests, which works against policy coherence.
You have been asked to consider several proposals. One is to have the Health Assembly approve the entire budget. That is, a budget based on all sources of funds and not just the proportion of the budget financed from assessed contributions. Doing so would be a major departure from past practices and would return the responsibility for oversight to Member States.
Following current practices, when Member States approve the programme budget, they exercise oversight and responsibility for only 25% of what WHO will be spending. Likewise, I can be held accountable for results achieved from only a quarter of the money made available to WHO.
Another proposal is for a financing dialogue as a way to improve the predictability of funding for this organization. This proposal is intended to give everyone a clearer picture of funding requirements and funding gaps and open opportunities for a shifting of funds from over-resourced to under-resourced areas, when considered desirable.
You also have a proposal on assessed contributions. In the current era of austerity, the ideal of having WHO financed entirely or even largely from assessed contributions is simply not realistic.
We have downsized, and I see some further opportunities for efficiency savings using the entire assets of the Organization, the six regional offices, country offices and headquarters, to serve you better. You have before you some specific proposals to strengthen the coordination of resource mobilization, to improve resource management, and to introduce a stronger internal framework for financial control.
A final proposal is for intensified efforts to find new sources of funding. You have reservations about accepting funds from the private sector and stress the need for clear rules of engagement and firewalls to protect against conflicts of interest.
We all want WHO to have a stable budget in the short-to-medium term. But WHO can perform well only when it maintains its independence and integrity.
Needless to say, the work before you is of critical importance for the immediate future of WHO as well as for the overall success of the reform process. I look forward to receiving your views, guidance, and advice on the way forward.