Macroeconomics and Health (CMH)

Key facts and findings on the linkages of health and development

A few health conditions are responsible for a high proportion of health deficit:

  • Millions of impoverished people die every year of conditions that are readily prevented or treated. In 1998, there were 16 million deaths caused by communicable diseases – mainly HIV/AIDS, TB and malaria – maternal and perinatal conditions, childhood infections, tobacco-related illnesses and nutritional deficiencies.
  • Disease can destabilize economies and entire political systems. The stability of the global system hinges on an international effort to fight disease and on the health of the poorest, most vulnerable people.
  • The HIV/AIDS pandemic is a distinct and unparalleled catastrophe in its human dimension and its implications for economic development. In 2002, there were 42 million people living with HIV/AIDS; nearly three quarters of the people living with HIV/AIDS are in sub-Saharan Africa.
  • Disease can cross borders as easily as capital flows. For example, no country has escaped the HIV/AIDS pandemic. HIV has spread in rich and poor countries and, within countries, among both rich and poor within a single generation.
  • Similarly, the developed world is increasingly detecting drug-resistant tuberculosis, once considered a problem exclusive to poor countries.
  • The tragic deaths – and the enormous economic and social costs associated with them– reflect the basic fact that essential life-saving health services are out of reach of hundreds of millions of the world’s poor.
  • Between 1960 and 1994 a high infant mortality rate was one of the main predictors of State failure through coups, civil war, and other unconstitutional changes in regime.
  • Almost 11 million children under age five, died in 2000 from preventable and treatable illness, mostly in developing countries. Of these, 8 million were infants, half of whom were newborns in their first month of life.
  • Most deaths are caused by a small number of infectious diseases. Malnutrition contributes to 60% of these deaths.
  • Reducing infant mortality results in lower birth rates and higher economic growth.
  • Societies with high rates of child and infant mortality tend to have high rates of fertility, in part to compensate for frequent deaths of children. Large numbers of children, in turn, reduce the ability of poor families to adequately invest in health, education and the future of each child.

Most deaths and disability can be prevented, saving 8 million lives per year by 2010

  • Technologies exist to avert millions of deaths from HIV/AIDS, tuberculosis, malaria, diarrhoeal diseases, respiratory infections and other killers. Without extending these life-saving interventions, poverty is likely to be exacerbated and to be passed to the next generation.
  • By taking essential interventions to scale worldwide, 8 million lives could be saved each year by 2010.
  • Disease control in one part of society can “spill over” and directly benefit another. For example, insecticide-treated mosquito nets reduce malaria infection for an entire village, not just for the individuals who use them.
  • Investments in reproductive health, including family planning and access to contraceptives are crucial accompaniments of investments in disease control.

Increased health investment could generate at least US $360 billion annually for the period 2010-2020

  • Evidence presented by the Commission suggests that each 10% improved life expectancy is associated with an increase of economic growth of about 0.3% to 0.4% per year other factors being equal.
  • Increased health investment of $66 billion per year above current spending will generate at least $360 billion annually. About half of this will be as a result of direct economic benefits: the world's poorest people will live longer, have many more days of good health and, as a result, will be able to earn more. The other half will be as a consequence of the indirect economic benefits from this greater individual productivity.
  • To address the health challenges in the low-income countries, minimum financing needs should be US$ 30-40 per person per year to cover essential interventions, including those needed to fight the AIDS pandemic. Current actual spending on health in the least-developed countries is around US$ 13 per person per year.
  • The level of health spending in low-income countries is insufficient to address the health challenges they face. Low-income countries could increase the domestic resources they mobilize for health and allocate what they have more efficiently.
  • Even with greater resource mobilization, more funding is required to cover essential health services in low-income, as well as some middle-income countries with a high prevalence of HIV/AIDS.
  • Donor financing is required to close the financing gap in conjunction with best efforts by the recipient countries themselves. This will require approximately an additional US$ 27 billion per year in donor grants by 2007, compared with the current level of US$ 6 billion.
  • The highest priority is to invest in specific health sector interventions and properly structured health delivery systems that reach the poor.
  • To achieve an impact on the health of the poor will require increased investment in global public goods, including increased collection and analysis of epidemiological data, surveillance of infectious diseases, and research and development into diseases that are concentrated in poor countries.
  • Two-thirds of developing countries either import 100% of the medicines they consume or have very limited production capacity. There is still much to be done to increase poor people’s access to life-saving medicines.
  • Differential pricing is the best solution to ensure access to essential medicines in low-income markets. Under differential pricing, rich countries bear the costs of R&D, while poor countries would pay only the “marginal” costs of production.