Let’s face it: development assistance has — perhaps unfairly — not been a top investment choice for European economies in recent years, especially those most affected by the economic crisis.
Take the striking example of Spain: Deprived of a government for nearly a year and burdened by the heavy toll of the economic crisis, including staggering youth unemployment rates and debt levels putting it at risk of having to pay a European Union-imposed excessive deficit fine, it may come as no surprise that Spain’s official development assistance has stagnated at historically low levels of 0.13 percent of gross national income — its lowest since the 1980s — for a good few years now, despite signs of economic recovery between 2014 and 2015.
ODA in Europe
Some EU member states adopted a very different approach during the crisis: Despite a drastic cut in 2012, for example, Italy’s ODA levels have gradually increased again, in line with economic recovery, and are now surpassing pre-crisis levels. And in the United Kingdom, business leaders made a strong case back in 2013, through an open letter to the Prime Minister, for continuing “well-targeted” ODA-spending as a “smart investment” into new consumer markets — prompting the U.K. government to enshrine the longstanding 0.7 percent of GNI target into national law.
With Spain’s government finally approved in a parliamentary vote and expected to resume normal service at the end of 2016, together with an economy on the road to recovery — showing 2.49 percent growth since 2014 — it’s time to talk about smart, well-targeted investments again.
Let´s start by pitching the health investment idea.
“Why should we invest in your idea?” This is the first question raised in nearly every episode of the BBC’s “Dragon’s Den” television series, where would-be entrepreneurs are invited to pitch their new business ideas to a panel of millionaire investors. Although one may not be able to — nor wish to — apply Dragon’s Den principles lock, stock and barrel to the “aid business,” it’s hard to deny donors the right to invest in development initiatives that provide them with the best “value for money,” especially since they are using scarce taxpayers’ resources to do so.
Social sectors, albeit appearing highly investable — in that they are setting the base for social and economic development through ensuring a healthy and educated workforce — must not be an exception in this respect. Especially, since donors already have a number of “tools” at their disposal, designed to help them find the most efficient ways of eradicating preventable and poverty-related diseases, as well as health access problems, in the medium-term.
This has been particularly true for the case of malaria, which is already a global health success story. Since 2000, there has been a 60 percent reduction in deaths associated with malaria and the Millennium Development Goal of halting and reversing the spread of the disease by 2015 has been achieved. However, further investments are needed in order to “scale-up to zero” in the long-run: Experts estimate that international and domestic funding for malaria programs must triple to $8.7 billion if we are to meet the new global target of a 90 percent reduction in malaria incidence and mortality by 2030.
Such investment is all the more worthy when considering that the disease is entirely preventable and treatable. To that end, however, constant innovation and global-level investments are required to prevent parasitic resistance in the decades to come. To ensure that this global responsibility is not solely shouldered by the public sector, innovative approaches are needed, involving significant contributions from the private and philanthropic sector.
During the last decade, most donor investments in fighting the disease were channeled through The Global Fund to Fight AIDS, Tuberculosis and Malaria, due the organization’s specific mandate to eradicate malaria in the medium term. Indeed, it provides 50 percent of all international financing for malaria, and has invested more than $8.3 billion in malaria control programs in more than 100 countries since its inception.
In light of the recent fifth Global Fund Replenishment round, which took place in Montreal, Canada, in September, let’s take the example of malaria and look at some of the “secret recipes” behind the achievements in efficiently tackling the disease. Below, we identify five essential ingredients for the perfect “business plan” to invest in health in development:
1. Identify an innovative concept.
Case study: Malaria in Mozambique
In Mozambique, for example, and in partnership with the Manhiça Health Research Center, ISGlobal supports the National Malaria Control Program in its efforts to eliminate malaria in the south of the country by 2020 through knowledge generation, development of surveillance systems, training, advocacy and coordination mechanisms. These actions are spearheaded by the Mozambican Alliance for Malaria Elimination led by the Mozambican Ministry of Health. In the long-term, the adopted strategy seeks to expand malaria elimination efforts to the rest of the country, through the development of a national elimination strategy.
Constant innovation is crucial to fight a continuously mutating disease such as malaria.
By using innovative public-private partnerships and smarter procurement systems, the Global Fund has managed to increase efficiency and reduce the costs associated with fighting the disease. Its pooled procurement approach has achieved substantial cost savings, enabling partners to purchase more mosquito nets. Nets now cost as little as $3, a 30 percent reduction from 2013 prices. In addition, it recently set up wambo.org, an e-marketplace helping implementers save money and time in the procurement of health products, including antimalarial medicines and bednets. Launched in January 2016, it is projected to save implementers of Global Fund-supported programs an additional $250 million over the next four years.
Innovative public-private R&D initiatives have had a proven high return record on donor investments: ISGlobal’s Malaria Elimination Initiative, for example, has become a “linchpin” for efforts focused on the elimination of this parasitic disease. At the heart of the initiative’s work model, also supported by a major private trustee, the “la Caixa” Foundation, is a four-pronged approach: the generation, management, transmission and application of knowledge. By efficiently linking basic, clinical and applied research to the development of new public health tools and policies, and testing the latter in malaria-endemic countries, ISGlobal is creating “virtuous circles” for advancing public health in a comprehensive manner, putting health systems strengthening in partner countries front and center.
2. Develop sound financial requirements and forecasts.
“You need to know your business and get your figures right” — another phrase heard all too often in the Dragon’s Den. The Global Fund has long embraced this concept: During its recent replenishment exercise, the fund was able to raise $12.9 billion from both public and private donors, falling just $100 million short of its fundraising target. One of the reasons behind this success was the fund’s ability to demonstrate that this figure was based on thorough financial analysis, showing that this level of investment — combined with significant increases in domestic financing by affected countries themselves, as well as other external funding remaining steady — would represent 80 percent of the total need projected by partners.
3. Be prepared to show return on investment.
“What is your bottom line and how do you value your business?” — another classic Dragon’s Den question. In the nonprofit world of development cooperation, the expected “bottom line” or return on investment should, naturally, be measured in terms of results and impact on the beneficiary population.
On the basis of past achievements and an innovative methodology of calculating the “number of lives saved” through its interventions, the Global Fund was able to demonstrate that every $100 million contribution would help — in tandem with partner countries’ own financing efforts — save up to 60,000 lives; avert up to 2.3 million new infections; incentivize domestic investment of $300 million by beneficiary country; and spur $2.2 billion in long-term economic gains.
The Global Fund Strategy 2012-2016 set a target of saving 10 million lives in the five-year period ending Dec. 31, 2016. Current projections are on track to achieve that milestone. In fact, in mid-2016 the Global Fund was able to announce that 20 million lives were saved through the partnership since its creation in 2002.
It is also possible to estimate results by specific donor contribution. For example, between 2003 and 2010, according to ISGlobal estimates, 30 percent of Spain’s overall contribution of 630 million euros to the fund are allocated to malaria prevention and treatment programs, which contributed to save the lives of more than 100,000 people.
4. Show you are able to manage risk.
“No risk, no fun,” says the millionaire Dragon’s Den investor — but there’s no fun at all if risk is badly managed. Being transparent about potential risks and how they will be dealt with is therefore an essential part of any serious business plan. This includes, for example, operating with a high degree of transparency and accountability, tracing the dollars spent and the impact each dollar brings. By publishing all relevant documentation on its website, including information about some of the challenges encountered in countries through audits and investigations, the Global Fund is among the few organizations to have fully embraced and internalized the concept of risk management, transparency and accountability.
5. Learn to “franchise” successful models.
A typical final question faced in the Den: “What are your plans for scaling up the business?”
In the field of development cooperation, this arguably best translates as “replicating successfully piloted development initiatives,” expanding their scope either geographically or thematically. One step further would be building domestic capacity for sustainable financing in the long run. There is certainly a momentum for drawing lessons learned from the successful fight against malaria, as well as diseases such as AIDS and TB, in order to apply them in a broader health systems strengthening context.
Global Fund investments in the prevention and treatment of AIDS, TB and malaria do not just improve the response to those diseases — they also improve country health systems, boosting the quality of care, including maternal and child health care; improving procurement and supply chain systems to successfully deliver medicines to the last mile; improving tracking systems to boost services and training health personnel and community health workers to take prevention, diagnosis and care until the most remote patient.
By requiring counterpart financing, the Global Fund has catalyzed an additional $5.9 billion in domestic funding from government resources for 2014-2016, maximizing the potential for long-term sustainability and scaling up of programs.
A truly integrated approach to global health, by bringing together health workers, the private sector, decision-makers and academia in order to link innovation, research, knowledge transfer and application, remains essential.
So, our call to action is clear: With a solid business plan at hand, there is nothing that should keep countries such as Spain from becoming the next “dragon” investor in global health. By combining investment on malaria elimination through the Global Fund and leveraging knowledge management and innovation capacity of some of its leading research institutes, such as ISGlobal, Spain could make the most of a contribution to global efforts to eliminate infectious diseases.
Needless to say that the real value of such investment goes far beyond any monetary gain — it is an investment in Spain’s international recognition as a global player for development and global health.
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