The bank that cares?

Chances are that most people working in health will be able to tell you something about the World Health Organization. But the World Bank? What does a bank have to do with health care? Rebecca Hope explains why it should concern doctors and medical students

The World Bank is the new 800 lb [400 kg] gorilla in world health care," said one senior World Health Organization representative.¹ But were they right? Let's look at the numbers. Consider that the annual regular budget of the WHO, at about $900m (£500m; €700m), is approximately equal to that of a large European teaching hospital.² The World Bank has approximately $20bn a year to play with. Fifteen per cent of these funds went into its health, nutrition, and population sector in 2004,³ making it the single largest source of funding for health care for low and middle income countries.

Your local bank

The World Bank is in the business of making loans, much like your local bank, except this bank lends to countries. Middle income countries are eligible for loans; the poorest countries can apply for interest-free loans and grants.

Unlike other international institutions, the bank can raise revenue by borrowing on international markets, as well as collecting from its 184 member states or "shareholders." Decisions are made according to the principle of "one dollar, one vote." This means that its five richest shareholders - the United States, Japan, Germany, the United Kingdom, and France - control the greatest share of the vote.³ The president of the bank is traditionally a US citizen: James Wolfensohn, an American, has held the post since 1995 and is to be succeeded by another American, Paul Wolfowitz, this year (see p 178).

There are 24 executive directors of the bank, who decide on loans and grants and the bank's policies on lending. Five of these directors are representatives of the five main shareholders; the rest are elected by the other 179 ­member countries.³

Building up infrastructure

The World Bank emerged in the aftermath of the second world war in 1945, and aims to "fight poverty and improve living standards for people in the developing world."³ Its original mandate was to restore inter­national trade in Europe and Japan and rebuild infrastructure damaged by war. The International Monetary Fund (IMF) was set up at the same time to facilitate global economic transactions and exchange arrangements.

The first loans made by the bank were mainly aimed at rebuilding physical infrastructure, such as roads, communications, and power. During the 1970s and ‘80s, the bank became increasingly involved in health, and established its health, nutrition, and population sector. It began working with WHO on the onchocerciasis programme, with the World Food Programme to tackle malnutrition and with Unicef on safe motherhood.

The World Bank's involvement in health came about partly because of a shift in ideas about how to reduce poverty. During the 1960s, the prevailing theory was that investing in economic growth and encouraging the private sector would lead to development.⁴ The wealth generated would trickle down to the poorest members of society. It became clear that a "basic needs approach," which focuses on health, education, and human development, was necessary to share the benefits of growth with the poor.⁴

In recent years, the bank has sought a more compassionate public image, as a knowledge bank, and increased funding for health. More funds are now channelled through international partnerships such as the Global Fund to fight AIDS, tuberculosis, and malaria; Roll Back Malaria; the Water and Sanitation Programme; the Special Programme for Research and Training in Tropical Diseases; and WHO's Reproductive Health and Research Programme. It is one of the largest global funders of HIV/AIDS research, through partnership with UNAIDS.⁵ In addition, the bank has supported hundreds of government health projects. Despite this apparently caring approach, its policies are unpopular in many developing countries and have been criticised by other agencies.

Structural adjustment programmes

The bank, by the sheer wealth of funds available, has the power to influence government policy of the countries it lends to. In response to the debt crisis of the 1980s and ‘90s, when heavily indebted countries threatened to default on unmanageable loan payments, the World Bank and the IMF stepped in, offering more loans. However, the money was tied to a package of conditions, known as structural adjustment programmes (SAPs).

SAPs prescribed changes in countries' national policies aimed at stabilising the economy. Heavily indebted countries - such as Ghana, Pakistan, and the Democratic Republic of Congo - had to cut public spending, open their markets to foreign imports, and remove subsidies on goods and services. This impacted hard on the health of the poor. Suddenly health services were no longer free and removal of food and fuel subsidies increased the cost of living. Unicef drew international attention to the adverse effects of SAPs in 1987.⁶ World Bank and IMF policies, it said, were responsible for a 25% decrease in health spending and increased child mortality in the world's poorest countries.

The bank, under increasing criticism, agreed that structural adjustment had brought about unnecessary hardship. However, in 2004, there was a further increase in loans with strings attached, including the debt relief programme, Highly Indebted Poor Countries' Initiative (HIPC).³

Economics above all

The World Bank's priorities, it admits, are to stimulate economic growth and the growth of the private sector.⁷Economic considerations come first in decisions on loans and the richest nations can veto its decisions.

The most generous grants often do not go to the poorest countries, but to projects that are most likely to generate measurable success. For example, in 2004, about $6.5bn was loaned to Argentina, Turkey, Brazil, and China. Contrast this with the $4bn made available for the whole of Africa.³ Haste to make loans and meet targets has led to loans to dictatorships and military regimes, and deleterious environmental effects of its projects.⁴ Health analysts say the bank is caught between the pursuit of neoliberalism - opening markets to foreign business with minimal government involvement - and its more altruistic aims.⁸

Is the bank's approach working? Its statistics show a widening gap between the richest and the poorest countries. Since 1960 the income of the richest 20 countries has risen from 15 times that of the poorest to 30 times. In sub-Saharan Africa, people in absolute poverty (defined as $1 a day) increased in number from 388 million to 484 million from 1990 to 1999.⁹ WHO and United Nations Development Programme analysts argue that global trade regulations and the burden of debt prevent developing countries from competing on open markets and investing in health.¹⁰ As Jeffrey Sachs, special advisor on health to the UN secretary general said, "Poor countries cannot afford to wait until they are wealthy before they invest in their people."

The World Bank's aim of alleviating poverty is admirable, but it is not an easy task. It is impossible to separate the World Bank's work in health from prevailing theories of economic development, issues of trade justice, and third world debt. As an international institution, it wields more influence over international health policies at a country level than any other specialist agency, including WHO. How it uses this influence in coming years depends much on the commitment of the world's richest nations to the wellbeing and development of the world's poorest.

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7. World Bank. The World Bank annual report 1998. Washington DC: World Bank, 1998.
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9. World Bank. Global economic prospects and the developing countries 2002: making trade work for the world's poor. Washington DC: World Bank, 2002.
10. Bettcher DW, Yach D, Guindon GE. Global trade and health: key linkages and future challenges. Bull WHO 2000;78:521-35.