Written evidence submitted to the International Development Committee: Inquiry on the impact of coronavirus on developing countries

Submitted by Global Justice Now, 8 May 2020.

About Global Justice Now

Global Justice Now (formerly the World Development Movement) is a democratic social justice organisation working as part of a global movement to challenge the powerful and create a more just and equal world. We mobilise people in the UK for change, and act in solidarity with those fighting injustice, particularly in the global south. For 50 years, we have campaigned on international development policy, and more recently have tracked the financialisation of UK aid.

Summary

In the wake of the global COVID-19 pandemic, we are particularly concerned with the role of UK aid in three key areas: vaccine research and development; the impact of debt on the ability of governments to respond; and the Department for International Development’s (DfID) long term strategy for achieving Universal Health Coverage. In our previous submission of 17 April 2020 we covered the issues of vaccine development and debt. In this submission we will provide brief evidence on the longer term issues, implications and lessons to be learned from the pandemic, specifically in regard to UK aid support for public health in the global south.

The Covid-19 pandemic has highlighted the incredibly precarious position of many public health systems around the world. It is our view that UK aid spending on health should focus solely on supporting freely accessible public health systems and should not support private, for-profit healthcare. In order to respond to the pandemic and move towards achieving Universal Health Coverage (UHC),  the UK government should reassess its current strategy with regards to aid spending on healthcare (by DfID, CDC Group and the cross government funds) to ensure that UK aid is contributing to poverty reduction and working in the interests of global public health.

Recommendations for government

We are calling for:

• DfID, CDC and cross-government funds to stop promoting health privatisation and end all UK aid investments in private hospitals.
• DfID and CDC to ensure its active investments are supporting public health responses to Covid-19 by providing free treatment and care to all who need it.
• The UK government to support efforts by global south governments to utilize all private healthcare facilities to increase capacity to treat and care for infected patients.

The use of UK aid to privatise public services

1. Global Justice Now and other civil society organisations have previously raised significant concerns about the use of UK aid to invest in private, for-profit healthcare by DfID and CDC, despite the significant and growing evidence that these services can exacerbate inequalities.[i]
2. Similarly, the evidence on the unsuitability of using Public-Private Partnerships and private healthcare investments to achieve Universal Health Coverage is extensive and growing.[ii]
3. Nonetheless, CDC has expanded its healthcare portfolio in recent years with investments in private hospitals, pharmaceuticals companies and medical equipment manufacturers in Africa and Asia.[iii] CDC has invested $288.05 million directly in private healthcare since 2013 alone, and has made an undisclosed amount in intermediated investments.[iv]
4. CDC claims on its website that its Healthcare investments account for less than 1% of its entire portfolio, but the direct investments alone are worth approximately 5%.[v] 
5. Many of CDC’s private healthcare investments are in private hospital chains in India, including Narayana Health, CARE, Rainbow Healthcare, Manipal, Aster DM Healthcare, and Asian Institute of Medical Sciences.[vi]
6. CDC’s health investments in African include Penda Health, a network of clinics in Kenya, Healthcare Global Africa, and The Avenues Clinic in Harare, described as an “upmarket hospital” which “continues to attract the country’s political elite and foreigners”.[vii]
7. CDC is also invested in Nairobi Women’s Hospital. A 2014 study by Oxfam into private healthcare investments made by the International Finance Corporation in Africa found that “even the most basic maternity package [at Nairobi Women’s Hospital] would cost an average Kenyan woman three to six months’ wages, at $463”.[viii] In February 2020, significant concerns were raised that the hospital was deliberately overcharging patients to increase revenue after the leak of Whatsapp group messages.[ix]
8. A list of private hospitals that CDC is invested in was recently provided by James Duddridge MP in response to a written parliamentary question.[x]
9. CDC’s strategy of investing in private healthcare has been supplemented by DfID investments, as we have documented previously.[xi] For example, DfID has also supported health privatisation through its investments in the Harnessing Non-State Actors for Better Health for the Poor (HANSHEP) initiative. HANSHEP was designed to promote health markets, Public-Private Partnerships and the privatisation of public health systems in low-income countries.[xii]
10. The Cross-Government Prosperity Fund is also contributing to healthcare privatisation via the Global Better Health Programme which will invest £79m in the private sector to improve health systems in middle income countries.[xiii]
11. This programme is designed to develop healthcare systems where UK companies (including Healthcare UK – the export arm of the NHS) are best placed too sell their services and increase the market share of UK exports.[xiv] Whilst there is a development logic towards improving access to healthcare in middle-income countries as well as low-income countries, the programme partners were also selected on the basis that they “have the potential to benefit from UK expertise, and have indicated a strong willingness to collaborate with the UK…[and] also have growing health sector markets”.[xv] This raises the question of whether achieving UHC really is the main goal of the Better Health Programme or whether it is more focused at increasing UK health exports.

Lessons and implications of the pandemic for UK aid

1. In the wake of Covid-19, we are concerned that DfID and CDC’s long term strategy of investing in private healthcare to achieve UHC is highly flawed.
2. As Covid-19 continues to impact the global south on a greater scale, the weak position of many public health systems is becoming increasingly exposed. For example, while the UK has 28 doctors per 10,000 people, even relatively rich developing countries have a small fraction of that with 9 doctors per 10,000 people in South Africa, 8 in India. It has been reported that there is a severe lack of ventilators in the Central African Republic (which has only three machines for a population of 5 million people), while governments in Angola, Côte d’Ivoire, Mozambique and South Sudan have reportedly told the World Health Organisation that they have no ICU capacity for patients with severe symptoms.[xvi]
3. There have also been emerging reports of wide disparities between the abilities of public health systems in different countries to respond to the pandemic, and questions over the extent to which the burgeoning private sector is acting in the public interest.
4. In India for example, the state of Kerala has been praised for its effective testing and quarantine response to Covid-19. Kerala’s government has developed a strong and well-funded public health system in recent years.[xvii]
5. However, across the rest of India there are wide disparities in public healthcare funding between states and regions, with the result that many regions have a lack of ICU beds and ventilators to treat coronavirus patients.
6. There are also fears that the growing private health sector has undermined the public sector by taking up resources and workers. Nearly three quarters of private hospitals are located in less than 40 districts, and over four-fifths of hospitals have less than 30 beds.[xviii] In recent weeks, stories have already emerged of patients being charged eye-watering amounts for Covid-19 testing and treatments in India’s private hospitals.[xix]
7. At this stage, with many public health systems facing catastrophe and a dire shortage of resources, it is unclear how CDC’s investments are supporting the global fight against Covid-19.
8. For example, in India, there is a desperate shortage of ICU ventilators in the public sector. CDC is actually already invested in Skanray Technologies, a ventilator manufacturer in India. In response to a recent written parliamentary question, James Duddridge MP stated that “CDC continues to work closely with the company which is exploring options to scale-up its production capacity of ventilators in support of the public health response to Covid-19 in India”.[xx] It is imperative that CDC uses its leverage as an investor to encourage Skanray to provide equipment at an affordable price to the public sector, and to ensure that this investment is working in the best interests of public health without profiting from the crisis.
9. There is also a dire need to ensure affordable access to Covid-19 treatments and vaccines to limit the impact of the pandemic (and potentially second and third waves) as much as possible. CDC has also provided $200 million to the Credit Facility for Access to Medicines (known as MedAccess) with an option for this to rise to $500 million. MedAccess is essentially a bulk-buying scheme designed to negotiate affordable access to medicines for governments in the global south. In response to a recent written parliamentary question, James Duddridge MP stated that “MedAccess is in discussions with UN agencies and manufacturers to establish whether it can provide financial guarantees to increase production and enable more rapid procurement of much needed medical supplies at affordable prices to tackle the COVID-19 pandemic in low-and middle-income countries”.[xxi] With such a significant level of UK public finance invested in MedAccess, which is a fully owned subsidiary of CDC, we encourage the Committee to hold the government to account on these claims and ensure that this investment is contributing to equitable access to treatments for all.

Recommendations

1. In light of recent events, and for UK aid spending to be most effective in tackling poverty and reducing global inequalities, we urge DfID and CDC to end their practise of investing in private healthcare and to immediately switch to a policy of supporting only public health systems through budget support and other means.
2. In our view public health systems should be able to requisition resources and equipment from the private sector in the fight against coronavirus and CDC should encourage their investees to act in the public interest. Similarly, Oxfam have argued that governments in the global south “must find means to utilise all private healthcare facilities to increase capacity to treat and care for infected patients and to meet ongoing essential health needs”. [xxii] This could include supporting government efforts to requisition private sector resources where necessary.
3. We are concerned that an escalation in investment in private health facilities via CDC, and other development finance institutions (DFIs) signed up to the DFI Alliance, could do more harm to the most marginalised and vulnerable populations, and will further weaken public health systems.[xxiii]
4. We urge DFID to instruct CDC to enable private sector facilities they have invested in to align to the national effort providing free treatment and care, sacrificing profits in the process. If necessary, and where DfID is a direct shareholder, CDC could pass their stake in these hospitals to national governments with the requirement they be used for public use.

References