Member states could consider paying more to support WHO, some remain unwilling
Newsletter Edition #114 [The Friday Deep Dives]
Earlier this month, WHO member states made a decisive move to launch negotiations for new rules to govern health emergencies. Now, they are considering another key decision – whether to pay more to lend support to the organization seen by many countries as the sole leading authority in coordinating not only the response to health emergencies but also its unique role in setting standards in public health.
This week we bring you a detailed look at the report of the Working Group on Sustainable Financing that will be discussed next week by countries at the WHO. This meeting is a key starting point that could potentially decide on the extent to which WHO may receive support from those who own the organization.
For this story we spoke with diplomats who worked on this, and with WHO financing experts who very graciously walked us through the labyrinthine maze of donor funding and related politics.
In all these months of reporting on WHO finances in the context of this working group, I have often felt that the notion of a strong WHO is not some distant, dry and technical, amorphous discussion – it has painful implications for all of us. Consider the real consequences we have been facing for the last two years, if not more. This support from WHO member states will not solve everything, but it will help WHO leverage the power of its member states better.
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1. Member states could consider paying more to support WHO, some remain unwilling
Update on the decisive moment for the Sustainable Financing Working Group
In a rare but crucial opportunity, WHO member states are now poised to seize the moment and finally decide to pay more to support the organization which they see as a leading authority to protect and shape health outcomes for people globally. Or, nationalistic considerations may win and they may let this moment pass, sealing the fate of WHO. This would further marginalize and weaken WHO’s role in global health governance precisely when a health crisis has struck a blow at the heart of how the world functions.
WHO’s Sustainable Financing Working Group will meet next week to discuss recommendations on the way forward to strengthen the organization’s finances. Member states will consult and negotiate on a report that will be submitted to the Executive Board in January 2022.
Early indications suggest that while much of the developing world has expressed support for a gradual and sustained increase in assessed contributions, some of the bigger member states are cautious about the increase in membership fees, given the implication on their contributions in absolute terms, sources familiar with the discussions, told Geneva Health Files.
So, while there seems to be significant support for an increase in assessed contributions to make WHO financing more predictable and independent of influences, it will remain to be seen, whether in the coming weeks, countries will agree to commit to an increase. Sources said that a consensus on the decision will be needed involving all 194 member states. And this, therefore, leads to uncertainty if even a small group of countries decide not to support an increase in assessed contributions.
In its report, the working group has settled on meeting 50% of the base programme through assessed contributions and the remaining, potentially through a replenishment approach.
Sources indicate that a small group of traditional top donors will pay for the bulk of the increase, but that should not stop others from paying what is due to them as per the UN scale of assessments. By one rough estimate for every two dollars paid by the top four donors, the remaining 190 member states will have to pay a corresponding dollar together.
As per current proposals, an increase of roughly $1.2 billion per biennium to be reached over a period of six years has been suggested. (This assumes the approved scale of assessment for 2022–2023.) If approved by the World Health Assembly in May 2022, such an increase would kick-in starting 2024. This leaves all governments adequate time to prepare for this increase, taking the current fiscal constraints into account, officials familiar with the discussions said.
Source: Report - modelling of phased assessed contributions increase between 2023 and 2029.
According to the WHO Secretariat’s initial assumptions, “The target assessed contributions’ increase is set at 50% (50 per cent) of WHO’s 2022– 2023 approved budget for the base segment, at US$ 2 182 million and to be reached by 2028– 2029. This absolute figure (US$ 2 182 million) should not change, even if future programme budgets increase further from the 2022–2023 approved budget.”
If member states across the board do not agree for an increase, there is a risk of top donors directing their finances instead to competing global health actors where they can wield more influence, officials cautioned.
At an event organized earlier this week by The Graduate Institute in Geneva, Björn Kümmel, Chair, WHO Working Group on Sustainable Financing said, that without strengthening WHO, in time, other global health actors will expand their mandates to health systems and response to pandemics – hitherto part of the core mandate for WHO. “This will happen, but we need to strengthen WHO too,” he said.
Kümmel, is also the Deputy Head, Division of Global Health, Federal Ministry of Health of Germany; Vice-Chair, WHO Executive Board.
HOW SERIOUS IS THE FINANCIAL CRUNCH?
Only 16% of the overall WHO finances are accounted for by assessed contributions from member states. Rest is funded by voluntary, earmarked contributions that constrain WHO decision-making on pursuing budgetary priorities.
In its report, concluded that “…the heavy reliance on earmarked voluntary contributions results in a misalignment between the priorities set and the financing of their delivery.” This results in “pockets of poverty” since certain areas such as noncommunicable diseases, emergency preparedness, and data and science functions, remain chronically under-funded. This is even as WHO manages to raise funding to cover its overall budget, but these areas continue to be underfunded.
Having access to and reliance on sustainable financing will help WHO retain staff, ensure a better balance among programmes and regional offices; avoid competition for funds between the different departments and levels of the Organization; enable technical staff to focus on their technical work; and reduce transaction costs for both Member States and the Secretariat, the report says.
“The Working Group recognized that increasing sustainable financing would allow WHO to adjust its workplans to meet new priorities, have the predictability to plan for the longer term, and support the Organization’s integrity, impartiality and independence.”
Recent events illustrate how seriously the lack of financing can impact WHO’s duties and even reputation.
Coinciding with the work on sustainable financing this year was the release of the findings from an independent investigation on the allegations on sexual exploitation in the Democratic Republic of Congo. As a result, the EU, a major donor reportedly suspended funding to WHO in the DRC in October 2021.
But diplomats pointed out that WHO did not and does not have adequate funds to background check recruitment of personnel. (Subsequently, WHO launched a management response plan to address sexual exploitation and abuse)
LEADING UP TO THIS MOMENT
Earlier this year, the Independent Panel on Pandemic Preparedness and Response had recommended: “Establish WHO´s financial independence, based on fully unearmarked resources, increase Member States fees to 2/3 of the budget for the WHO base programme and have an organized replenishment process for the remainder of the budget.”
A decision by the 148th Executive Board established the working group on sustainable financing, to identify and recommend the appropriate sources for funding and options to improve sustainable financing, among other mandates
In its deliberations, the working group adopted a number of different approaches including: “considering the entire base segment as representing WHO’s core work and funding it sustainably.”
The working group also delved into essential functions of the WHO in an effort to prioritize them.
What it found was, “the discussion on prioritization of the base budget is challenging because the development of each programme budget is conducted using a bottom-up approach, which starts from priority-setting at the country level, followed by the regional level and subsequently at the global level. In that regard, the final budget is already a product/result of a detailed prioritization process at the three levels of the Organization.”
In fact, this was a key concern for developing countries.
It has recommended transparency of prioritization of the base budget (i.e. core work of the Organization) through the budgeting process in order to improve prioritization.
It was finally decided that “Many Member States, therefore, supported the flexible financing of the entire base programme budget, as a matter of principle,” the report acknowledges.
WHY AN INCREASE IN ASSESSED CONTRIBUTIONS?
The report notes that assessed contributions “represent a very good return on investment”. During their discussions countries made clear that any increase would need to be implemented gradually over time, also taking into account abilities to pay.
To be sure, some countries emphasized “the severe fiscal constraints associated with the COVID-19 pandemic.” Some countries suggested that WHO should continue to work within available resources, but others were open to a phased approach in the increase in contributions to help broaden the base of WHO finances.
So, for instance, while African countries have supported for a phased increase in assessed contributions, they also suggested “conducting an assessment of the status of Member States’ economies to design a contribution model based on equity and taking into account each country’s gross domestic product as well as its ability to honour its financial commitments, while promoting the idea of sustainable financing for health at national levels, drawing on domestic financing opportunities such as tobacco taxation…”, the report says.
A REPLENISHMENT MODEL FOR WHO?
One of the other routes to sustainable financing, explored by the working group, is adopting a replenishment approach adapted to WHO’s realities. This also follows the recommendation of the IPPPR. Some countries were not convinced whether a replenishment approach would be suitable to WHO’s governance systems, but others wish to pursue this approach further.
In response to our question on the implications of a replenishment approach on WHO governance, Kümmel said at the event this week, “having donors at the table – that is not doable”. There were suggestions that any approach on replenishment should be adopted to WHO realities.
It was also pointed that although the Gates Foundation is a major donor to the WHO, it primarily funded the Polio program which is not a part of the WHO core mandate.
Only about $200 million of more than $4 billion of the “base” budget gets funded by the Foundation. Major WHO member states account of the bulk of the voluntary contributions to WHO for the base segment of the budget. (The Gates Foundation provided $775 million for the total budget in 2020-2021)
If WHO has to attract top donors, in the event it pursues a replenishment approach, WHO must market itself better, the report of the working group seems to suggest.
The report notes that although, “WHO plays a critical role among global health actors, highlighting its extensive country presence, technical expertise and normative work; however, visibility is sometimes lacking with respect to results and impact. …. WHO has not always been able to articulate its essential role in a way which clearly communicates its value proposition vis-à-vis other global health actors.”
GOVERNANCE REFORMS INTERLINKED TO FINANCING
Diplomats working on this matter emphasized accompanying governance reforms that must be undertaken alongside reforms in financing.
Apart from more transparency in priority-setting and budgeting, it has been suggested that reporting to Member States should be more streamlined to help understand on “how flexible funding has been used to address structural issues of the Organization or pockets of poverty, that is financing, at a more granular level,” the report of the working group says.
The report suggests that countries should “address budget prioritization before other reforms of budgetary and resource implications for governance could be truly effective.” Reforming budgetary and resource implications of decisions and resolutions adopted at governing bodies mean that associated costs have to be indicated with a timeline.
There is a suggestion to establish a task group on “strengthening WHO budgetary governance” that includes costing of resolutions, the use of guidelines and thresholds for earmarking, exploring inclusion of non-State contributors.
Linking financing to governance, the report suggests, “The Working Group should recommend a path forward for identifying and negotiating consensus on the governance changes needed to complement any shift to the financing structure of WHO. Several Member States highlighted the need to coordinate between the Working Group on Sustainable Financing and the Working Group on Strengthening WHO Preparedness and Response to Health Emergencies, particularly with respect to governance issues. In view of the existing proposals for the formation of subcommittees through this Working Group, it would be important to ensure sufficient flexibility for alignment between the two Working Groups and no duplication of effort.”
In the context of pandemic treaty discussions, some stakeholders have drawn attention to the importance of financing any new norms on governing future health emergencies.
At the same time, it raises questions and concerns on what implications, any new rules, will have both for governance and financing of WHO.
Even if there will be newer financing facilities particularly around emergencies’ response, such as those proposed by the US or the G20, the world will still need a strong WHO in order for the system to function, sources said. WHO will need to remain a knowledge-based organization, its functions cannot be limited to those of a humanitarian organization, a diplomatic source said.
THE RECOMMENDATIONS BY THE WORKING GROUP:
In the report, the Chair suggested several areas for recommendations including: strengthening and increasing the overall transparency and accountability of the budgeting process of WHO; increasing in assessed contributions, through a stepwise approach and within an agreed time frame; exploring possibilities for a replenishment mechanism aligned with WHO governance; governance reform that include control by Member States over deliverables and initiatives; easing the earmarking of contributions and possibly broadening the donor base and defining a clear pathway for decision-making and implementation of the process by the Executive Board.
The working group drew up a list of recommendations to the Executive Board for consideration. This will be discussed by countries next week.
The suggested recommendations note that any increase in Member States’ assessed contributions should be accompanied by appropriate governance reforms, and also recognized that initiatives are currently under way to expand funding for the global health architecture, need to be linked to the critical need to enhance WHO financing.
Some of these include:
(a) that governance, transparency, accountability and compliance be strengthened through a number of initiatives including, but not necessarily limited to:
(i) mechanisms to be put in place for robust oversight with sufficient time by the World Health Assembly, the Executive Board and the Programme Budget and Administration Committee of all initiatives in terms of results, potential overlaps with existing initiatives, a time frame for implementation and associated costs, financing and reporting, particularly where presented in the form of resolutions or decisions for approval;
(ii) a more transparent presentation of programme budget priority-setting through all three levels of the Organization as a part of developing the programme budget and budgeting for specific initiatives, including discipline within the Secretariat and Member States in committing to new activities. Budgeting processes should be better linked with governance processes, including through additional deliberations of the Programme Budget and Administration Committee;
(b) that the Secretariat improves a mechanism for the fair and equitable allocation and reallocation of resources to fully fund all programme budget outcomes across all major offices and across the three levels of the Organization in order to address the chronically underfunded areas and inform Member States regularly about its progress through the Programme Budget and Administration Committee;
(c) that the base segment of the programme budget should be fully flexibly funded;
(d) that the Secretariat and Member States continue their efforts to boost funding for WHO which:
(i) is flexible or thematic in nature;
(ii) encompasses increased support from donors in developing countries and from the Global South;
(iii) is anchored in robust, national institutions;
(iv) is able to consolidate support from multiple sizes of donor;
(v) explores new and little utilized sources of funding, such as from the private sector;
(e) that Member State donors strive to provide WHO with fully unearmarked contributions for the financing of WHO’s base programme segment as a prerequisite for securing WHO’s financial independence and increasing efficiency of the Organization;
(f) that the Executive Board consider an increase in assessed contributions which would cover 50% of the approved base Programme budget of 2022–2023. This should be done in a stepwise manner, starting from 2024–2025 and achieving the target by the biennium 2028–2029. This should be done in full accordance with the United Nations scale of assessments;
(g) that the Executive Board request the Secretariat to explore the feasibility of a replenishment mechanism to broaden further the financing base which would be based on the following principles:
(i) is Member State-driven but open to all donors;
(ii) addresses both WHO needs for flexibility and donor needs to show accountability for results to their own constituents;
(iii) ensures efficiency and no competition between different parts of WHO;
(iv) aligns with the defined needs of WHO as approved by its governing bodies;
(v) aligns with the global health architecture avoiding competition with other global actors.
At the meeting next week, countries will discuss the report and finalize recommendations based on whether there is consensus on some of the key aspects including on the proposal to increase assessed contributions.
A decision on sustainable financing will be considered by the Executive Board. Based on this, a recommendation will be made to the World Health Assembly in May 2022.
At the event this week, Kümmel said, “It’s showtime”, suggesting that it was time for member states to now walk the talk on sustainable and predictable financing for WHO. “I hope this ambition is not watered down,” he added.
At risk, is not just the financing of WHO, but the very nature of this organization that could be transformed with more resources - or less.
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