The U.S. allegedly threatened to withhold funding from WHO unless its text on “earmarking” contributions was agreed to in the decision on the replenishment proposal
Newsletter Edition #188 [News Flash: #WHA76]
Hi,
There is theater. And then there is backstage. Today we bring you a story that essentially shows how decision-making in global health in Geneva are taken on and off stage.
Just yesterday, WHO member states adopted a decision to increase their contributions to the organization at the World Health Assembly. Even as plans are afoot to raise flexible funding using a replenishment mechanism for cash-poor WHO, there have been efforts by some member states to continue to earmark their contributions.
For the first time, a decision by the WHA could legitimize earmarked funding. This, sources say will have deep implications for WHO finances and governance.
Also, the story shows the importance of multilateralism in global health – often it takes just a few countries, in fact even one country, to raise questions and draw attention to significant turns in global health governance.
Phrases like “the Geneva spirit” and “walk the talk” assume new meanings in such circumstances.
Write to us with your thoughts. Thank you for reading.
If you find our work valuable, support us! Accountability journalism is tough and expensive. Help us in raising important questions and bringing closed door negotiations to light in a timely manner. Readers paying for our work helps us meet our costs.
Watch out for our additional analyses on the Assembly in the coming days.
Until later!
Best,
Priti
Feel free to write to us: patnaik.reporting@gmail.com or genevahealthfiles@protonmail.com; Follow us on Twitter: @filesgeneva
I. STORY OF THE WEEK
The U.S. allegedly threatened to withhold funding from WHO unless its text on “earmarking” contributions was agreed to in the decision on the replenishment proposal
Claims “inaccurate” says U.S. official
The United States allegedly threatened to withhold funding to WHO, unless its suggested language on “earmarking” contributions was agreed in the decision text on the replenishment proposal, according to sources who were a part of the deliberations around a new replenishment mechanism that will be discussed later this week by the World Health Assembly.
An official from the U.S., described these claims as “inaccurate”. (See response from the U.S. below.)
Sources also added that the WHO secretariat buckled under pressure and gave in to the demands of the U.S. - one of the biggest donors of the organization. These discussions took place last week in the context of several heated consultations on the replenishment mechanism, leading up to the on-going Assembly. Earmarked contributions from donor countries, in effect, determines how the funds are used by WHO, giving the organization less latitude to determine its priorities in line with the wider membership of 194 countries.
In addition to the U.S., other member states notably Monaco and Germany also endorsed earmarking contributions to WHO, sources said.
Such efforts could have significant implications for WHO’s financing and governance. Also note, that this runs counter to on-going efforts to make WHO less dependent on earmarked funds. As we reported earlier, flexible financing for WHO, is one of the principles underpinning a suggested replenishment proposal, first recommended last year by the Sustainable Financing Working Group.
Sources said that this will have deep implications for future deliberations, since it is for the first time that earmarking of contributions will be referenced in a WHO resolution when this proposal is adopted later this week at the WHA. This opens the door for donor countries and other actors to push for less flexible financing for WHO, based on such adopted language at the Assembly.
This story looks at these discussions in detail and brings voices from those in the room including developing countries, the US and WHO.
TENSE NEGOTIATIONS
In what were reportedly tense negotiations, a few countries tried to water down the US language, but the revised decision text, seen by Geneva Health Files, reflects the suggestions made by the US. (This text now stands revised – and has not yet been published by WHO, by the time this story went to print. See below for revised text.)
The challenge for WHO is that only 14% of its funding is fully flexible, according to a report filed for this year’s WHA. These funds largely come from membership fees paid by countries known as assessed contributions, which are flexible in nature and are used to cover the organization’s core budget. The rest of WHO’s funds are mostly “voluntary” support from countries and donors that are earmarked for specific programs. (See our story from January 2023: WHO on the Replenishment Bandwagon)
By legitimizing earmarking of funds using WHO processes, the organization runs the risk of further misaligning its priorities dictated by funders, critics fear.
“Earmarking leads to misalignment of the organisations priorities and the ability to fund them. Donors might be pumping millions of dollars into the organisation but it does not help the situation if the funds cannot be used in areas where they are really needed. Africa for example has huge pockets of poverty and part of the problem is the earmarking of funding,” diplomats said.
In general, lack of flexible and predictable financing introduces uncertainty in WHO operations, even in critical areas such as health emergencies, noncommunicable diseases, mental health, and nutrition to name just a few. These chronically underfunded areas are known in WHO parlance as “persisting pockets of poverty.”
(See earlier story from last week: A Watershed for WHO Finances & Governance? WHO Investment Rounds: A Replenishment Approach [WHA76 Primer])
DEVELOPING COUNTRIES PUSH FOR TRANSPARENCY AROUND EARMARKED FUNDING:
Sources told us that some developing countries tried to include language on the need to increase transparency around earmarked funding and fought back on the language on earmarking.
According to sources, Namibia tried to qualify the language as much as possible. They argued that there was really no need to openly promote earmarked contributions in a decision of the WHA.
“The decision will be used to justify the continued practice of earmarking funding which goes against the recommendations of the Working Group on Sustainable Financing, which by the way are binding because they were adopted by the WHA75,” according to a source involved in the discussions.
“The recommendations of the WGSF did not prohibit earmarked funding, it merely requested Member States to strive towards provide fully unearmarked voluntary contributions to the organisation. With the explicit reference of earmarked funding two diametrically opposed objectives will be adopted by the WHA,” the source said.
Paragraph 39 c of the recommendations of Working Group on Sustainable Financing (WGSF) provided that States and other donors should "strive to provide" unearmarked funding.
(See here: the recommendations made by the WGSF, adopted by the Assembly last year, underscoring the importance of flexible financing)
Many developing countries refrained from engaging much during these consultations last week, that have largely been seen as those concerning on “donor countries” typically from the developed world, sources said.
However, some countries did make public statements pushing for transparency of funding, at a session yesterday at the Assembly, which adopted an increase in assessed contributions. (See more on ACs below)
RESPONSE FROM THE U.S.
To be sure a number of countries, apart from the US have often raised efficiency concerns with the way the WHO manages its finances. This has led to a more focused efforts deliberating on financing and governance matters at WHO, through the Agile Member States Task Group on Strengthening WHO's Budgetary, Programmatic and Financing Governance. Such efforts are also a part of the overall financing reforms being undertaken following the deliberations of the working group on sustainable financing.
Nevertheless, flexible financing has been identified as a key principle for a WHO replenishment.
Responding to our queries, a U.S. health official told us this week:
On whether the U.S. is in favor of earmarking its contributions to the WHO:
“Among his first acts in office, President Biden declared the United States would reengage with WHO, highlighting our nation’s commitment to advancing multilateral cooperation in a time of international health crisis. The U.S. remains committed to sustainable financing for WHO. We see voluntary contributions to WHO as important components of its sustainable funding, whether earmarked or unearmarked. Given U.S. appropriations law, U.S. voluntary funding to WHO is generally earmarked. In addition to voluntary contributions, the U.S. and other member states provide assessed contributions, which are unearmarked.”
On whether the U.S. is not in favor of unearmarked contributions in a future replenishment mechanism:
“As noted above, the U.S. sees voluntary contributions to WHO as important components of its sustainable funding, whether earmarked or unearmarked. We expect both would be featured in WHO's proposed new investment round. We made clear during the PBAC discussions about the proposed new approaches to advancing sustainable financing for WHO that the United States is firmly committed to our shared goal of ensuring the WHO is sustainably financed to meet today’s health challenges, and that we want the Secretariat’s investment round initiative to succeed.”
(PBAC: Programme Budget and Administration Committee, WHO)
On whether the U.S. threatened to pull funding from WHO, unless its conditions on earmarking were met - in the decision text on the replenishment proposal:
“This is not accurate. We noted for the room the importance of clarifying in the decision text that WHO will continue to accept earmarked voluntary contributions. We explained that we were seeking a clear message to Member States and other donors in this regard so as not to jeopardize these kinds of contributions, which would be devastating for WHO and would undermine our shared goal of sustainable financing.”
GERMANY’S CONTRADICTORY STANCE; MONACO THROWS WEIGHT BEHIND EARMAKRING
Apart of the US, it is learned that Monaco, and Germany, among others, also pushed for earmarking of contributions during the consultations. Recall that Germany, played a crucial role and led the discussions on the Working Group on Sustainable Financing over the last two years.
“It was quite surprising that Germany supported an explicit reference to earmarking contributions,” a source told us.
THE ROLE OF WHO
According to a source who followed the discussions, Namibia also took exception to the attempt by the Secretariat to influence the discussions. They stated that "Secretariat does not have the powers to dictate how Member States negotiate. They can provide guidance. It is a dangerous precedence to allow the Secretariat to dictate negotiating positions."
A WHO statement, in response to our queries, read thus:
“WHO is a Member State organization and the Secretariat is guided by our Member States as expressed via their governing bodies. Over the course of a series of informal consultations earlier this year, a broad group of Member States shared their views, questions and concerns about the replenishment mechanism, investment rounds and other concepts proposed by the Secretariat. The Secretariat responded by adjusting the proposal to seek to find an approach that met the needs and ambitions of the Member States. Member States negotiated and ultimately reached consensus on the decision text during the PBAC, and the World Health Assembly will be considering this matter next.”
PRINCIPLES UNDERPINNING A WHO REPLENISHMENT MECHANISM
The principles to guide a replenishment process for WHO, recognizes the uniqueness of WHO’s role in global health. According to what was agreed by member states during these deliberations last year, “any WHO replenishment mechanism, with relevant rules of procedure, should be based on the following principles: (i) is Member State-driven and approved by the Health Assembly and open to all donors that comply with the Framework of Engagement with Non-State Actors; (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 and is oriented to prioritize the financing needs of the base budget in all its components; (v) aligns with the global health architecture avoiding competition with other global actors; (vi) aligns with resolutions and decisions of the Health Assembly.”
DELAYED IMPLEMENTATION OF REPLENISHMENT PROPOSAL?
We reported earlier that the secretariat emphasised urgency in kicking off the replenishment process. And yet, it is learned that the US sought to delay the implementation of this proposal.
The replenishment proposal emphasizes immediacy and urgency in launching this process. The document prepared by the secretariat had suggested:
“Recognizing that some global health funds are already planning to hold replenishment activities in 2025, and in keeping with the principles adopted by Health Assembly, the pledging event for the first WHO investment round would be held in the second half of 2024. In addition to avoiding competition with the replenishment plans of other organizations, starting immediately underlines the urgency of the health-related Sustainable Development Goals and accelerates progress towards the Member States’ goal of sustainable financing of WHO. Together with the expected increases in assessed contributions, the first WHO investment round would facilitate early and full implementation of the draft Fourteenth General Programme of Work. This timing would require a decision by the Seventy-sixth World Health Assembly for the Secretariat to proceed immediately with a WHO replenishment mechanism, the development of that proposed General Programme of Work as the strategy on which the first WHO investment round would be based, the elaboration of an associated investment case, the design and operationalization of the round itself, and the establishment of an investors’ forum.”
“The US was pushing for delayed implementation of the Replenishment mechanism, while at the same time insisting on explicit recognition earmarked funding. Why would they participate in replenishment rounds that are based on the principle flexible funding if they can just earmark their funding. So, if their contribution is low, or if they do not make any contribution under the replenishment mechanism, they can always point to their voluntary earmarked contributions to WHO,” the source present at the consultations last week said.
It is expected that a WHO replenishment would be attractive for private actors in the U.S., and elsewhere including large foundations. (Japan for example suggested yesterday, introducing other various financing methods such as private funds in terms of securing sustainable financing.)
REVISED REPLENISHMENT PROPOSAL: 18 May 2023
Revised secretariat proposal for draft WHA A76/32 decision [dated 18 May 2023] (see older text here dated 11 May 2023)
The Seventy-sixth World Health Assembly, having considered the report of the
Director-General on Sustainable financing: feasibility of a replenishment mechanism, including options for consideration,[1] decided:(1) to welcome the continued efforts to improve the sustainable financing of the World Health Organisation;
(2) to urge Member States[2]and other donors[3] to ensure the full financing of the base budget segment of the Fourteenth General Programme of Work, and to continue to strive to provide WHO with unearmarked voluntary contributions consistent with the recommendations of the Working Group on Sustainable Financing adopted by the Seventy-fifth World Health Assembly;
(2bis) to continue for WHO to accept, alongside unearmarked voluntary contributions, voluntary contributions[4] that are earmarked and/or single-year contributions from Member States and other donors and further increase transparency of reporting on voluntary earmarked contributions and on their impact and allocation across the three levels of the Organization
(new text – bold ours)
(3) to request the Director-General, in consultation with Member States, including through regional consultations and with due consideration of FENSA,
[a]to proceed with the planning of a WHO investment round for the last quarter of 2024 to facilitate the financing of the Fourteenth General Programme of Work, to provide regular updates to and receive advice from Member States and present a report with a full plan that includes modalities and anticipated costs and efficiencies (including staffing adjustments) for undertaking this exercise, for consideration and approval of concrete next steps by the Executive Board at its 154th session, through the Programme Budget and Administration Committee at its 39th meeting and to submit an updated report to the Seventy-seventh World Health Assembly, through the Programme, Budget and Administration Committee at its fortieth meeting;
(a) to draft a Fourteenth General Programme of Work that is effective from 2025, includes a financing envelope, and articulates a strong results narrative which demonstrates the added value of WHO’s normative work and technical support in achieving country-level impact, drawing on lessons learned from the Thirteenth General Programme of Work for approval by the Seventy-seventh World Health Assembly, through the Programme, Budget and Administration Committee at its thirty-ninth meeting and the Executive Board at its 154th session;
(b) to develop a target funding envelope for the WHO investment round, based on the base segment of the financing envelope to deliver the draft Fourteenth General Programme of Work, minus the approved and expected assessed contributions;
(c) to include an evaluation element in the planning of the WHO investment round prior to consideration of additional investment rounds.
WHA76 ADOPTS THE INCREASE IN ASSESSED CONTRIBUTIONS FROM COUNTRIES
Meanwhile, in a historic move yesterday, WHO member states agreed to the WHO’s Programme Budget for 2024-2025, committing to a 20% increase of assessed contributions.
A statement from the WHO said:
“During discussions in Committee A of the Assembly, Member States agreed today the draft resolution with the proposed programme of work for the next two years (2024-2025). The budget to deliver on this programme was also agreed, at US$ 6.83 billion, the most ambitious to date, and which includes a historical 20% increase of assessed contributions (or membership fees). The Secretariat and the Director-General thanked Member States for the overwhelming strong support for the resolution, and the confidence and trust placed in WHO. Nearly forty Member States took the floor. Decisions taken during the week in the Committees, are subject to a final procedural step, of approval by the plenary at the end of the Assembly.
The budget is allocated around the following strategic priorities: One billion more people benefiting from universal health coverage, US$ 1966.4 million; One billion more people better protected from health emergencies, US$ 1214.0 million; One billion more people enjoying better health and well-being, US$ 437.7 million; More effective and efficient WHO support to countries, US$ 1350.0 million;
This makes a total of US$ 4968.2 million for the base programmes, which remains unchanged with respect the Programme budget 2022–2023;
In addition, the approved budget includes: Polio eradication (US$ 694.3 million), special programmes (US$ 171.7 million) totalling US$ 866.0 million; and Emergency operations and appeals (US$ 1000 million).
With the increased assessed contributions, Member States will contribute US$ 1148.3 million towards this budget with their membership fees. The rest, US$ 5 685.8 million will be covered by voluntary contributions made by Member States and other contributors.
Some countries emphasized the importance of transparency in WHO financing and in utilization of resources.
In a discussion on assessed contributions at the Assembly yesterday, Brazil said:
“…the urgent need for WHO in its process of governance and financing reform to address the persistent and current under-funding of the Americas region while noting the specific aspect on voluntary contributions…..
However, the practice of complete disclosure of information on expenditures of Member States in order to ensure transparency is not only indispensable but also something customarily adopted by the UN agencies and it's high time the WHO follows this path.”
Thailand said:
“The effective use of budget will ensure better health at country, regional and global levels. While Thailand approve the programme budget 2024-2025, we have the following concerns: Thailand reiterates the importance of transparency, accountability and performance of budget allocation and utilisation. Since 1990, earmark voluntary contribution has been a long standing major funding source of the WHO activities…in the biennial 2020-2021 total specified voluntary contribution was more than 70% of the total funding stream while assessed contribution was less than 13%. This means most Member States contribute to maintain this organisation just to implement donor policy and interest. It also means that the ownership of Member States [has] continued to decline. In such a case, Thailand reiterates the importance of the increased proportion of contributions…one of the best options apart from increasing the assessed contribution is to stop accepting earmarked contributions for any sort. The organisation can survive beautifully with increased efficiency and less earmarked donations.”
“NO FREE LUNCHES”
Often developed country diplomats have told us in the past, that there are really no free lunches in global health alluding that donor financial support will inevitably come with conditions, and that this is to be expected.
They pointed to other global health agencies like The Global Fund and Gavi – The Vaccine Alliance, where donor countries have a say in the governance of these countries. (GAVI currently has a 2021-2025 budget of US$ 21.2 billion.)
While that is a reality, in the case of WHO, its unique multilateral nature and norm-setting capacity distinguishes itself from other implementing organizations in global health – and hence the need to safeguard its governance and the sensitive nature of financing, observers say.
“In theory, the World Health Organization (WHO) is the coordinating agency for global health. Influential private and public actors have claimed the relevance and central role of this United Nations (UN) agency. In practice, paradoxically, the money budgeted for health goes largely to other institutions and not to the WHO. New institutions and mechanisms have been created to which funds are channelled (GAVI, The Global Fund, Act-A, CEPI, COVAX, etc.). These institutions or mechanisms are, in most cases, public-private partnerships where the pharmaceutical industry is usually present. Official Development Assistance is important but represents only 1 per cent of what developing countries’ expenditure on health,” Germán Velásquez from the South Centre noted in a recent paper. (See: South Centre - Where Does Global Health Funding Come From And Where Does It Go?)
[1] Document A76/32.
[2]And regional economic integration organizations, as appropriate.
[3] When engaging with donors representing non-State actors, the Secretariat will apply relevant policies and rules including the WHO Framework of engagement with non-State actors (FENSA)
[4] As reflected in the WHO Programme Budget Portal (https://open.who.int) and in the annual WHA information document on voluntary contributions
(Nishant Sirohi contributed to this story)
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Clear and concise article, thanks Priti. Always good to learn on what's happening in the back kitchen.