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Rethinking Health Spending

  • M Farhan
  • July, 2020
  • 268
  • Special Report

Pakistan currently spends an abysmally low amount on its health

The federal government is expected to present the annual budget for the fiscal year 2020-21, its second federal budget, in the parliament on June 12. A government’s budget decisions affect not only the size of the pie but also how equitably the pie is distributed, including whether the poorest members of society have opportunities to enhance their freedoms and wellbeing. In the midst of the current pandemic, it is all the more important that the next budget be developed so that the country is not only better prepared to deal with the expected wave of increasing cases of Covid-19. But we also need to take this as an opportunity for introspection on its own misplaced priorities that have long ignored public health investments.

Pakistan currently spends an abysmally low amount on its health. In Pakistan, for instance, government spending on health per capita was $42 in 2014. Current health expenditures (public and private) as a percentage of GDP were a meager 2.90 per cent in 2017 according to World Bank data. In contrast, Afghanistan spent 11.78 per cent of its GDP on health in 2017. A 2017 Lancet study analysed the different sources of funding for healthcare services in 184 countries, including Pakistan. The study found that economic development plays an important role in predicting health spending for Pakistan, but perhaps an even more important predictor for future heath spending for Pakistan would be re-prioritisation of government spending on health.

There are two issues which I would like to highlight. First, it is critical that the entire budgetary process be made more transparent. Given the public nature of budgets affecting wellbeing of all concerned, it’s important that budgets be made transparent and inclusive so that perspectives of not only different provinces and businesses are heard, but civil society, academics and health professionals are also heard. In 2019 (covering fiscal year 2018), Pakistan scored an abysmally low score of 28/100 on the Open Budget Index, placing us 93 out of 117 countries. Even Afghanistan and Nepal had scores of 45 and 41 in 2019, respectively. The country’s budget transparency score, reflected on the Open Budget Index, assesses the public’s access to information on how the central government raises and spends public resources. A transparency score of 61 (out of 100) or higher indicates a country is likely publishing sufficient material to support informed public debate on its budget. Pre-budget statements, mid-year reports, year-end reports and audit reports need to be not only prepared but also publicly released in a timely manner.

Second, we need to reevaluate the way we think about health itself. In modern economies, there is no security without health investments. In the interest of national security, among other reasons, we should invest more in capacities for the detection, prevention and response to infectious diseases like Covid-19. From this perspective, it’s all the more important that the federal government coordinates the response for Covid-19 with the armed forces as well as the provinces, reflecting such coordination in its budgetary allocations for defence and NFC award.

Moreover, as I highlighted in my 2019 TEDx Talk, Busting Myths about Health and Wealth, there is no wealth without health. Modern economies are built on skilled labour. Health directly affects labour productivity but indirectly education, personality traits and skill development are all affected by health. According to the Lancet Commission on Investing in Health, health investments in low and middle income countries like Pakistan can produce economic benefits that would exceed the costs of investment between 9 and 20 times. One hopes that the next budget will re-prioritise health spending. By investing in health through a health sensitive budget, Pakistan would not only be saving lives and promoting human rights, it can also further its economic interests strategically for a safer, healthier and wealthier Pakistan.

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