Impact of the Financial Crisis on the Developing World

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Gazing at the faces of contrite bankers and somewhat shell-shocked politicians who are in Davos trying to figure out how to right a capsized global economy, I wish to remind them that if the world’s rich think they have never had it so bad, the developing world is having it worse.

Prof. Michel Kazatchkine, Executive Director of The Global Fund

As head of The Global Fund to Fight AIDS, Tuberculosis and Malaria, an organization which has put 2 million people on life-saving antiretroviral therapy since it was founded 7 years ago, I am acutely aware of how vulnerable developing countries are to getting caught in the brutal downdraft of the financial crisis.

In this regard, I welcome US financier George Soros’s candid admission that the developing world is likely to be handed a particularly raw deal in a crisis that is not of its own making. Writing in the Financial Times on Jan. 29, Soros said “How unfair the system is has been revealed by a crisis that originated in the US yet is doing more damage to the periphery.”

In the middle of this turmoil, rich nations cannot forget they have a responsibility to help narrow huge inequities between rich and developing nations, especially in access to healthcare. Now is not time for the richest countries to focus solely on their own back yards or to turn their backs on poverty and disease. Health is one area where we are really making a difference.

Although the proportion of people in developing nations living in extreme poverty, or on less than 1 dollar a day, has fallen since the beginning of the 1990s, the gap between rich and poor grows ever wider. For example, the share in national consumption in the developing world of the poorest quartile of the population fell from 46 percent to 39 percent between 1990 and 2004. Even more worryingly, wealth remains a key determinant of access to healthcare in developing countries.

Every year more than 100 million people are made destitute, falling below the absolute poverty line, because they are saddled with back-breaking health bills. Putting this situation to rights is in everybody’s interest. Without access to proper healthcare there can never be real development. Health must be at the core of development; it is not just a desirable add-on. In a globalized world, the health and security of the poorest nations are inextricably linked with the health and security of the richest.

Nobel Prize-winning economist Paul Krugman has summed up the challenge neatly: Investing in reducing inequalities in health, and in education, are not only important for reasons of ethics and equity, but contribute to restoring economic efficiency, functional markets and global growth.

These are the messages I will be sharing with world leaders at Davos this week.

Professor Michel Kazatchkine‘s op-ed was first published by the Huffington Post

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