World Bank and Poverty Alleviation

by Priya Rajan
AID India
I would like to thank Karthik Ramanathan for providing the summary of Dr. Gupta’s talk.

Dr. Vineeta Gupta is a renowned medical doctor and a human rights activist, who recently spoke at a seminar in Houston, Texas (USA). It was a pleasure hosting her, and the seminar was one of the best we (AID) have had in Houston. Dr. Gupta discussed many issues relating to health and human rights, shared her personal experiences, and made recommendations on policy changes.

Dr. Gupta started with different levels of health treatment available to Indian citizens, namely primary, secondary and tertiary, and the constitutional right for all Indian citizens to basic medical treatments.

Vineeta Gupta

Dr. Gupta’s presentation also focused on the central and state budgets in hospitals and its transformation into corporation thereby making expense unaffordable for the common masses. Vineeta discussed the problems of corruptions and funding for mega projects from the World Bank, an organization that is privatizing healthcare in Third World countries by funding commercial projects in the name of poverty alleviation.

India is an excellent example of this trend. The Punjab Health Systems Corporation (PHSC), financed by the World Bank, is facilitating the commercialization of healthcare in Punjab. The result, however, is more expensive and less accessible healthcare for the poor, parallel health infrastructure, and increased corruption. The problems that were identified with the World Bank’s work in the health sector include, among others:

1. The WB promotes healthcare as a commercial activity, thus advancing the underlying philosophy that those without money will not receive treatment. This results in a denial of the right to health and undermines the state’s responsibility in providing basic healthcare to its citizens.

2. The poor and women are hit worse by the increased costs of treatment. This often forces them to depend on quacks and superstitious methods of treating their medical problems. Though banned by the courts, “quacks” (unqualified medical practitioners, most of them totally illiterate) flourish in India because medical treatment is unaffordable for common people. Quack practitioners can undermine healthcare, by spreading communicable diseases like AIDS and Hepatitis-B, and will often provide inadequate guidance on the use of drugs, thus increasing drug resistance.

3. Provisions to facilitate healthcare access for the poor are often designed in a way making it difficult for people to take advantage of the services. For example, in parts of India the poor require a government-issued ‘yellow card’ in order to access certain benefits. However, actually getting this card is extremely difficult. Under WB health corporation projects, costs by component and categories of expenditure are allocated in such a manner that non-medical items, like furniture, are prioritized over lifesaving drugs.

4. There is a lack of accountability and transparency as to the functioning of WB-funded health corporations, and this encourages certain kinds of fraud and corruption. For instance, certain medical supplies lend themselves to accounting fraud during the purchasing process. These supplies are sometimes bought not because they are needed but because they are a source of corrupt revenue for corporation employees. As a result, supplies do not correspond with demand. There are numerous well-publicized reports where disposable syringes are supplied without any injectable medicines; surgeons’ disposable masks and caps are supplied to centers with no surgical facility. Intravenous (I.V.) infusion sets are supplied without any I.V. fluids; lab chemicals are supplied to centers with no laboratory; X-Ray machines are installed at many places without any radiographer to use them; and medical goods that are nearly expired are purchased in much greater quantity than are required.

5. Huge WB loans often lead to increased corruption since there is a lack of concern for the utilization of the loan. A corruption scam at Sangrur in Punjab provides a good example. The WB funded a $US600 million Reproductive and Child Health (RCH) Project, which fell victim to the siphoning off of funds by individuals within the project. World Bank funded healthcare projects often suffer from poor management because the problems of the previously state-run health services are not addressed. Instead, every failure is deliberately attributed to the lack of funds.

6. The WB’s funding for parastatal healthcare corporations that operate in parallel to state institutions is the source of great confusion for disadvantaged as well as common consumers. The same set of bureaucrats in charge of previous systems head these corporations. In Punjab this has created confusion among healthcare providers and recipients as to the division of responsibility between the state health department and the corporation for service delivery.

7. In an attempt to increase profits, health personnel are pressured with monthly targets and the fear of punishment if they fail to meet them. This results in malpractice, as the doctors try to achieve targets by hook or by crook. In a recent move, the Punjab corporation doctors were allotted a minimum number of major and minor operations to be performed, plasters (for fractures of bones) to be cast, patients to be admitted, and invasive tests to be done.

8. Bank lending may result in increased state debt without generating any positive outcome. Ordinary people end up paying this back through a further decrease in spending on health, education and public services. More debt means more cuts in subsidies for basic services, more out-sourcing of public services and huge increases in fees in educational institutions. The result is that people’s social and economic rights are undermined and the state increasingly absolves itself of responsibility towards its citizens.

9. The Bank also uses its lending in some sectors as leverage to dictate policies in other sectors. For example, the World Bank approved India’s US$272 million integrated rural water supply and environmental sanitation project in 1995. When the government made the unrelated announcement that it intended to provide free electricity to certain farmers, the WB stalled the aforementioned project in order to influence the government’s electricity related announcement.

Not only does the World Bank financed privatization of the healthcare system undermine healthcare provision to marginalized populations, but the projects also serve to increase the overall levels of indebtedness. This results in the states growing subjugation to the dictates of international financial institutions who use their leverage to influence an expanding range of sectors.

Lack of transparency and accountability is leading to lot of problems especially corruption. People should know their rights and duties so that these corruption practices can be eliminated. After the seminar, we had a long informal discussions on activism, corruption, remedial methods etc. In the end it was a worthwhile evening for many, as most of us learnt a lot from Dr. Vineeta Gupta.