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Donors cut off health pipeline

Fallout of failure to implement reforms

NAIMUL HAQ
Donors last week suspended a US$123 million fund for the health sector.
The decision was made as the government failed to "implement" the reforms and adopt agreed on policies prior to inception of the current five-year health and population sector programme (HPSP).
The donors formally conveyed to the government on March 30 that the decision to suspend the fund was taken "particularly in view of the government's recent decision to reverse unification of health services without prior consultation with the International Development Agency (IDA) and its co-financiers".
The country director of the World Bank, Frederick T Temple, informed
Economic Relations Division (ERD) Secretary Anisul Huq Chowdhury of the decision late last week. Finance and health ministers, health secretary, the head of DFID and envoys of the Netherlands, Sweden and European Commission were also informed of the decision.
Earlier, representatives of the donors met with Finance Minister M Saifur Rahman at the National Economic Council auditorium on March 12 and conveyed their decision to suspend the funds for the health sector.
This is the first time that the government has suffered such a major setback like the donors officially suspending funds for a vital sector. The government did not immediately comment on
how it planned to cover up the shortfall of $123 million, which would have been disbursed for salaries of family planning fieldworkers, in-service training, procurement of some major hospital equipment and other apparatus.
The government has been implementing health projects since 1972 with support from the donors, but this is the first time external financing in the sector has been suspended.
The letter said that "agreed institutional reforms and policy development mandated under the programme have not progressed as intended. The most important organisational reform the unification of the health and family planning wings has not been completed and the process is to be reversed, the secretariat and directorates are yet
to be restructured."
It also said that the "organisation and the staffing required for improving financial management remains incomplete. Hospital autonomy and decentralisation of management to district and upazila levels has not been authorised and a pro-poor agenda has not been prepared or adopted."
It further said that "there has been no action to institutionalise stakeholders' participation in the programme development." It also added that the "regulatory framework for the provision of private health services has not been prepared yet."
The donors, however, said that the partial suspension would be withdrawn if "a satisfactory action
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plan with indicators and dates for completion of the agreed reform agenda or an alternative reform agenda which will achieve the objectives of HPSP with an action plan, indicators and dates for completion, satisfactory to IDA and its cofinanciers is received by April 30."
It also said that disbursement of funds for essential commodities would remain unaffected.
A key development partner when contacted said that the suspension indicates that the donors and IDA would not take part in future health programmes in Bangladesh. He said, "The government has violated agreement which is a serious concern. Agreed reform in the health sector is a must for development, but the ministry is going back to where it was about five years ago. So the future vision of the government is not well understood."
Health Minister Dr Khandaker Mosharraf Hossain is not concerned about the action of the IDA and its cofinanciers saying 'In the last five years the IDA and other donors have not made any significant contribution to the sector'.
When contacted he said he did not see the content of the letter yet, but said that the decision would not hurt the government.
"We are in the process of preparing a budget for the next phase of the
health programme. If we need funds we would send a formal request but I don't see any problem if they suspend disbursement of such a small amount (referring to $123million)."
Regarding the unification he said, "The unification process started wrongly. It should have been topdown but it originated from upazila and above which is hampering all activities in the sector. We are making some changes to bring reform in the sector."
The minister also said that if there is shortage of funds, the government would have its own strategy to finance major projects in the sector. He further said that he did not agree with some of the reforms and action plans as agreed by the previous government in HPSP, like 'unnecessary' expenditure for hiring foreign consultants.
"We would go by our needs not theirs. So if we require their assistance we would make a formal request but we would not be forced to abide by their dictates," the minister added.
Until June 2002, HPSP spending, starting in July 1998, stands at $1.6 billion out of a total of $2.1 billion for HPSP (1998 June 2003). The development partners and IDA committed a total of $800 million as pool funds, while other donors like CIDA, German overseas aid agencies, UN agencies committed $200 million. The rest would come from the government's own funds.