There has been mounting concern of late among development folks that the current economic crisis, which has now really become a global economic crisis, could have important effects on the amount of money available for development programs, including global health initiatives.

Laurie Garrett, Senior Fellow for Global Health at the Council on Foreign Relations, eloquently argues in a recent piece that:

“…for reasons of political influence, national security, global stability, and humanitarian concern, the United States must, at a minimum, stay the course in its commitments, meeting prior promises to double aid to global health and development, as well as basic humanitarian relief.”

The current economic crisis seems to be creating a perfect storm of factors that could lead to decreased foreign aid: rising inflation means that running aid programs will cost more, tightening donor budgets means less money will be available for development, the declining US dollar relative to foreign currencies means that money given is just off the bat worth less, and of course tightening of credit markets means that poor countries will need to increasingly have to rely on credit, which may come with lots of strings attached conditions.

Laurie provides some real examples of how the crisis is already affecting global health programs:

“The Haitian Health Foundation serves the needs of 250,000 residents of rural Haiti. The cost of fueling its ambulances has risen 50 percent during 2008; food inflation has driven some 40 percent of the target population into malnutrition; and cuts in U.S. government support have reduced funding by 40 percent.”

“A Minnesota organization assists the Tanzania Child Survival Project. Over the last twelve months, the value of the U.S. dollar against the Tanzania shilling has declined 16 percent, and the costs for fuel, transport, food, and supplies have increased. Fuel prices alone have soared more than 20 percent. Overall, the project has seen an approximately 30 percent decrease in grant value.”

So what does this all mean for the future of aid programs? We may not be able to do much about some declines in foreign aid, so my view is that hopefully this crisis will make us ask whether or not we are making the best use of funds that are available for global health. Like most of the world that is currently trying to deal with the changes in their finances it may mean that donors more carefully evaluate how they spend their money. Cutting back on things that we value less, making sure we spend our money on the things that will give us the most value for our money.

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