Did IMF Policies Contribute to the Ebola Outbreak in West Africa?

January 20, 2015

Academics from the universities of Oxford and Cambridge, and from the London School of Hygiene and Tropical Medicine, have criticized the International Monetary Fund (IMF) for advocating economic policies that they claim restricted health care spending and contributed to the Ebola outbreak in West Africa.

In a comment published in The Lancet Global Health, Alexander Kentikelenis, Lawrence King, Martin McKee and David Stuckler said the outbreak spread rapidly due partly to the weakness of health systems in the region. They said IMF policies had prevented governments from investing in these systems.

The IMF recently announced US$430 million of funding to fight Ebola in Sierra Leone, Guinea and Liberia.

"By making these funds available, the IMF aims to become part of the solution to the crisis," Kentikelenis and colleagues wrote. "Yet, could it be that the IMF had contributed to the circumstances that enabled the crisis to arise in the first place?"

The academics noted the IMF had provided financial support to Guinea for the past 21 years, while it had supported Sierra Leone and Liberia for 19 and seven years, respectively. As the Ebola outbreak began in West Africa, all three countries were under IMF programs.

But IMF lending came with "conditionalities" that required governments to adopt policies that have been criticized for prioritizing short-term economic objectives over investment in health and education, the academics said.

Governments were required to reduce spending, prioritize paying back loans and bolster foreign exchange reserves, they said, noting that such policies absorbed funds that could have been directed toward national health systems.

Kentikelenis and colleagues said the IMF often required caps on the public-sector wage bill, thereby limiting funds for the recruitment and remuneration of doctors, nurses and other health professionals.

In Sierra Leone, for example, the academics said IMF-mandated policies explicitly sought the reduction of public sector employment. Between 1995 and 1996, the IMF required the retrenchment of 28% of government employees, and limits on wage spending continued into the 2000s, they said.

Kentikelenis and colleagues also questioned the IMF’s preference for decentralized health systems.

The idea is to make care more responsive to local needs. Yet, in practice, this approach can make it difficult to implement coordinated, centralized responses to disease outbreaks, the academics said.

"All these effects are cumulative, contributing to the lack of preparedness of health systems to cope with infectious disease outbreaks and other emergencies," they said.

The IMF responded to these criticisms, claiming there were several factual inaccuracies in the comment by Kentikelenis and colleagues.

"It is not correct to say that health-care expenditures have declined in Sierra Leone, Guinea, and Liberia,” wrote Sanjeev Gupta, deputy director of the IMF’s Fiscal Affairs Department, in a letter to The Lancet Global Health. "Spending on health and education have increased faster in low-income countries with programmes supported by the IMF than in those without."

According to IMF estimates, Sierra Leone saw a 0.24% increase in spending between 2010 and 2013, while Guinea saw a 0.7% increase, and Liberia saw a 1.6% increase in spending during the same period.

Gupta said the IMF did not require caps on the public-sector wage bill.

Rather, he noted the IMF announced a new policy on wage bill ceilings in 2007, "as part of an overall effort to promote more effective and sustainable use of aid flows to low-income countries."

He said IMF programs in Guinea, Sierra Leone and Liberia did not have any limits on the wage bill during the period 2000 to 2014.

"The fact is that Guinea, Sierra Leone, and Liberia were doing relatively well trying to overcome years of instability, including civil wars that claimed tens of thousands of lives and had a devastating effect on social infrastructure," Gupta concluded. "The arrival of Ebola put severe pressure on already fragile infrastructure and health-care systems. The IMF recognised the urgency of the situation and moved quickly to help."

According to Gupta, the IMF made available an additional US$130 million to the three countries to fight Ebola.

"We are also working on mechanisms to allow us to move rapidly to provide more debt relief to these countries -- which would free up more resources that could be used for health-care spending," he said.

Katherine Moriarty is a consultant and freelance writer, based in Vancouver. She has 10 years of experience in the intersecting fields of public health and community development, with a focus on bloodborne virus policy and programming.

Copyright © 2015 Remedy Health Media, LLC. All rights reserved.

This article was provided by TheBodyPRO.

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