APPENDIX 2
Memorandum submitted by Crown Agents
INTRODUCTION
Crown Agents has been active in delivering services
to public health sector organisations in the developing world
for many years, financed by both donor funding and partner governments'
own resources. As such many of the projects to which we have contributed
in recent years have been in the reproductive health sub-sector
and directed at HIV/AIDS prevention in particular. We are also
beginning to notice the impact of HIV/AIDS on counterpart departments
in partner governments in projects of all types. It is this experience
on which we draw for these remarks to the Committee.
We will not repeat published information and
analysis from academics and NGOs as we assume this information
will already be available to the Committee. We would refer specifically
to the UNAIDS Epidemic update of December 1999 and the recent
World Bank report on Africa.
1. The impact of HIV/AIDS on developing countries
The impact of HIV and more importantly the effect
of the onset of full-blown AIDS or the increased incidence of
opportunistic infection due to reduced immunity is well covered
in many recent reports in the print and on the Internet from UK,
USA and the rest of Europe. In particular we would mention the
fact that 95 per cent of the 34 million people affected live in
developing countries that there were nearly six million new cases
and 2.6 million deaths in 1999 (out of 16 million total so far)
should be at the top of the development agenda.
There are equally widely published statistics
on the reduction in the quality of life in many countries causing
not only increased human suffering but a dramatically negative
economic impact on national growth with huge losses in skilled
workers, reduced productivity and eventual depletion of the national
skills base. Equally relevant is the huge pressure placed on the
key health and social sectors in developing countries, where resources
are already stretched.
For a view from the developing world we would
recommend to the Committee the recently published revised draft
by the Government of Kenya of their Interim Poverty Reduction
Strategy Paper 2000-03 sections 9.8 to 9.12.
For our own part we have experienced reductions
in staff resources in a counterpart government department in excess
of 50 per cent in less than 12 months in one central southern
African country, and between 25 and 50 per cent in other countries.
It still depends on the willingness of the partner government
to admit the scale of the problem as to whether the cause of staff
losses and resources is faced up to by the senior management.
It is very noticeable that governments are finding it harder than
ever to fill vacancies with trained staff. This will be exacerbated
by the reduction in the life expectancy figures from 59 over the
last few years to 45 within five to 10 years.
Without doubt the impact of absences to attend
funerals is affecting all businesses and government departments.
Interestingly, there is much less reluctance to discuss the need
for employees to be absent for funerals than there is to discuss
the loss of employees. Because these absences frequently require
journeys back to the home village the impact on organisations
in capitals and other major employment centres is significant
as it usually means an absence of a week or more on each occasion.
There is an effect on direct cash costs affecting companies, direct
health expenditure increasing, additional overtime costs as well
as direct production losses. Larger private sector businesses
are beginning to factor in the losses and absences to their staff
resource planning, but this is a "luxury" not generally
available to the public sector. The impact for business is, of
course, to create another competitive disadvantage against global
players from the developed world. The World Bank has estimated
that high HIV rate countries lose 1 per cent of GDP growth each
year.
Another problem is, of course, the dramatically
increased costs of treating HIV/AIDS and related diseases. By
2005 the health sector costs to treat such conditions are expected
to account for more than a third of all government health spending
on Ethiopia, more than half in Kenya and nearly two thirds in
Zimbabwe. This has an enormous impact on the amount of resource
remaining for the rest of the health sector.
HIV/AIDS does not of itself fundamentally affect
such rights as the right to education, health and the opportunity
to work and not to live in poverty, but it clearly magnifies the
scale of the problem. In addition to the factors we have already
mentioned we would add that in many countries the National Blood
Service is unable to safely screen blood, therefore patients'
rights to life are being infringed by the potential use of infected
blood in treatment. The increased incidence of opportunistic infections
is also exacerbating what in many countries is already a poor
situation in the availability and distribution of essential drugs
and increasing the drugs bill against already deficient economies.
2. The response to the effects of HIV/AIDS
on developing countries
(a) The most important comment on the required
response is that HIV/AIDS is no longer simply a health issue,
the impact of which is being felt throughout the society and economy
in sub-Saharan Africa. As such it is increasingly necessary that
all development aid programmes or projects consider the impact
of AIDS and includes specific measures to counter the effects.
In common with the major businesses, as mentioned in section 1,
programmes and projects need to be designed on the basis of a
progressively increasing wastage factor. This will impact on the
level and scope of training and capacity building built into programmes.
It may even be the case that in severe circumstances interim management
or staffing has to be brought in from outside and this must lead
to changes in government policy. As an example of the need to
incorporate HIV/AIDS in non-health projects, since the elections
last year it is noticeable that in South Africa the effect of
AIDS and measures that should be considered has been mentioned
in every meeting we have had with both national and provincial
government officials.
(b) The private sector has a responsibility
to its stakeholders (ie shareholders, employees etc) to take a
greater role in disseminating the message about HIV prevention.
This can be through worker education programmes, free availability
of male and female condoms (after education in their use) availability
of HIV tests (from an independent body) and making advice and
counselling available (probably also from an independent body
to ensure confidentiality). Most employers will not have the in-house
skills for these difficult and sensitive tasks; there is therefore
a role for NGOs or health advice centres to assist the private
sector. We would recommend that the UK and other donors should
consider the role of the donors to provide initial funding for
such programmes on a training of trainers, or training of counsellors,
basis. Such an intervention should not be high cost, but would
have the potential for a high impact.
(c) As mentioned above it does not yet appear
to us that the donor community has absorbed into its project planning
and design the fact that HIV/AIDS is more than a problem for the
health sector alone. In the same way that some projects are required
to examine the impact of the project on the environment, we recommend
that all new programmes and projects must include a section on
the measures to be taken to counter the impact of HIV/AIDS that
will reduce the ability of the partner government to achieve the
project objectives and outputs. From our recent experience it
is our view that all projects will be adversely affected and ultimately
fail for loss of an effective champion and measures need to be
included in all cases. A new series of training/awareness courses
that donors could consider to consist public and private sector
managers is the equivalent of our long-standing Finance for Non-Finance
Managers, ie the Impact of HIV/AIDS for Non-Health Managers. In
addition the training of existing managers at all levels should
be expanded. Donors should also pay increased attention to the
problem partner governments have in managing the consistent procurement,
stockholding and distribution of essential drugs and contraceptives.
In addition to the problem of lack of training or capacity to
manage the logistics and supply chain to predict need, partners
governments are often severely restricted by the lack of consistent
or predictable funding to purchase these commodities. This leads
to dangerous stock-outs, and higher prices for emergency purchases,
while it can also create artificial bottlenecks that foster corrupt
practices.
Another important response is the greater use
of international forums to highlight the crucial importance of
the issues of HIV/AIDS and their impact on human development.
The identification and establishment of partnerships with international
and developing country (African) private sector organisations
to intensify efforts is vital. Otherwise there must be real concern
of a doomsday scenario with governments and private sector relationships
affected by this phenomenon. When coupled with inefficient and
corrupt bureaucracy it could lead to the private sector not being
able to attract or retain production workers/skilled technical
and management staff because they have either been affected themselves
or have migrated to non/less affected or more efficient areas/regions.
P F Berry CMG
Executive Chairman
Crown Agents
May 2000
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