An innovative financing programme, made possible by a unique public-private partnership, is helping to complete the goal of global polio eradication. Launched in April 2003, the Investment Partnership for Polio, administered by the World Bank, using its own funds and early matching contributions by Rotary International, the Bill and Melinda Gates Foundation and the United Nations Foundation, has now committed approximately $49 million to polio eradication in Pakistan and Nigeria, two of the remaining six countries where polio is endemic.
Not only are both countries struggling to complete the interruption of the wild polio virus by the end of 2004, but both have severe limitations on what they can spend on this and other serious health problems.
How does the new instrument work?
The new instrument essentially converts the traditional World Bank International Development Assistance (IDA) loans into grants. These are known as ‘buy downs’ because the private sector funds from Gates, Rotary, and the UN Foundation buy down the interest – that is, they pay up front to the Investment Partnership what the countries would otherwise pay in interest on the loans. The amount is worked out according to a formula calculated by the Bank as to the current and likely interest rates that will be in effect for the duration of the loan.
The net effect of this arrangement is to at least double the amount of funds available for polio eradication in those countries. Specifically, $23 million in private funds were used to buy the equivalent of $49 million in public loans, enabling these funds to be released as a grant with no further financial obligation on the country needing the funds, and in effect more than doubling the ‘social return’ for the private donors.
Efforts at global eradication to date
Poliomyelitis has been reduced by an astounding 99 per cent since the World Health Assembly adopted the goal of global eradication in 1988. Urged to do so by Rotary International, which had begun its own global effort in 1985, the Assembly agreed to take on the challenge and organized a formal international partnership, the Global Polio Partnership, to carry out the mission. Since then, beginning with the major and continuing contributions of national governments, other organizations, including the Gates Foundation, the UN Foundation and others, have offered strong support. Rotary has raised over $500 million since the beginning, largely from its own members. It also sends thousands of volunteers into the field to join the national and international health workers who carry out immunization campaigns.
The results demonstrate the effectiveness of cooperation between these agencies and national health ministries: since the global eradication effort began in 1988, over 15 billion doses of oral polio vaccine have been given to over 2 billion children in 122 countries. It is also estimated that over 1 million deaths have been averted because of the immunizations given in combination with vitamin A.
Developing the Investment Partnership
Besides working with the other institutions to bring the Investment Partnership into being, the UN Foundation has recently brought in another partner, Centers for Disease Control and Prevention, one of the two US government agencies (the other being USAID) that supports the Global Polio Partnership. The Investment Partnership has thus grown to include national as well as international public institutions and private sector organizations.
The Investment Partnership for Polio’s trust fund has now grown to over $70 million. This includes funds for a second ‘buy down’ for both Pakistan and Nigeria, where, despite overall progress, there have been some recent setbacks, as there have been in India, too. The further ‘buy downs’ for these two countries have been made possible by the fact that India – determined to be in the category of nations contributing to international assistance rather than accepting it – decided not to accept a buy down in 2003, opting instead to extend an existing loan for some $90 million for its future polio eradication efforts and pay the interest.
The only precedent for the polio buy-down instrument was a one-off buy-down IBRD loan made to China last year, as part of the Bank’s ongoing assistance, through loans, for China’s tuberculosis treatment and prevention efforts. The ‘interest’ in this case was reduced (but not totally covered) by the UK’s Department for International Development. Apart from that, this is the first time the World Bank has used the ‘buy-down’ instrument, and its combination of public and private funds for this kind of intervention is unique. The results are clear to see.
1 This consisted of the World Health Organization, the United Nations Children’s Fund (UNICEF), the US Centers for Disease Control and Prevention (CDC), and Rotary International.
2 The latest problem is in Nigeria, where cessation of immunization efforts eight months ago in the northern part of the country, based in part on fears of the local population about the safety of the vaccine, caused a stunning reversal of earlier progress. Even more troubling, the virus has spread from Nigeria to seven previously polio-free countries.
3 The Bank’s statement on this reads: ‘This project also initiates an innovative mechanism to blend a $37 million UK/DFID grant with a $104 million IBRD loan to reduce the cost of financing social sector activities in China.’