Health spending, macroeconomics and fiscal space in countries of the World Health Organization South-East Asia Region

Abstract

The paper examines the issues around mobilization of resources for the 11countries of the South-East Asia Region of the World Health Organization (‎WHO)‎,by analysing their macroeconomic situation, health spending, fiscal space andother determinants of health. With the exception of a few, most of these countrieshave made fair progress on their own Millennium Development Goal (‎MDG)‎targets of maternal mortality ratio and mortality rate in children aged under 5 years.However, the achieved targets have been very modest – with the exception ofThailand and Sri Lanka – indicating the continued need for additional efforts toimprove these indicators. The paper discusses the need for investment, by lookingat evidence on economic growth, the availability of fiscal space, and improvementsin “macroeconomic-plus” factors like poverty, female literacy, governance andefficiency of the health sector. The analysis indicates that, overall, the countriesof the WHO South-East Asia Region are collectively in a position to make thetransition from low public spending to moderate or even high health spending,which is required, in turn, for transition from lowcoverage–high out-of-pocketspending (‎OOPS)‎ to highcoverage–low OOPS. However, explicit prioritizationfor health within the overall government budget for low spenders would requirepolitical will and champions who can argue the case of the health sector. Additionalinnovative avenues of raising resources, such as earmarked taxes or a health levycan be considered in countries with good macroeconomic fundamentals. With theexception of Thailand, this is applicable for all the countries of the region. However,countries with adverse macroeconomic-plus factors, as well as inefficient healthsystems, need to be alert to the possibility of overinvesting – and thereby wasting– resources for modest health gains, making the challenge of increasing healthsector spending alongside competing demands for spending on other areas of thesocial sector difficult