Select Committee on International Development Written Evidence


Memorandum submitted by Crown Agents


  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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