How UK aid promotes healthcare for the few

By Mike Phipps

The UK government has used half a billion pounds of aid money to fund unaffordable private healthcare services in the global south, according to a new report by Global Justice Now (GJN). Healthcare for all? How UK aid undermines universal public healthcare reveals how the UK development bank, CDC Group, invested £420 million in private healthcare ventures over the past decade.

Worse, many of these investments were in highly questionable projects. These include:

  • The now defunct Abraaj Growth Markets Health Fund, whose former CEO is facing fraud and corruption charges for his involvement in the “biggest collapse in private-equity history”;
  • The Nairobi Women’s Hospital in Kenya, unaffordable to many Kenyans,  now facing allegations of overcharging patients, with staff claiming the hospital “resembled a trading floor”;
  • Hospitals in Bangladesh and Pakistan accused of overcharging patients throughout the Covid-19 pandemic, including Evercare Dhaka and Evercare Lahore which lists its price for a hospital room with a ventilator at over four times the average monthly wage;
  • Investments with no apparent development impact, including a “premium and budget” fitness club chain in Brazil.

Far from being an aberration, these investments “fit into the UK’s wider development strategy which, in recent years, has prioritised supporting private, for-profit businesses over services which reach the world’s most marginalised communities,” reports the pressure group.

“The past decade has seen the UK government’s international development strategy steadily repurposed under a private sector, ‘market knows best’ approach’,” note GJN. “The current government has gone one step further, with UK aid policy now driven by a belief in ‘mutual prosperity’ – the idea that development funds should not just be spent to reduce poverty in recipient countries (despite this being the actual legal definition of Official Development Assistance as defined in the 2002 Development Act) but that it should also ‘generate economic and commercial benefits both for recipient countries and for the UK’.”

To this end, the government has given £79 million in aid to a programme designed to increase UK health exports. Instead of tackling poverty, it is redirecting aid to support its own interests and promote privatisation.

The CDC group plays a central role in this strategy. Its investments in private health have undermined public provision, drawing vitally needed health workers away from public hospitals, which often cost a fraction of the sum it costs to build and run for-profit facilities. Yet the private sector, unaffordable to most citizens, still benefits in many cases from public subsidy.

As with other so-called ‘aid’ projects, lack of transparency is a major concern. Labour Hub has previously reported on how the government’s shadowy development bank , CDC, which dispenses £6 billion of the UK aid budget, invests heavily in unaccountable private equity funds around the world, giving money to projects with dubious development impact to make a high rate of return. These investments include private school chains and fossil fuel projects.

We reported: “The basis of these investments is not what is best for the world’s poorest, but what will ensure a high rate or profit for UK financial middlemen. Of the companies and private equity funds in which CDC owns more than 20%, two-thirds are based in tax havens. CDC is making nearly three times more profit on its investments than it is supposed to and in 2018 the average salary at CDC was £104,150 a year, with 48 employees earning more than the UK prime minister.”

Labour’s 2019 Manifesto pledged to “undertake a root-and-branch reform of CDC, transforming it into a green development bank mandated to fight poverty, inequality and climate change.”

The GJN report makes the following recommendations:

“1. The UK government should commit to ensuring that all UK aid supports strong public health systems and is not used to invest in private healthcare companies or promote Public-Private Partnerships.

2. CDC should stop investing in private healthcare and should review all of its existing private healthcare investments to devise an exit strategy that protects jobs. Until this happens, CDC should not receive the additional £779 million capital injection it is due to receive from government between April and June 2021.

3. The UK should exclude public health services from all trade and investment deals, not only protecting our own NHS, but also allowing developing countries the policy space to build their own public, universal systems.

4. The UK should advocate for a new international approach to public health financing based around:

a. stronger co-ordinated international action on tax avoidance.

b. debt cancellation for global south countries, including bilateral, multilateral and private sector debts.

c. developing models for a global wealth tax to redistribute wealth and ensure that governments in the global south have the revenues they need to finance strong public health systems.”

Take action: Sign the petition against the hijacking of the aid budget.

Mike Phipps is editor of the Iraq Occupation Focus e-newsletter, available at https://lists.riseup.net/www/info/iraqfocus. His book For the Many: Preparing Labour for Power was published by OR Books in 2018.

Image: Medical staff examine a child for signs of malnourishment in DRC. Author: DFID – UK Department for International Development, licensed under the Creative Commons Attribution-Share Alike 2.0 Generic license.

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