Social services


World Bank’s privatisation approach to social services fails to deliver

5 April 2011

While the World Bank is developing a new social protection and labour strategy, its general approach to health (see Update 71, 65) and continuing push for privatisation of public services have come under fire again (see Update 66).

Ghana’s national health insurance scheme, presented by the Bank as a success model for developing countries is “unfair, inefficient and un-transparent”, according to a report published in March by Ghanaian NGOs ISODEC, Alliances for Reproductive Health, and Essential Services Platform, with support from Oxfam International. It revealed that Ghana’s National Health Insurance Scheme (NHIS) – which has received technical assistance from the Bank – could be benefitting only 18 per cent of the country’s total population, despite the fact that every Ghanaian citizen pays for it through value-added tax (VAT).

This figure is less than a third of the 62 per cent coverage rate estimated by the government and the Bank. According to Ghanaian activist Patrick Apoya, one of the report’s authors, the official number was inflated by expired subscriptions. Oxfam’s health policy advisor and co-author of the report, Anna Marriott, said: “The World Bank should check its facts on Ghana. This inaccurate information should not be used to sell what is actually an unfair and inefficient system of paying for healthcare to other developing countries such as Uganda, Zambia and Nepal”.

Apoya stressed that the report’s main message is that achieving universal healthcare in Ghana is not possible through the NHIS: “the only way out is to strike away annual subscription fees and allow people to enjoy the service for their entire lives once they join. [I]n technical terms, this ceases to be insurance. It actually becomes a publicly funded health system for all.”

The report argues that “cost-savings, progressive taxation and good quality aid” would allow the government to increase health spending by 200 per cent by 2015. In a blog published by UK newspaper the Guardian, the Bank’s country director for Ghana, Ishac Diwan, is quoted denying that the Bank was touting Ghana as an example for other developing countries, but stressed the importance of including private sector solutions in health systems.

Push for private education

Despite fierce criticism of its push for privatisation of public services in developing countries (see Update 71, 66, 62), the Bank has also insisted on promoting a greater private sector role in education in its new 10 year strategy for the sector. As the draft strategy was submitted to the board for final approval in March, the Bank’s arms-length watchdog – the Independent Evaluation Group (IEG) – published a review of the institution’s education lending portfolio from 2001 through 2010. It found that the performance of existing education sector projects in the satisfactory range had dropped from 82 to 69 per cent over the past decade, while only about one third of recently closed projects with “learning outcome objectives” substantially achieved them.

The IEG review notes that the Bank’s new education strategy’s focus on ‘learning for all’ “does not ensure that the poor will be targeted or will be the first to benefit”. The Bank’s management response to the IEG review argued that portfolio performance has recently improved and that “the new education strategy’s strategic priorities have been designed to help improve learning outcomes.”

New social protection and labour strategy

External consultations are underway on the Bank’s concept note for a new 10 year social protection and labour strategy (see Update 74), which focuses on low-income and fragile states, building social protection systems, promoting opportunities and livelihoods, and strengthening knowledge.

At a London meeting in March, civil society groups raised a number of issues, including insufficient attention to gender, the absence of the argument for social protection as a human right and the failure to acknowledge other work already done on the topic, especially by the International Labour Organisation. In a response to the concept note, the International Trade Union Confederation noted that it “could have gone further in revisiting the Bank’s priorities, which … most often worked with the principal objective of reducing the state’s role and responsibilities in the provision of social protection.” Among other recommendations, the ITUC said that the new strategy “should not give preference to private sector participation in … social protection programmes” and should have as a priority the “extension of coverage, by formalising informal-economy workers and other measures”.