A healthy population is both a cause and a result of economic growth and development. But achieving both today requires finance ministers to leave their comfort zones.
We should know. As former finance ministers, we believe that macroeconomic policies now require far greater engagement with line ministries. In particular, ministers need to be better able to assess the potential economic effects of public-health risks, introduce taxes that improve health outcomes and adopt budgetary and regulatory decisions that look beyond short-term public-finance considerations. Failure to do so will mean being unprepared for the next health and economic crisis.
The devastating economic consequences of the Covid-19 pandemic have shown why ministers must anticipate their responses to global health risks. The pandemic is forecast to kill more than 15 million people and cost the global economy more than US$12 trillion (439 trillion baht) in forgone GDP by 2024. Lockdowns that would have been unimaginable only a few years ago have resulted in more than 1.5 billion students being affected by school closures, implying severe long-term consequences for a generation of young people.
The economic impact of today's systemic health crises may be so large that ministers can no longer assume that national and global health policy is the exclusive domain of health-sector professionals. Instead, ministers need to engage more with leaders to strengthen their countries' resilience in any future crisis.
In many countries, the finance minister has until now set only the overall budgets of line ministries with responsibility for health, leaving implementation to the relevant departments. These narrow conceptions of their respective roles have led to suboptimal health and economic outcomes.
Ministers therefore need to become more directly involved in decision-making in key areas affecting public health and economic performance that have health implications in areas such as sanitation, nutrition, clean energy, girls' education and school meal programmes.
In the past decade, South Africa provided free and tax-free sanitary pads for schoolgirls and Mexico eliminated sugar in milk in daycare centres. As these examples show, the finance-health relationship marks the rhythm, but contributions from other sectors are needed to complete the symphony.
Moreover, value for money should be at the centre of public financing of health care. Increased efficiency needs to go hand in hand with greater equity. The discussion must move beyond short-term budgets to joint oversight of the health system's overall efficacy through better procurement, improved financial management, and accountability mechanisms to help ensure that healthcare funds achieve specific outcomes sustainably and equitably.
For example, Colombia adopted price controls in its health sector based on data from global markets. Mexico consolidated public-sector medicine purchases and automatically authorised medicines already approved by US, European and Japanese regulators.
Financial concerns aside, formulating the right public policies and regulations is vital to promoting better public health. Here, ministers can introduce taxes on unhealthy products; increase research and development spending on health; strengthen competition regulations to hold down pharmaceutical and medical equipment prices; ensure robust rules for public and private health insurers; and contain households' direct out-of-pocket expenditures.
To this end, South Africa, Nigeria, Mexico and Gabon introduced taxes on sugar-sweetened beverages; Argentina and Colombia hiked tobacco taxes; and Gabon imposed an excise tax on cigarettes.
Lastly, the Covid-19 pandemic has demonstrated that global health problems cannot be resolved at the national level alone. Reimagining the health-economy dialogue must include rethinking the governance and performance of international financial and health institutions and bolstering their cooperation.
Moreover, these organisations should include health-crisis prevention and response capacity in their macroeconomic risk assessments.
Current global crises demand that health and economic policymakers reinvent and strengthen their collaboration at the national and international levels. By playing a central role in this process, finance ministers can contribute to making a world that is better able to withstand future health-related economic threats. ©2022 Project Syndicate
Kemi Adeosun is a former minister of finance of Nigeria. José Antonio González Anaya is a former minister of finance of Mexico. Trevor Manuel is a former minister of finance of South Africa.
