Phasing out User Fees
Weissman, Robert, Multinational Monitor
THE U.S. CONGRESS in October made it official policy for the United States to oppose the inclusion of user fees for primary healthcare and education in International Monetary Fund (IMF) and World Bank loans and projects.
Immediately thereafter, the World Bank indicated that it was moving to abandon user fees.
User fees -- charges for services that are also known as community financing, cost sharing or cost recovery -- are often one part of the structural adjustment policy package, the set of marketoriented policy conditions attached to many loans from the IMF and World Bank. They are among the most heavily criticized of structural adjustment policies.
The foreign operations appropriations bill included language that requires the U.S. Treasury Secretary to instruct the U.S. executive director (country representatives) to the IMF and World Bank "to oppose any loan of these institutions that would require user fees or service charges on poor people for primary education or primary healthcare, including prevention and treatment efforts for HIV/AIDS, malaria, tuberculosis, and infant, child, and maternal well-being, in connection with the institutions' lending programs."
"This is the first step toward eliminating one of the most destructive components of the austerity programs the IMF and World Bank impose on most of the countries of Africa, Asia, and Latin America," said Njoki Njehu, director of the 50 Years Is Enough Network." To deny the most basic services to the world's most impoverished is what I would call sado-monetarism: submitting the very lives of the people of Africa (and elsewhere) to the whims of the market. Today the U.S. Congress has put these institutions on notice: the world knows what they are doing to the impoverished people of the world, and we will not stand for it any longer."
Fifty Years Is Enough was a member of a coalition of Washington, D.C.-based organizations that spearheaded the effort for adoption of the user fee language. Other coalition partners included Results, the Center for Economic and Policy Research, the Quixote Center and Essential Action, a project of Essential Information, the publisher of Multinational Monitor.
The same day the foreign operations appropriations bill passed, a World Bank representative said the Bank would move away from user fees.
"The bank has learned that barriers to access for health and education must be eliminated," Eduardo Doryan, a World Bank vice president, told Bloomberg News. "We are moving in the direction" of eliminating the imposition of fees for basic services from all lending programs, he said.
In July, the U.S. House of Representatives passed an appropriations amendment, initially introduced by Representative Jesse Jackson, Jr., that would have stopped future funding for the IMF and the World Bank if the two lending agencies failed to stop imposing user fees for basic healthcare and education services.
The Treasury Department, anxious to avoid any appropriations limitations for its dealings with the IMF and World Bank, worked to block inclusion of the amendment in the final foreign operations appropriations bill.
A growing U.S. coalition which eventually included the AFL-CIO and more than 100 non-governmental organizations, including Jubilee 2000/USA, Friends of the Earth, Global Exchange and the Presbyterian Church USA, urged that strong user fee language be preserved.
"The evidence from the countries of Africa, Latin America and Asia demonstrates that these fees have had a catastrophic impact on the capacity of the world's most impoverished people to obtain health care and send their children, especially girls, to school," wrote more than 100 organizations in an October letter to U.S. Treasury Secretary Lawrence Summers. "We strongly believe that moves to eliminate these fees are needed to realize the promise of debt relief: to relieve the heavy burdens on the world's poor and increase their access to education and health services.
Representative Nancy Pelosi, D-California, the ranking Democrat on the foreign operations subcommittee of the House Appropriations Committee, negotiated for inclusion of the final language.
The user fee critics argued that evidence accumulated from around the world over the last decade shows that: user fees for education lower school attendance rates, especially among young girls; user fees for primary health services deny access to care and preventative treatment for the poor, leading to the spread of unnecessary and preventable death and disease; and user fee "exemptions" for the poor, or sliding payment scales, routinely fail due to administrative problems, corruption, inadequate notice to the poor or other difficulties.
Among the examples they highlighted:
* In Gambia, in primary health care program villages with insecticide provided free of charge, bednet impregnation -- for malaria prevention -- was five times higher than in villages where charges were introduced. Households consistently cited lack of money as the main reason they chose not to dip bednets.
* Introduction of a 33 cent fee for visits to Kenyan outpatient health centers led to a 52 percent reduction in outpatient visits. After the fee was suspended, visits rose 41 percent. In Papua New Guinea, the introduction of user fees led to a 30 percent decline in outpatient visits. Studies in Niger have found that user fees extend the period that patients wait before seeking outpatient care.
* UNICEF reports that in Malawi, the elimination of modest school fees and uniform requirements in 1994 caused primary enrollment to increase by about 50 percent virtually overnight -- from 1.9 million to 2.9 million. The main beneficiaries were girls. Malawi has been able to maintain near full enrollment since that time.
* In India, reports Dr. Vineeta Gupta, general secretary of Insaaf International, a Punjab, India-based organization, a World Bank-inspired system which is supposed to exclude the poor from healthcare charges fails in practice due to corruption and administrative difficulties, denying the poorest Indians access to healthcare services.
The purported logic of education and healthcare user fees is that payments from children's families and sick people will enable government service agencies to provide services to more people.
But user fee critics insisted that access to primary education and healthcare is a right that should not be conditioned on ability to pay, and that the real-world effect of user fees has been service denial, not expansion.
As Multinational Monitor went to press, the coalition against user fees was acting to ensure the U.S. executive directors to the IMF and World Bank would follow the law.
In late November and early December, the IME and World Bank boards were taking up consideration of the Poverty Reduction Strategy Paper (PRSP) of Tanzania. PRSPs are an integral part of the IMF and World Bank's revised procedures for lending -- they are supposed to reflect the outcome of highly participatory civil society debates and to provide a framework for ensuring new loans help reduce poverty, though critics argue they are window dressing and fail on both counts.
Tanzania's interim PRSP sought to impose user fees in the form of "cost-sharing to dispensaries and health centers."
Operating on brief notice, 17 Members of Congress, the AFL-CIO, and dozens of the U.S. non-governmental organizations sent letters reminding Secretary Summers of the mandatory opposition to any IMF/Bank programs that included such user fees.
The World Bank rushed to assure concerned groups that the PRSP did not include user fees, though the PRSP itself had not been made public at the press time, and though IMF/Bank programs in Tanzania promote user fees irrespective of what appears in the PRSP.…
Questia, a part of Gale, Cengage Learning. www.questia.com
Publication information: Article title: Phasing out User Fees. Contributors: Weissman, Robert - Author. Magazine title: Multinational Monitor. Volume: 21. Issue: 12 Publication date: December 2000. Page number: 6. © 1999 Essential Information, Inc. COPYRIGHT 2000 Gale Group.
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