Financial
Innovation Will Buy Polio Vaccine To Help
Eradicate Polio Worldwide
Rising number of global cases increases
pressure to eradicate
polio — international community
challenged to fill funding gap
(WASHINGTON,
April 29, 2003) An innovative financing
program to help eradicate polio (poliomyelitis)
worldwide by 2005 was launched today when
the World Bank approved a US$28 million
no-interest loan for the purchase of oral
polio vaccine (OPV) in Nigeria, Africa's
most polio endemic country. The World
Bank, the Bill & Melinda Gates Foundation,
Rotary International, and the United Nations
Foundation, which together comprise the
Investment Partnership for Polio,
said they would move swiftly over the
coming months to fund the immunization
of children in other polio endemic countries.
A US$20 million loan for eradicating polio
in Pakistan is scheduled to be approved
in mid-May.
The
loans will be funded through the International
Development Association (IDA)-the World
Bank's soft-loan arm for the poorest countries.
In a new approach to development aid,
the partnership will "buy down" a country's
IDA loans upon successful completion of
that country's polio eradication program.
Because of the generous loan terms, each
grant dollar unlocks US$2.50-3.00 for
affected countries to fight polio. To
fund the buy-downs, the partnership has
established a trust fund with US$25 million
from the Gates Foundation and $25 million
from Rotary International/UN Foundation.
This US$50 million investment will buy
down US$120-140 million in World Bank
IDA loans. In this way, developing countries
can mobilize what ultimately becomes grant
funding to eradicate polio, and thus contribute
beyond their national borders to the global
campaign to eliminate polio transmission
worldwide.
This
innovative financing mechanism comes at
a critical time for global efforts to
eradicate polio. While The Investment
Partnership for Polio brings large amounts
of welcome new money to eradicate polio,
the global initiative is still short roughly
US$275 million, a gap which threatens
immunization campaigns and surveillance
activities in the period 2003 to 2005.
Consequently
the Partnership is calling on the wider
international community to meet the funding
gap, and therefore help to deliver a polio-free
world by 2005.
"This
financial initiative shows the power of
civil society to help produce solutions
to pressing global problems such as polio,
and is an exciting mechanism to unite
the World Bank and public and private
partners in a common cause," says World
Bank President, James. D. Wolfensohn.
"The partnership to buy-down loans to
grants on the basis of good performance
is an example of the innovative thinking
occurring in the private sector and the
World Bank about how to increase finances
for the fight against global diseases.
This financial innovation is bringing
the goal of a polio-free world one large
step closer to becoming reality."
IDA
provides very long-term, zero-interest
loans which are highly concessional, including
for health projects. But these IDA loans
must cover a whole range of a poor country's
pressing development needs-of which polio
immunization may be just one. Since eradication
of polio from the remaining endemic countries
is so important for the world as a whole,
it makes sense to ensure that this "global
public good" is recognized in the financing
provided to countries undertaking this
final eradication effort. The buy-down
mechanism therefore allows governments
to borrow on concessional terms from the
World Bank to address specific development
problems and see these loans turn into
grants upon successful achievement of
results.
This
builds on the long-term commitment of
the polio partners. Since 1985, Rotary
International's main philanthropic goal
has been the fight against polio. To date,
the humanitarian service organization
has committed over US$500 million and
countless volunteer hours to immunize
more than 2 billion children in 122 countries.
In addition, Rotary is in the midst of
a major drive to raise another US$80 million
by June 2003.
"This
innovative investment partnership is vital
to fighting polio in the remaining endemic
countries," said Jonathan Majiyagbe, President-elect
of Rotary International. "In my homeland
of Nigeria, 201 children were infected
by this disease last year, alone. No child
today should ever have to suffer from
this crippling disease, as an effective
vaccine has made polio totally preventable.
We must all continue our efforts to ensure
that every child is vaccinated, and protect
our investment in a polio-free world by
2005."
Polio
gone by 2005 with greater investment
The
poliovirus invades the nervous system
through the mouth, and can cause total
paralysis in a matter of hours. One in
200 infections leads to irreversible paralysis
(usually in the legs). Amongst those paralyzed,
5-10 percent die when their breathing
muscles become immobilized.
In
1988, polio was endemic in more than 125
countries, paralyzing over 350,000 children
every year. In 2002, polio was endemic
in only seven countries, and 1,919 global
cases were reported (as of April 2003).
However, in January 2003, a child was
paralyzed by polio in Lebanon, the first
case seen in that country in nearly 10
years. Genetic sequencing of the virus
confirmed it to be an importation from
India. Such risks will remain unless polio
is eradicated everywhere.
The
worldwide eradication campaign is now
in its final stages. Once it is successful,
polio would be only the second disease
ever to be eradicated. Last year, more
than 500 million children under five years
of age were vaccinated in 100 countries
as part of the global campaign against
polio. However, achieving the objective
is severely threatened by the remaining
funding shortfall.
"With
polio eradication within reach, it's critical
to increase funding now to ensure that
we finish the job we've started," said
Patty Stonesifer, Co-Chair and President
of the Bill & Melinda Gates Foundation.
"Eliminating polio will help not just
those countries facing the disease, but
also the entire world, which will never
again have to fear a polio resurgence."
The
remaining polio-endemic countries include
India, Nigeria, Pakistan, Egypt, Somalia,
Afghanistan, and Niger. The World Bank
will be working closely with partners
such as the WHO, the U.S. Centers for
Disease Control, UNICEF, Rotary International,
and others to prepare and carry out the
immunization programs at the local level
in these countries.
Beyond
polio — initiative could cover other
diseases
According
to Timothy Wirth, the President of the
UN Foundation - founded by Ted Turner
to support the UN and its agencies - the
Investment Partnership for Polio could
well be a model for pioneering new work
in global public health going forward:
"The new World Bank plan to support polio
eradication proves that large institutions
can be very innovative in promoting global
public goods. The private sector partners
in the plan are also demonstrating unusual
flexibility as well as typical generosity.
I believe this new mechanism which the
Bank has created will be valuable in many
spheres for years to come. I hope the
unique partnership represented here in
the World Bank plan-like the WHO- UNICEF-
CDC-Rotary partnership carrying out the
polio eradication initiative on the ground-will
be a model for many others," he said.
The
major communicable diseases (AIDS, malaria,
tuberculosis, and childhood communicable
diseases (measles, and acute respiratory
and diarrhoeal diseases) disproportionately
affect poor countries and, within poor
countries, the poorest families. Communicable
diseases are the main cause of death among
children worldwide and account for almost
80 percent of the mortality gap between
rich and poor countries.
However
many developing countries under-invest
in communicable disease control because
they do not take into account the cross-border
or global benefits and costs of their
actions. The under-investment has tremendous
costs to the region and the world. For
example, efforts to control HIV/AIDS in
Sub-Saharan African countries is compromised
when neighboring countries do not invest
in effective strategies. Similarly, poorly-implemented
plans to control tuberculosis within several
countries has resulted in antibiotic resistant
strains of TB being spread around the
world. Controlling these diseases requires
large, cross-border solutions, with cooperation
and financial backing from the regional
or global community.
Some
national governments would invest more
in the control of communicable diseases
if there were added incentives such as
cheaper access to money. As a result,
IDA buy-downs will not only ensure critical
funding reaches governments striving to
eradicate polio, but may become an important
tool to support investments in other global
health priorities as well. In the coming
months, the World Bank, the Bill &
Melinda Gates Foundation and other innovative
development partners will explore how
best to expand use of these performance-oriented
IDA buy-downs.
Media
Contacts
World
Bank
Phil Hay
(202) 473-1796- office
(202) 409-2909 - cell Phay@worldbank.org
For
more information on the Bank's work
in the area of communicable diseases,
visit: http://www1.worldbank.org/hnp then click on "communicable diseases"
FAQ
on the Investment Partnership for Polio
Q:
What is polio?
• Polio mainly affects children under
five years of age by invading the nervous
system through the mouth, and can cause
total paralysis in a matter of hours.
One in 200 infections leads to irreversible
paralysis (usually in the legs). Amongst
those paralyzed, 5%-10% die when their
breathing muscles become immobilized.
Q:
How many polio infections are in the world
today?
• Widespread use of polio vaccine
reduced the number of reported cases to
just 483 globally in 2001, compared with
350,000 in 1988.
• However, cases have risen to 1,919
in 2002, illustrating the need for continued
vaccinations to prevent another polio
outbreak.
Q:
Is eradication really possible?
• Polio has now been eliminated from
all but seven countries, thanks to the
efforts of many organizations, often led
by Rotary International. The World Health
Organization has evaluated progress toward
eradication and judged eradication possible
by 2005, if sufficient resources are made
available by donors and affected countries.
• A similar disease eradication effort,
the campaign against smallpox, resulted
in elimination of that disease in 1980.
Q:
What are the global benefits of polio
eradication?
• After 2005, there should be no
new cases of polio. The transmission of
the virus will have ended. An estimated
five million children , who otherwise
could have been paralyzed, will be walking.
• Eradicating polio benefits not
just affected countries, but the entire
world, as it eliminates a major global
public health threat.
• The elimination of polio will remove
a significant financial and human burden
from national disease control programs.
These resources will be re-directed to
fight other diseases.
Q:
How will the Investment Partnership for
Polio help eliminate the disease?
• Because so few polio cases remain,
polio-endemic nations may have been inclined
to direct their limited health resources
toward other diseases. The Partnership
provides targeted resources and incentives
to support continued eradication efforts.
Q:
How does the Partnership work?
• The partnership combines World
Bank and private donor funds to create
a unique system of incentives to encourage
aggressive and effective efforts to eliminate
polio.
• After successful completion of
a polio eradication program supported
by World Bank loans, donor funds will
be used to pay off, or “buy down,”
the balance of the loan. Because of the
generous loan terms, each donor dollar
will result in the affected country receiving
$2.50-3.00 to support polio programs.
Q:
Why do we need a special polio buy-down
mechanisms?
• While countries may be reluctant
to take on World Bank loans to fight polio,
even with generous loan terms, the “buy-down”
program essentially converts those loans
into grants.
• Because the buy-down program is
only triggered when a program is judged
successful, it provides a strong incentive
to countries to ensure that their programs
are implemented effectively and funds
used wisely.
Q:
How does the polio buy-down mechanism
work?
• World Bank loans are provided to
national governments for polio eradication
activities.
• Third party funding provided by
Gates Foundation and Rotary/United Nations
Foundation (UNF) will cover all service
and commitment charges associated with
the loan and will buy-down the loan on
successful completion of the project.
• Gates and Rotary/UNF are providing
a total of $50 million to a World Bank
trust fund to be used for the buy-down
of these polio projects. The third party
funds will enable countries to receive
roughly $130 million, resulting in vaccine
to immunize over 1.1 billion children
over the life of the 2-3 year projects.
• The buy-down of the credit is triggered
at the end of the project by a performance
audit that evaluates the government’s
execution of activities against carefully
defined criteria. Successful performance
triggers a one-time buy-down by the trust
fund of the net present value of the credit
thus canceling it from the country’s
debt.
Q.:
What other initiatives may be eligible
for buy down?
• The Investment Partnership for
Polio is a pilot project for the buy-down
financing mechanism. The Bank and its
partners are currently evaluating other
development activities that would be benefit
from similar initiatives.
Q:
How much IDA money is available for IDA
buy downs?
• This is under consideration and
will depend on the experience with this
pilot, the response of governments and
donors and IDA’s decision on the
acceptable volume of early credit repayments.
Q:
What are the benefits of the buy-down
approach?
• To the country: Upon successful
completion of the projects, their polio
loans are converted to grants, therefore
not adding to their debt burden.
• To the donor: They leverage their
funding so that $1 translates into $2.50-3.00
in development assistance. They also ensure
their investment results in measurable
performance.
• To the World Bank: Additional funding
is attracted to support priority development
activities.
• To All: Creating and strengthening
partnerships – among individuals,
organizations and national governments.
