Private Sector Roles in Global Public Health

China’s sex ratio at birth (the ratio of males to females) has been rising continuously since the 1980s above the “normal” global sex ratio of 107 boys to 100 girls. In a matter of a decade, China will be “missing” 40-60 million women (the number that would balance the sex ratio). This trend poses a serious concern for the country because of increased male violence, crime (some 80 million low status males are more likely to commit crime[i]), and trafficking of women. While the country’s one-child policy and cultural preference for boys have contributed to this trend, the private sector plays a significant role in increasing the sex ratio imbalance via prenatal sex screening and abortion.[ii]

In 1994, the Chinese government banned the use of ultrasound for prenatal sex screening.[iii] While state-run hospitals generally abide by the law, private backstreet hospitals and rural clinics continue to use cheap and portable ultrasound scanners for prenatal sex screening purposes – a scan can cost as little as $50.[iv] According to Prof. Chu Junhong of the Institute of Population Research at Beijing University, prenatal sex selection was probably the primary if not the only cause of the continuous rise of sex ratio at birth. In one study involving 820 women, nearly half of the reported pregnancies were subject to sex determination by ultrasound examination, and nine out of ten determined female fetuses in second pregnancies were aborted if the couple’s first child was a girl. A Planned Parenthood study showed that over 70% of fetuses aborted in China were female.[v] Female abandonment and infanticide was extremely rare in the county studied; rural families believe in supernatural consequences for infanticide while abortion is not regarded in the same negative light.[vi] Nevertheless, in most counties, the death rate of baby girls is statistically higher than that of baby boys.[vii]

Because private clinics are largely responsible for the ongoing illegal practice of prenatal sex screening, China’s upcoming health care reforms will need to enforce its prenatal sex screening laws more tightly. This poses a challenge because hospitals may have to forego prenatal screening for diseases (some of which are sex-linked).[viii] However, more precise forms of screening that do not reveal sex, such as the recently SFDA approved FISH Probes, which detect for Down’s Syndrome, have emerged (the ethics of prenatal selection based on disease is outside the purview of this post, but is another issue to consider when observing the growth of the private sector in China). Referring to last week’s post on medical licenses, clearer guidelines and harsher violation consequences should be posted to licenses for rural or traditional medicine doctors who are more likely to engage in prenatal sex screenings. Banning abortion is a more extreme means of addressing the sex-ratio problem, but such a policy would be less practical because of women’s health issues and even wider enforcement demands. Both state hospitals and mainstream private hospitals therefore need to establish a larger presence in rural areas, in which such screenings occur, in order more closely monitor health professionals in the area and to crowd out the other services prenatal sex screening professionals provide.

At the beginning of the quarter, I listed three questions I wanted to explore this quarter:

1. How does the private sector define accountability?–are they accountable to specific organizations within the recipient country? to the country itself? to the Board members?

2. How are private sector organizations structured? How does the organization’s structure affect the existence and potential for accountability mechanisms?

3. How do private sector organizations pick which countries and projects to fund?

Throughout the quarter, I ended up investigating the issues at the intersections of donor politics, accountability mechanisms, and goal setting. Every week, I ended up examining these issues through different lenses and redefining the questions I started out with.

I explored the structure of a bilateral and multilateral aid and found that overwhelmingly, decision-making and agenda setting is concentrated at the top echelons of the organizational pyramid. Accountability mechanisms exist but seem to be more in name than real ways for donors to hear back from their recipients on how to improve. Organizations have sprung up to fill this niche; they’ve created surveys and forums for recipients to voice their ideas. Corporations, however, seem to have fewer feedback channels. Overwhelmingly, the conversations surrounding corporate giving revolve around determining whether the grants are increasing the company’s revenue. One might say that revenue is directly proportional to the success of the grant BUT this leaves out a critical component—donations, programs, and partnerships can be successful, but they might not be helping global communities achieve what THEY want to achieve.

This quarter, our speakers have almost all mentioned the importance of community involvement in agenda setting and program development. The lectures we have heard and the blogs and news articles I’ve read suggests that donors are increasingly mentioning “community involvement” as a buzz word on their websites, in their documents, and in their research. Perhaps donors are more motivated to incorporate community interests. I’m not sure that donors are willing to sacrifice their goals for communities; rather, there seems to be an increasing trend towards donors incorporating community needs into their agenda (but not replacing them). There are a number of ethical issues associated with this. On a more practical level though, forming respectful partnerships is difficult. As the world moves forward, we need to be thinking of alternatives to the current donor-driven aid paradigm and rethinking the nature of aid itself.

     It’s clear that something needs to change with the prevailing landscape of how financial services, or the lack thereof, are currently provided to people in developing countries.  The 200 billion dollar shortfall in funding for loans to local entrepreneurs points to the necessity of this.  As has been shown, perhaps the largest challenge to eliminating this shortfall is getting individuals, in both the private and public sectors, to realize the gains that can be made if microfinance is successfully implemented on a large scale.  These gains include not only the material benefits the loans have the potential to bring to recipients and their communities, but also to governments and private investors and industries.  Private entities originating in developed countries usually have the financial means and incentives to actively promote microfinance, but too often they choose to devote their resources elsewhere, to sources with which they are more familiar.  However, there already exist successful models, such as the Ebay affiliated “Microplace,” in the private sector microfinance market off of which new entrants can model themselves.

     Influential, trend-setting countries like the US have an obligation in the name of humanity to step up their support of microfinance and make it clear to private entities that microfinance is not only effective but also profitable, most often for everyone involved.  Lenders get their money back with interest at around a 95% rate and individual entrepreneurs get the opportunity to improve the economic and social health of their local communities while providing a higher standard of living for their families.  Furthermore, women, who form most recipients of microfinance loans, are given the means to prove themselves and in so doing, destroy embedded stereotypes founded on gender based prejudice inherent in many male dominated societies.  All of these benefits have a ripple effect because the economic status of a community and the individuals in it is often closely connected to health and social issues as well.  The previously discussed child health improvements that arise in communities in which many women have received microfinance loans is clear evidence of this.

     The US took a step in the right direction by recently creating the Microfinance Growth Fund to make loans to microfinance institutions that can in turn loan that money out again.  However, the endowment of $100 million that the US government gave to this institution is woefully inadequate given the scope of the problems it must tackle.  If the US wants to promote the health of impoverished people around the world, a desire which it has demonstrated time after time with expensive interventions, and to do so with relatively low costs, then microfinance must become a higher priority for it.  When that happens, perhaps then the private sector will come to widely recognize the benefits microfinance has to offer and begin to practice it more themselves.    

Sources: Please See Previous Blog Posts 

Over the course of the blogs, I intended to determine if public-private partnerships would be a viable option to improve healthcare in the developing countries. I have confirmed that they can and do improve healthcare by increasing access to services in an efficient, equitable, and sustainable manner.

These partnerships increase the total healthcare budget by expanding the private sector healthcare budget and pooling it with the public sector’s budget. Inclusion of the private sector’s budget also makes healthcare provision more sustainable, because it uses its own source of money rather then relying on alternate sources for funding. I have seen that national public-private partnerships can substantially increase coverage of any specific healthcare services as demonstrated in the cases of contraceptives, condoms, and insecticide treated bed nets. I have also determined that global public-private partnerships can improve healthcare in developing countries by filling in the gaps that the public sectors of those developing countries cannot cover as demonstrated by the Global Fund. It’s plain to see that public-private partnerships can play a major role in providing healthcare services.

The next step is to improve the efficiency of the public-private partnerships. At this point in time, in all developing countries, there is a lack of communication between the two sectors and institutional capacity for the public sector to regulate the private sector. Communication problems exist, because the two sectors do not trust each other. The institutional capacity problem is mostly due to a lack of funds. The good news is that these problems can be easily alleviated. The trust issues will resolve and communication will naturally improve as the two sectors work together. With regards to the lack of institutional capacity, outside funding from developed countries and other sources could substantially improve it. Therefore, there is no doubt that public-private partnerships do and will continue to improve healthcare in the developing world.

A concern with these partnerships is that many people think they are the only way of the future. It is true that they are and will be extremely beneficial to the healthcare services, but the system has not been fully studied and established. We should not abandon hope that the public sector’s themselves can be improved to provide better healthcare. That being said, establishing public-private partnerships balanced with an improvement of the public sector would be the best option to improve healthcare in the developing countries in the future.

In selecting a topic for this blog, I was most interested in looking at how the new issues in health care, especially in the developing world, would be affected by the public and private sector. More specifically, the ways in which the private sector could improve and expand health care to the developing world, either independently or in conjunction with the public sector. The questions I most wanted to address were identifying the reasons behind the great disparity in living conditions among the world’s populations, what effect the disparity in GDP and national income have on the distribution of health care, what sort of constraints are placed on public sector organizations and what effect these constraints have on the work they are able to do. These questions lead me to look at the public and private sectors relationship more in a more in depth manner. I decided to direct my blog postings to look at the ways in which the private and public sectors could work together to solve the aforementioned issues, what sort of cost-benefit analysis a private sector organization would produce in their attempt to solve this issue, and what sort of opportunities are available for private sector partnership. I continued to discuss these issues in the later posts in my blog.

First I looked at the demonstrated need for private sector involvement in the context of health care in Sub-Saharan Africa. We were able to gather that while all groups polled demonstrated a need for more accessible health care, those people who already sought health care outside of the home, generally preferred private sector health care. In Cameroon, 55% of people sought private sector health care, and in Malawi, 74% sought private care. These numbers are proof that the private sector must increase their involvement in providing care in order to truly establish change. I then transitioned to looking at the private sector involvement in World AIDS Day and the sort of impact the private sector was able to have then. The most important influence I found was in the realization that the private sector involvement is not solely just to raise awareness, but rather that these groups truly do want to get involved. Events like World AIDS Day allow the private sector to get involved in a more meaningful way than strictly monetarily, and facilitated their taking a more active role in the movement towards achieving better global health care.

During the quarter, I have been able to take an in-depth look at the role of the private sector in affecting improvements in global health care. I looked at instances where the private sector worked alone, in conjunction with the public sector, and at situations where private sector involvement would have improved exponentially the efficacy of an organization. All of these instances support the case that the private sector is the missing ingredient in the fight towards better global health care. I think that ultimately, the most effective strategy that can be identified is to unite the forces of the private and public sectors in the fight towards achieving better global health care.

At the beginning of the Blog, I had numerous unanswered questions. I now look back on such questions so that I can formulate a meaningful conclusion about what I’ve learned from blogging about the “Role of the Private Sector in Global Public Health.” My particular blog focused on “Public-Private Partnerships,” which is the collaboration of the public sector and the private sector in jointly achieving a common goal.

One of my questions asked, “What economic benefit would the private sector have in eliminating disease for the public?” From what I’ve learned about the current PPP’s around the world, vaccine research is of great concern for the private sector. From Blog Post #4, I learned about the International AIDS Vaccine Initiative (IAVI), which seeks to strengthen existing HIV/AIDS prevention methods as well as research and implement new programs that can fight HIV/AIDS. Just as IAVI is working towards a HIV/AIDS vaccine, Medicines for Malaria Venture (MMV) is also working to promote their medical product that will fight a different infectious disease, malaria. These two PPP’s are specific examples in which private research companies worked with the public sector to (1) develop a vaccine and (2) distribute the vaccine. The private sector is able to benefit economically because of the grants provided to do research and invent vaccines.

Another question I raised was “What immediate social benefit can individuals receive from helping to improve the health of the public?” One specific case I blogged about in my Blog #5, was Better IT for Better Health (“bIT4health”). The Better IT for Better Health in Germany is a partnership developed to enable nationwide introduction of health telematics to the citizens, that will allows them to efficiently access the healthcare sector. Through better IT provided by a private service company, health telematics was able to better serve the population as a whole. Thus, individuals within the private sector immediately benefited from the work of a PPP.

Finally, “what happens when those working within the private sector take time off to do volunteer work within the non-profit sector?” When those from the private sector spend time working within the non-profit, public sector, constructive and advantageous collaborations can take place. This is the basis of a public-private partnership. The greatest benefits of a PPP is the fact that the ideas of the various partners can coalesce into a comprehensive vision. In an example from Bog #6, the African Comprehensive HIV/AIDS Partnerships (ACHAP) works with Botswana’s existing model of fighting HIV/AIDS. By integrating with the government’s strategy, the ACHAP is able to harness the capabilities of the private and public sectors to address the challenges of today.

The main obstacle to PPP’s is the idea of a partnership between diverse parties. As I mentioned in Blog #8, the greatest challenge to working together within the public-private partnership is maintaining independence while working toward a common goal. All of the players (whether public or private) must remain true to their individual directives and concerns, but partners also must not deviate from the vision of the whole. While this is the case, I researched the management hierarchy within a PPP to better understand how these partnerships could stay together. The Stop TB Partnership has devised divisions in governance to keep balance within the partnership. Whether a player is a member of the Partner’s Forum, Coordinating Board, Working Groups or the Secretariat, each has a role to play within the public-private partnership.

Throughout the quarter, I investigated the role that the private sector can play in furthering global public health. A public-private partnership is an effective way though which the private sector can get involved. The only caution I provide is that group work is often unbalanced and unregulated. Finding common ground to begin collaborative work is of utmost importance for the success of a public-private partnership. Otherwise, combining the strengths across partners is a terrific way for the private sector to serve public interests.

A few weeks ago, when I was searching for information for one of my earlier posts, I came across an editorial written in The Times and republished in numerous other publications in December 2008 by Mathew Parris, a former British MP, entitled, “As an atheist, I truly believe Africa needs God: Missionaries, not aid money, are the solution to Africa’s biggest problem—the crushing passivity of the people’s mindset.” While I did hesitate to end my blog with such a provocative, opinionated article, which I do not entirely agree with, after some thought, I decided that it raises some very important, and thought provoking questions and answers that are relevant, similar and even sometimes the same as all of the questions that I raised and attempted to answer in all my previous blog entries.

While I could attempt to summarize the article and post the link right here, knowing that probably no one will actually click on it and read it, I am going to copy and paste the article right here. I would like to leave you all with his words and a few of the 415 comments (I read about 200 of them and then they just started repeating themselves) that express some of the various reactions to his article and opinion on the role of Christianity in Africa:
As an atheist, I truly believe Africa needs God
Missionaries, not aid money, are the solution to Africa’s biggest problem - the crushing passivity of the people’s mindset
Matthew Parris

Before Christmas I returned, after 45 years, to the country that as a boy I knew as Nyasaland. Today it’s Malawi, and The Times Christmas Appeal includes a small British charity working there. Pump Aid helps rural communities to install a simple pump, letting people keep their village wells sealed and clean. I went to see this work.
It inspired me, renewing my flagging faith in development charities. But travelling in Malawi refreshed another belief, too: one I’ve been trying to banish all my life, but an observation I’ve been unable to avoid since my African childhood. It confounds my ideological beliefs, stubbornly refuses to fit my world view, and has embarrassed my growing belief that there is no God.
Now a confirmed atheist, I’ve become convinced of the enormous contribution that Christian evangelism makes in Africa: sharply distinct from the work of secular NGOs, government projects and international aid efforts. These alone will not do. Education and training alone will not do. In Africa Christianity changes people’s hearts. It brings a spiritual transformation. The rebirth is real. The change is good.
I used to avoid this truth by applauding - as you can - the practical work of mission churches in Africa. It’s a pity, I would say, that salvation is part of the package, but Christians black and white, working in Africa, do heal the sick, do teach people to read and write; and only the severest kind of secularist could see a mission hospital or school and say the world would be better without it. I would allow that if faith was needed to motivate missionaries to help, then, fine: but what counted was the help, not the faith.

But this doesn’t fit the facts. Faith does more than support the missionary; it is also transferred to his flock. This is the effect that matters so immensely, and which I cannot help observing.
First, then, the observation. We had friends who were missionaries, and as a child I stayed often with them; I also stayed, alone with my little brother, in a traditional rural African village. In the city we had working for us Africans who had converted and were strong believers. The Christians were always different. Far from having cowed or confined its converts, their faith appeared to have liberated and relaxed them. There was a liveliness, a curiosity, an engagement with the world - a directness in their dealings with others - that seemed to be missing in traditional African life. They stood tall.
At 24, travelling by land across the continent reinforced this impression. From Algiers to Niger, Nigeria, Cameroon and the Central African Republic, then right through the Congo to Rwanda, Tanzania and Kenya, four student friends and I drove our old Land Rover to Nairobi.
We slept under the stars, so it was important as we reached the more populated and lawless parts of the sub-Sahara that every day we find somewhere safe by nightfall. Often near a mission.
Whenever we entered a territory worked by missionaries, we had to acknowledge that something changed in the faces of the people we passed and spoke to: something in their eyes, the way they approached you direct, man-to-man, without looking down or away. They had not become more deferential towards strangers - in some ways less so - but more open.
This time in Malawi it was the same. I met no missionaries. You do not encounter missionaries in the lobbies of expensive hotels discussing development strategy documents, as you do with the big NGOs. But instead I noticed that a handful of the most impressive African members of the Pump Aid team (largely from Zimbabwe) were, privately, strong Christians. “Privately” because the charity is entirely secular and I never heard any of its team so much as mention religion while working in the villages. But I picked up the Christian references in our conversations. One, I saw, was studying a devotional textbook in the car. One, on Sunday, went off to church at dawn for a two-hour service.
It would suit me to believe that their honesty, diligence and optimism in their work was unconnected with personal faith. Their work was secular, but surely affected by what they were. What they were was, in turn, influenced by a conception of man’s place in the Universe that Christianity had taught.
There’s long been a fashion among Western academic sociologists for placing tribal value systems within a ring fence, beyond critiques founded in our own culture: “theirs” and therefore best for “them”; authentic and of intrinsically equal worth to ours.
I don’t follow this. I observe that tribal belief is no more peaceable than ours; and that it suppresses individuality. People think collectively; first in terms of the community, extended family and tribe. This rural-traditional mindset feeds into the “big man” and gangster politics of the African city: the exaggerated respect for a swaggering leader, and the (literal) inability to understand the whole idea of loyal opposition.
Anxiety - fear of evil spirits, of ancestors, of nature and the wild, of a tribal hierarchy, of quite everyday things - strikes deep into the whole structure of rural African thought. Every man has his place and, call it fear or respect, a great weight grinds down the individual spirit, stunting curiosity. People won’t take the initiative, won’t take things into their own hands or on their own shoulders.
How can I, as someone with a foot in both camps, explain? When the philosophical tourist moves from one world view to another he finds - at the very moment of passing into the new - that he loses the language to describe the landscape to the old. But let me try an example: the answer given by Sir Edmund Hillary to the question: Why climb the mountain? “Because it’s there,” he said.
To the rural African mind, this is an explanation of why one would not climb the mountain. It’s… well, there. Just there. Why interfere? Nothing to be done about it, or with it. Hillary’s further explanation - that nobody else had climbed it - would stand as a second reason for passivity.
Christianity, post-Reformation and post-Luther, with its teaching of a direct, personal, two-way link between the individual and God, unmediated by the collective, and unsubordinate to any other human being, smashes straight through the philosphical/spiritual framework I’ve just described. It offers something to hold on to to those anxious to cast off a crushing tribal groupthink. That is why and how it liberates.
Those who want Africa to walk tall amid 21st-century global competition must not kid themselves that providing the material means or even the know how that accompanies what we call development will make the change. A whole belief system must first be supplanted.
And I’m afraid it has to be supplanted by another. Removing Christian evangelism from the African equation may leave the continent at the mercy of a malign fusion of Nike, the witch doctor, the mobile phone and the machete.

Here are a few of the 415 comments:

I think this is a very courageous article, because Parris says what he thinks - despite his own atheism; despite the fact that Christians will react with (over-)enthusiasm; and despite possible accusations of neocolonialism or ethnocentrism. I’m prompted to reflect on what being a Christian means.

Darrell Tan, Singapore

This is such a ridiculous argument. Missionaries spread aid throughout Africa while they are spreading the word of God. The main factor here is while they are spreading the word of God. Aid is not given unselfishly; it is given to increase followers.

Gerard Taylor, Belfast, Northern Ireland

NOT TRUE

by humanity, not God.

June, Cape Town , South Africa

I have seen similar situations in Asia. Secular NGO s in discussion in 5 star hotels because the situation is “difficult” whilst christian missions are making a difference whatever the circumstances working alongside locals in need. Not perfect but at least trying to make a difference.

steve norman, Milton keynes , Buckinghamshire

Christianity cannot save Africa. The place is already awash with Christian sects (both mainstream and eccentric), missionaries, firebrand preachers, exorcists, witch-hunters, rioters, self-starving ascetics, 
spasming holy-ghosters, the lot. There’s no room for any more. But still the chaos stews.

Bruce, London

I think you may have a point, with regard to many communities, particularly those which are inevitably having to deal with urbanisation…But overturning ‘group-think’ in favour of individualism is not of itself a noble cause, certainly in many tribes there is much to admire– eg the Aka Pygmies.

will, Worcester, UK

Africa is a popular missionary destiniation. 

It hasn’t helped. The ANC says it will “Rule till Jesus comes” the LRA murders nuns in the name of God, even the Rwandan genocide. 

If Africa is to pull itself out of the muck, skepticism, not faith is how it will do it. Faith just breeds dictators.

Bruce Gorton, Johannesburg, South Africa

Wow, it’s great that someone has the courage to speak what he really thinks & believes & what he thinks is amazing.. I feel that the writer wrote from his heart & I’m proud of him! There are so many writers who fear to use religious words or they don’t think so deeply how our values affect in everything.

Tiina Kajala, Turku, Finland

I’ve already said what I think over the course of my seven blog entries.

What do you think?

The Stop TB Partnership is a public-private partnership that seeks to eliminate TB as a major global health problem and hopefully free the world from TB entirely. The partnership was first established in March 1998 in London in which a number of like-minded individuals and organizations united together against TB. What makes Stop TB such a successful partnership is that the players of the partnership are all working towards a well-defined and specific goal. As a global movement, this partnership hopes to reach its goal of eradicating TB in the world by the end of the century. The goal for 2050 is to limit the disease prevalence to 1 inflicted person per million people, which would knock TB off the list of major global health problems. In order to accomplish these goals, the players within the Stop TB Partnership are urging an increase in social and political action across the globe.

Currently, the Stop TB Partnership is governed by the Partner’s Forum, Coordinating Board, the Working Groups and the Secretariat. Each branch of the Stop TB Partnership works collaboratively toward the vision of the partnership. The greatest challenge to working together within the public-private partnership is maintaining independence while working toward a common goal. All of the players (whether public or private) must remain true to their individual directives and concerns, but partners also must not deviate from the vision of the whole. While this is the case, the Stop TB Partnership has devised divisions in governance to keep balance within the partnership. Whether a player is a member of the Partner’s Forum, Coordinating Board, Working Groups or the Secretariat, each has a role to play within the public-private partnership.

The Partner’s Forum is the assembly of Stop TB. It consists of representatives who meet together to comment on and discuss the progress of the partnership. Representatives from all the partners will create and explore new opportunities through which Stop TB can raise awareness about the cause as well as formalize the commitments of Stop TB’s initiatives.

The Coordinating Board consists of all component constituencies of the partnership, leading Stop TB and providing direction for future initiatives. According to the website, players from both the private and public sector are on the Coordinating Board:

o      4 representatives from high burden countries,

o      3 representatives, one from each of WHO, the World Bank and the GFATM,

o      1 representative of another international organization,

o      6 regional representatives, assuring the inclusion of representatives from non-high burden countries,

o      7 Working Group Chairpersons representing DOTS Expansion, MDR-TB, TB-HIV, Diagnostics, TB Drug Development, New Vaccines and Global Laboratory Initiative,

o      5 representatives of financial donors,

o      1 representative of Foundations,

o      3 representatives of NGOs and technical agencies, including The Union and CDC as permanent members,

o      2 representatives of communities affected by TB,

o      The Chair of the WHO STAG, and

• 1 representative of the corporate business sector

The Coordinating Board develops plans of action for the partnership, mobilizes resources for various programs, formulates financial policies and reviews the financial statements, approves of work plans from the Secretariat, and promoting social advocacy among other functions.

The seven working groups are geared toward focused action toward a particular region. These working groups act under individual governments but they work under the umbrella of the Stop TB partnership. In this way, Stop TB can work directly with local communities through people from those regions. Some of the working groups focus specifically on TB drugs, others on TB vaccines, and still others are researching TB diagnostics.

The Secretariat supports the vision of TB through implementation of administrative duties and operations. Currently housed within the WHO in Geneva, the Secretariat oversees the projects of each sector to craft synergies and effective execution of the projects. The four areas under the Secretariat’s guidance are (1) Advocacy, Communication and Social mobilization, (2) Investment mechanisms, (3) Coordination and Mobilization, and (4) Drug Supply. From the goals set by the Coordinating Board, the Secretariat goes about finding the most efficient way to accomplish those objectives.

Thus, the players within the Stop TB Partnership keep each other accountable for their actions, ensuring that the vision is put into action. From the Working Groups that work directly in the field to the Coordinating Board that provides leadership and brings innovative ideas to the table, Stop TB comes closer and closer to its goal of eradication. From the Secretariat, which facilitates and manages projects, to the support of the Partners’ Forum, Stop TB consists of an interconnected network that fights for a united cause… to STOP TB!

          While I have already discussed the background, potential, and consequences of microfinance, I have not addressed at length the underlying issue that microfinance as a whole depends on:  the challenge of actually spreading and instituting microfinance services.

            The first challenge I will address is one of infrastructure.  Roads are often necessary for people, especially those in rural areas, to even get to a microfinance lender, and basic human needs like a clean water supply and functioning waste management systems need to be met before potential entrepreneurs can turn their attention wholly to their business ambitions.  For this reason alone, any effort to promote private sector microfinance, or industry in general, needs to first ensure that the society in which that industry is to operate can actually support the people who function within it.  A related issue is not only making sure that money is able to be invested well as a result of a strong infrastructure but also that the valuable human capital necessary for microfinance to succeed is not going to waste because of poor distributional or transportation networks (1).  An intriguing suggestion made at a 2005 Washington DC conference on microfinance was the idea to install machines to which lenders could pay back their loans (1).  This sounds promising, but one wonders whether the repay rate would still be as high if this were implemented and if the technology necessary to do this can be produced cheaply enough on a mass scale.

            A second significant challenge to implementing private sector microfinance is convincing investors that it is a project worthy of their money.  As I have already pointed out in previous blogs, microfinance lenders repay their loans plus interest at around a 95% rate, higher than the rate American credit card holders repay their debt, and that there are already existing successful business models, such as Ebay’s Microplace, that revolve around the concept of microfinance.  However, there is still a deep-rooted skepticism of microfinance as a viable business strategy in many countries where it simply presents a massive logistical problem.  As James Rose in his essay “Time to bank on Grameen,” notes, the very nature of microfinance requires covering a vast geographical area and servicing large numbers of small-scale and poorly educated clients (2).  Taking the example of China, he points out that in that country alone, there are 60 million people who need the loans but cannot obtain them for largely logistical reasons.  Overcoming these challenges is perhaps the largest obstacle to creating a successful microfinance business model.  American companies like Ebay’s Mircoplace succeed in large part because they are backed by the deep pockets of major companies that can ensure money and human capital get utilized effectively, but having the financial support of a multi-billion dollar company is obviously the exception, not the norm.  As Rose points out, most microfinance banks currently rely on small time socially responsible investors and donors to stay afloat (2). 

            The third challenge I will discuss is a simple matter of new private sector microfinance institutions being able to find room in an industry largely dominated by large state run banks.  The demand for microfinance loans from small, private sector institutions is certainly high considering large banks often have stringent lending requirements that the impoverished simply cannot meet, but this demographic has little to no money and are often scattered to the point where it is difficult for them to mobilize and agitate for institutions that can meet their needs.  I think the best way to address this problem is to create public-private partnerships whereby both sides, big and small, state run or individually owned, have something to gain from the union.  With the financial resources of public banks, private sector microfinance could service a huge population that it cannot currently help.  This would not only have the advantage of benefiting the lenders but would also increase the revenue of the private sector microfinance institutions and by extension the public sector banks that are supporting them.  Furthermore, it would allow the large, public sector banks to continue to focus on their major, wealthy clients while allowing their microfinance partners to service the millions of smaller scale investors.  In this way, both sides contribute and gain from the arrangement.

                                                  Works Cited

1.  ”MICROFINANCE MATTERS - Update on the International Year of Microcredit 2005.” UNCDF / FENU. 22 May 2009 <http://www.uncdf.org/english/microfinance/pubs/newsletter/pages/2005_06/year_update.php>.

2. “The Standard - China’s Business Newspaper.” The Standard - Hong Kong’s First FREE English Newspaper. 22 May 2009 <http://www.thestandard.com.hk/news_print.asp?art_id=30550&sid=10589570>.

The domestic private sector can effectively translate R&D results into real health products and services for individuals in developing countries lacking in modern health technology. The pharmaceutical industry is a major channel for leaps in medical innovation to reach the broader public. Companies in emerging economies have empirically helped serve global health needs. For example, artemisinin, today’s modern first line therapy for malaria was discovered by Chinese scientists who isolated the active ingredient from sweet wormwood in 1965.[1]

China’s health pharmaceutical industry is growing relatively quickly, at an annual growth rate of 30% since 2005 compared to a global rate of 19%. Despite the large volume of daily consumers (130 million people), the biotech market segment (genetically engineered drugs, vaccines, antibodies, and blood products) represents less than 10% of China’s pharmaceutical industry. Biogenerics comprise 90% of the market and novel products only 3-7%. This is not unexpected since China’s large population size creates a need for low-cost products. Generic products are less risky for private companies to invest in when entering the biotech industry. Amoytop Biotech, for example, produces recombinant products like interleukins, interferons, and PEGylated versions of them. Diagnostic products are also a less risky entrance point. Beijing Wantai Biological Pharmacy Enterprise develops a variety of blood screening tests for diseases and Shanghai Huaguan Biochip sells different types of fertility tests. Sales revenues are also derived from exporting these mass-produced products to other countries.

With government assistance, the risk of entry into more innovative developments like gene therapy and stem cells may be reduced. Firms such as SinoCells, which works on very early stage development of therapies using nerve and mesenchymal stem cells, can receive approval from China’s State Food and Drug Administration (SFDA) with different standards – some do not require clinical trials in order to be approved.

Despite such government facilitation, several barriers to development still exist. First, financial mechanisms to support innovation are lacking. Although the Chinese government is investing millions of RMB in innovation, potential investors are deterred from making substantial investments due to a lack of exit strategies and uncertainty of the financial system. Hybrid generic and R&D business models are not a viable alternative since they can dilute resources and have already been rejected in the West. Second, international credibility has been low and more international partnerships are necessary to engage international markets (which also helps diversify risk). Despite the SFDA raising its standards to comply with international norms, a recent scandal in the SFDA harmed credibility when the agency’s former director accepted bribes in exchange for approving drug production licenses. Lack of intellectual property protections also discourages companies from sharing production “secrets” with international partners. Third, sales and distribution is difficult because people in rural areas don’t have access to information to weigh the benefits and risks of new products. In addition the majority of China may not be able to pay for drugs at Western prices so adjustments need to be made.

In response to these barriers, the government can initiate reforms to help facilitate the private sector’s development in innovative biotech. First, the government should reform the financial environment to facilitate exit mechanisms for entrepreneurs and investors in the health-biotech sector. Specialty programs in biotech entrepreneurship and management should be developed to facilitate confidence in market entry. Second, the government should provide incentives for Chinese professionals who have moved abroad (resulting in a national “brain-drain”) to return in order to promote transnational companies that will be attractive to Western investors and strategic partners. The credibility of domestic firms to the international community can also be improved by enforcing uniform financial reporting, a transparent regulatory regime and fair business practices. Intellectual property laws need to be developed and enforced to promote international partnerships. Finally, the government should strengthen health systems infrastructure and distribution mechanisms in concert with the development of the industry to ensure that innovative health-biotech products are available to the entire domestic population.

Frew, Sarah E. et al. “Chinese health biotech and the billion-patient market.” Nature Biotechnology Vol. 26 No. 1. January 2008. <http://www.nature.com/nbt/journal/v26/n1/pdf/nbt0108-37.pdf>