Saving for the world one dollar at a time

Philippe Douste Blazy (MD) is founder and chairman of UNITAID, an intergovernmental global health initiative largely funded by solidarity levy on airline tickets around the world, and under-secretary-general, special advisor on innovative financing for development in the United Nations. A medical doctor by profession, a cardiologist, Douste Blazy, 62, also served as university professor in his homeland, France, for many years. His political career expands from serving as a mayor of two cities, Lourdes and Toulouse, to holding the position of minister of culture, health and minister of foreign affairs during the presidency of Jacques Chirac, who was in office from 1995 -2007. And ten years ago, he decided to dedicate his life to fighting extreme poverty and other social challenges. As a lead advisor in innovative development finance, Douste Blazy is here in Addis Ababa this week attending the third international conference of Finance for Development (FfD), and, in between his busy schedule, Douste Blazy sat down with Asrat Seyoum of The Reporter for an  interview. Excerpts:

What drove you to quit politics and pursue development work?

As you know, today some two billion people live on less than two dollars a day. I think it is a shame for humanity that this much people make-do with less than two dollars income per day. When people live below two dollars a day, then it means that we don’t have what we call global public goods. This includes drinking water, food, essential medicine such as vaccines and sanitation and education services. Since 2000, especially with the Millennium Development Goals and increased flow of development aid, we have seen a lot of progress in these sectors. For instance, the international community managed to reduce by about 54 percent childhood mortality rate. However, we still have a lot of work to do especially with regard to extreme poverty. And this is the main reason behind me joining the development sector and currently serving as Under-Sectary-General, Special Advisor on Innovative Financing for Development.

Can you elaborate on the concept of innovative development financing and what the term connotes in general? As I understand, it is a relatively new concept in the development sector?

Yes, innovative finance for development is a relatively new concept for the discipline of development. To get the idea behind this concept one has to understand two things first. First the need for the global development financing is increasing from time to time. Now, we have to fight against extreme poverty, health epidemics and climate change. And, on the other hand, the level of the Official Development Assistance (ODA) is also decreasing through time. So, we have a kind of a scissor’s effect happening; the need rising on one hand and the ODA declining on the other. If we continue down this path, the gap between the rich and the poor would become more significant. This could have a catastrophic effect in the long run. So, the only possibility is to push governments [industrialized countries] to give 0.7 percent of their Gross National Income (GNI) to advance development goals in developing countries. We also have to ask developing countries to allocate greater shares of their national budget to health, education and the like. In this regard, countries like Kenya, Ethiopia and Nigeria are very good examples. But, we have to also acknowledge that the world is changing, and that we have a lot of activities which are benefiting from this globalization process. Take, for instance, the telecom sector, the internet, financial transactions, tourism and the extractive sectors with oil, gas and minerals. So, from these five sectors, one can raise resources for development by taking very small micro-solidarity contributions which are very painless and insignificant to users. But, at the end of the day, if millions and billions of people were able to do that, we can raise a huge sum of money. So, we decided to give this a try starting from 2006; and I have to say that it has been a success story so far. Before that, however, President Jacques Chirac and Brazilian President Lula da Silva spoke of innovative financing for development for the first time at Monterrey, Mexico, in 2002, the first international conference on FfD. In 2006, we decided to start with airplane tickets. So, we passed a law in that same year saying that the government would levy a one dollar/euro on airplane ticket to help the global development effort. It was found that this was quite painless for the state, the company or the consumer. After that, we replicated the experience in eleven other countries.

So, is France the first country that implemented the solidarity levy on airplane tickets?

Yes, but as I said others also followed suit afterwards. Now, if one is flying from Addis to Paris, your airplane ticket price is subject to this one dollar/euro levy, but passengers hardly notice this amount as it is very insignificant. However, we were able to raise some 2.6 billion dollars in a span of years. Here, you can see that this contribution is virtually nothing for those who bear it, but it is also a huge sum of money at the aggregate level. What we have shown is the fact that a painless amount of money from each and every one of us can actually change the world. At that time, we decided to use that money for the fight against HIV/AIDS, Malaria and Tuberculosis around the world. Also at that time, there was no pediatric medicine for children living with HIV/AIDS because such medicine was never made by the pharmaceutical companies. Why? It was actually interesting to observe that these companies had no demand for such products from the developed world as there were no children who were living with HIV/AIDS in these advanced nations. The reason for this was that the pregnant mothers infected with HIV/AIDS were receiving proper treatment and as a result infants were being born free of the virus. Hence, the big pharmaceutical companies have no potential market for pediatric treatment drug for HIV/AIDS and as a consequence they did not develop the treatment. Meanwhile, these poor children have to take adult medicine to treat their illness, that is HIV/AIDS. We then decided to use this money we raised through the micro-solidarity levy to develop this drug [pay the companies to develop the drug]. And thanks to this small idea, in 2009, 2010 and 2011, eight out of ten children who were treated for HIV/AIDS were treated using this pediatric treatment. UNITAID, the organization that I founded and chaired from the beginning, is the one that collects the money from the solidarity levy and channels to where it needs to be channeled. We also financed a lot of programs against malaria, 355 million treatments to be exact and another 8.5 million treatments against tuberculosis. Another interesting aspect of this financing mechanism is the fact that it is sustainable. For instance, the law we have passed back in 2006 instituting the one dollar/euro levy on airplane tickets is still in place. Apart from that, such modes of financing are highly predictable because they are sustainable. On the other hand, when organizations like our (UNITAID) offers companies [pharmaceuticals] longstanding market for their medicine, they will not only be motivated to produce and develop new ones, but they will also be encouraged to reduce the price of their products. In this regard, UNITAID alone succeeded in pushing down the price of treatments for HIV/AIDS, malaria and tuberculosis by close to 60 percent over the years. But, actually, UNITAID is well known around the world because we work through partners. We actually chose well-known NGOs, foundations and organizations like UNICEF, the Clinton Foundation and Doctors without Borders.

But, what is the UN structure as a whole doing to promote this innovative development financing instruments?

This is very interest because I often encounter such questions even in my country, France. People ask me what the UN is doing. The fact of the matter is that the UN alone does not exist. The UN is the composition of its member nations. So, when you think of the UN, it is a mere collection of the representatives of the member countries. What I am saying is that the decision of the UN comes from the heads of state of member countries. But, if you ask me as under-secretary-general of UN to pass one resolution today that would be to implement innovative financing in all countries in the world to fight extreme poverty, to eradicate epidemics and to allow all the children in the world to go to school. I can, as an official of the UN, suggest these resolutions and advise the heads of state to sign it. So, I can do my job in showing to leaders what the right thing to do is; but that is all. The heads of state are the ones who have to agree and pass the decisions. So, the UN wants to promote this concept and possibly expand the use of innovative financing for development. Nevertheless, it is up to the countries to decide at the end of the day.

We also understand that the need for innovative finance for development arose from the very fact that nations are willing to honor their ODA commitments. It is to fill the gap created between ODA and financial requirements to finance development endeavors. How far do you think innovative financing had contributed to this end?

One thing we have to note here is that Innovative Finance for Development is not an alternative to ODA; it is rather an addition. If we treat Innovative Financing as an alternative to ODA it would be a failure for us because we shall not accomplish anything other than shifting the source of the financial resources. The other point is that innovative finance for development entails mechanisms which are easily implementable. It is quite easy to bring change by using innovative financing mechanisms. I give you an example to illustrate: if all the people in the world decide to contribute 0.01 percent of all the financial transactions that takes place, we can easily raise 400 billion dollars in just one year. So, I believe if we want to have this kind of resources, it won’t be a difficult task to accomplish at all.  But the problem is for the international community that the development challenges are not an emergency. For me, it is; and I will explain how. Now, the world is increasingly connected with innovations in telecom and information technology sectors bridging the gap that existed before. So, a person that is living in poverty, a person that could not get medical treatment for his child because the international community refused to give a meager one dollar will now have access to information to see how the rest of the world is living. By the way, one dollar can buy treatment for two children with HIV/AIDS. When this person [living in poverty] sees those in advanced nations going for a 14 dollar cup of coffee, it is bound to create a feeling of anger and humiliation at first and who knows what else in the long run. Generosity and charity is one thing, but solidarity is quite another. I think we have to act not only for ethical and moral reasons but also for political reasons as well.

If it is so easy to do it, that is eradicating poverty and all social ills through innovative financing, why has it not happened yet?

The thing is that we need more public awareness; we need the press and we need the public. I was a politician for twenty years and I know how a politician works. Politicians want to be elected so they do care about public opinion. There must be a big movement to push politicians to do this. We should be able to explain to the global community that it is the most important fight that mankind had ever had to fight. And we should also explain that, indeed, it is easy and that it can be done. For me, the fact that two billion people cannot get access to essential services such as medicine and vaccine is equally as notorious as slavery. So, I think this fight is equally important as the fight against slavery; if not more important because not being able to afford essential medicine is about life and death. But, the international community does not see it that way.

But if we need a movement to influence the way politicians view this matter, are we not going back to the point where we have started in the first place. Innovative finance for development evolved in the first place because we could not influence politicians to honor their political commitment on ODA. So are we not going in a circle here?

Not if the public opinion is strong enough to push this agenda; not if the public wants this to happen and exert needed pressure on politicians. Look, now we are having a more globalized world thanks to the advancement of communication technology. However, what we don’t have yet is globalization of solidarity among the people. I do understand that politics is a very hard job to do. If you are the president of France, your accountability lies with the people of France since you aspire to be democratically elected after five years. Under this condition, politicians and leaders tend to forget other people in other countries who are suffering by living under extreme conditions that are imaginable. Today we are seeing thousands of people who don’t know how to swim by boarding rickety boats to cross the Mediterranean Sea and get to Europe. We also see a lot of conflict between the European citizens and migrants over jobs. The only solution for this is not the police or the military but to provide drinking water, jobs and wealth to the developing countries.

As you have mentioned before, innovative development financing is saving lives and impacting human existence especially in the health sector. But why only the health sector? What about education and other sectors?

 I agree with you that most of the gains through innovative development financing mechanisms are recorded in the health sectors. Basically, why I am personally inclined towards the health sector is that first and for most the health sector targets are easily measurable. It is easier to count, for instance, the number of people who are living with HIV. We say, for example, in 2006 we had 3.3 million children who were living with HIV but never received any treatment. Or, similarly, in 2015 I have some 800,000 children who are receiving this treatment because of innovative development financing. Here I can easily see and measure the level of impact this financing mechanism has on the people who need such treatment. I can say, thanks for the results, that we must continue to create innovative financing. Now, if we talk about education, what exactly is the definition of education? Is it to learn to read and write or is it to have a degree from a higher learning institution? It is quite difficult. And how are you are going to measure when you lack even a definitional clarity. It is also similar with hunger. Nevertheless, the difficulties notwithstanding, innovative financing, I can’t stress this point enough, is not only for health; rather it is for all public goods: education, food, drinking water, sanitation and the like. If I can give you one example here, one year ago I and my partners decided to establish a new organization called UNITLIFE based on a micro-solidarity contribution on the extractive sectors: oil, gas and minerals. If you look at this sector and its growth, the sector which was worth some 20 or 30 billion dollars in 2002 reached some 200 billion around 2008. The wealth of Africa when it comes to extractive resources is absolutely amazing. So far, I am not sure how far this extractive sector has helped the people. So, we decided to ask African heads of state to make micro contributions from this lucrative sector and use the resources to fight the most important disease in developing countries: chronic malnutrition or stunting. Some 32 percent of the children in Africa suffer from chronic malnutrition. It is a disease which comes in the first 1000 days of the child’s life as a result of deficiency of important nutrients vitamin B1 and B6 from the child’s diet. If this is not addressed at the early stages, especially after two years or so, the child would suffer from irreversible cerebral consequences. Now, you can build all the schools you like and the child can go to the school, but the child would have trouble understanding the material. This would have far-reaching consequences since it is no more a health issue but it becomes an economic and social issue.

What do you expect from FfD conference in Addis? I mean in terms of innovative finance for development?

 This year is quite important for the global development community because we have three key events that are happening. For one, this is the year for the FfD conference to take place in Addis Ababa; this year is also the year when the UN General Assembly would launch the Sustainable Development Goals (SDG) and it is also the year for international conference on climate change COP21 in Paris. More than anything else, we need to have a political agreement as an international community and to go with the political agreement we need a financing mechanism. So far, we don’t have any agreement on financing of the development goals that are set on SDGs. In my view innovative financing for development would come out to be a key instrument of financing in this conference. I guess you can say that I am waiting on an agreement regarding innovative development financing. Broadly, I think the global community has to understand that SDGs are the only possibility to avoid a global conflict at the end of the 21st century. If not for anything, the international community has to move forward very quickly. In that, I think we have to continue to push governments to give ODA but also implement innovative financing to bridge the gap.