Health governance & IMF report

WHEN people moan about weak health governance and corruption in the health sector, I remind them it is a small piece of a larger problem.

- BY ZAFAR MIRZA

Fixing governance issues in the health system has its limits.Still, one should not give up and be mindful of the larger context. One cannot build an island of good governance in the health sector alone when it is surrounded by an ocean of bad governance on a high tide where undressed big boys are ski boarding. The IMF’s recent damning report, Pakistan: Governance and Corruption Diagnostic Assessment, explains the high tide.

Apart from giving staggering numbers for the termite of corruption, which has built its mounds and subterranean nests in our society, it also raises a shrill cry over the absence of any meaningful reforms, which each of the four IMF programmes in the last 10 years have flagged.

Let’s first talk about the scale of corruption. The IMF analysis shows that Pakistan is losing between a five to 6.5 per cent of GDP to corruption which is a direct consequence of weak governance. In other words, Pakistan could have generated a GDP increase of between 5pc and 6.5pc by implementing governance reforms.

Let’s see what a 5pc to 6.5pc increase in GDP would mean in real terms. Pakistan’s GDP is around $400 billion; 5pc to 6.5pc of this figure would be $20bn to $ 26bn, equivalent to Rs5,600bn to Rs7,280bn. To bring in perspective, the total health expenditure of Pakistan, which means government health expenditure plus what people spend out of their pocket, is equal to approximately $11bn (Rs2,000bn). So, the level of corruption in Pakistan is 2.5 times more than the total health expenditure in the country. If through a magic wand all this corruption could be stopped and the amount saved spent on health, government spending on health could be increased almost five times, since the government health expenditure is around Ipc of GDP. Ah! If only wishes were horses!