The Concept of Middle Income Countries through a Health Lens
INNOVATION AND ACCESS TO MEDICAL TECHNOLOGIES
5 November 2014
David B EvansDirector, Health Systems Governance and Financing
World Health Organization, Geneva
Background1. Low, middle and high income classifications linked to
World Bank lending – eligibility for IDA. 2. 2015 fiscal year
I. low-income (34): GNI per capita (WB Atlas Method) ≤ $1,045 in 2013;
II. Middle-income economies (105): $1,045 > GNI per capita < $12,746;
(Lower-middle-income and upper-middle-income economies are separated at a GNI per capita of $4,125) III. High-income economies (75): GNI per capita ≥ $12,746.
3. 77 IDA-eligible countries; 59 IDA-only; and 18 blend countries. In addition, India is receiving transitional support
Country Income Classifications and Health
1. Since the financial crisis (2008), increasing demands from external financial partners in health for countries to become "self-sufficient" and prove "value for money" or "results".
Development Assistance Commitments (current $US billions)
Source: OECD
Nossal Forum, Melbourne, 22 October 2014
Country Income Classifications and Health
1. Since the financial crisis (2008), increasing demands from external financial partners in health for countries to become "self-sufficient" and prove "value for money" or "results".
2. Income per capita is featuring heavily in the idea that countries should raise more funds domestically and be "weaned" off external support
3. GAVI eligibility (53): GNI per capita ≤ $15704. Also requires co-funding of $0.20 per dose, rising linearly to full
cost over time.5. Global fund: based on income classifications, with
modifications. Includes a 15% additional payment on evidence of "willingness to pay".
Income Classifications and Global Fund
http://www.theglobalfund.org/en/fundingmodel/allocationprocess"Overview of the allocation methodology: 2014-16". Accessed 4 Nov 2014:
Total health expenditure (THE) per capita (2012)and GNI per capita (log scale)
0
200
400
600
800
1000
1200
1400
1600
1800
5 6 7 8 9 10
THE
per c
apita
$
GNI per capita (WB Atlas method), log
Low income
Middle income
Sources: THE – WHO Global Health Expenditure DatabaseGNI per capita – WB, World Development Indicators
Total health expenditure (minus external resources) per capita vs. GNI per capita
0
200
400
600
800
1000
1200
1400
1600
1800
5 6 7 8 9 10
THE
min
us e
xter
nal r
esou
rces
,pe
r cap
ita
GNI per capita (WB Atlas method), log
Low income
Middle income
Sources: Health expenditure – WHO Global Health Expenditure DatabaseGNI per capita – WB, World Development Indicators
What would happen if donors withdrew aid?
020040060080010001200140016001800
0%
50%
100%
150%
200%
250%
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THE minus external resources, per capita External resources for health, per capita
% increase of domestic resources if donors withdrew aid
Source: WHO internal calculations
GNI per capita growth (annual %), 2003-2012
-6
-4
-2
0
2
4
6
8
10
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
High income
Middle income
Low income
Source: World Bank, World Development Indicators
Trends: Government Commitment to Health (un-weighted average)
2007 2008 2009 2010 2011 2012AFR 10.7 10.2 10.4 10.6 10.5 10.5AMR 12.5 13.0 13.6 13.8 13.7 13.6EMR 7.3 7.3 8.2 8.0 7.9 8.2EUR 13.0 12.8 13.0 13.1 12.8 12.8SEAR 8.9 8.8 8.7 7.9 8.1 7.5WPR 13.3 12.9 12.7 12.6 12.7 12.7
General government expenditure on health % General government expenditure (GGE)
Source: WHO, Global Health Expenditure Database, www.who.int/nha
Share of Government Expenditure in GNI
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
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Net
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Aust
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ark
gge_gdp
gge_pc
Source: World Bank World Development Indicators
Under-five mortality rate vs. GNI per capita, 2013
0
20
40
60
80
100
120
140
160
180
5 6 7 8 9 10
Und
er-fi
ve m
orta
lity
rate
(per
1,0
00 li
ve b
irths
)
GNI per capita (Atlas method), log
Low income
Middle income
Sources: under-5 mortality: WHOGNI – WB World Development Indicators
Least Developed CountriesA country is classified as a Least Developed Country if it meets three criteria (48 in 2014):• Poverty (adjustable criterion: three-year average GNI
per capita of less than US $992, which must exceed $1,190 to leave the list as of 2012)
• Human resource weakness (based on indicators of nutrition, health, education and adult literacy) and
• Economic vulnerability (based on instability of agricultural production, instability of exports of goods and services, economic importance of non-traditional activities, merchandise export concentration, handicap of economic smallness, and the percentage of population displaced by natural disasters)
Conclusion• Becoming middle income does not necessarily
mean greater spending on health or capacity to spend
• A number of countries would find it impossible to replace instantaneously the current external funding they receive for health if all donors decide to use the WB classifications for providing funding for health
• A continuous index perhaps broader than the HDI to allow a slow phase out of external assistance would be a lot more preferable to ensure affordability of health and health products