BACKGROUND:

Eliminating IMF and World Bank-promoted User Fees for Primary Health and Education

In many of the worldâs impoverished countries, the imposition of user fees for basic education and health care has locked the poorest people out. User fees have led to increased illness, suffering and death when people cannot pay for health services, and decreased school enrollments when poor families can no longer afford to send children to school.

A recent UNICEF paper [Jan. 2000: Absorbing Social Shocks, Protecting Children and Reducing Poverty] quotes a study in Zambia. A researcher witnessed the arrival of a 14 year old boy at a hospital, suffering from acute malaria. His parents were unable to pay the registration fee of ZK300 (33 cents US) and the boy was turned away. The report added that, ãwithin two hours the boy was brought back dead.ä

What are user fees?

User fees are fees imposed for health care or education (e.g. school fees, fees for textbooks; fees for using a health clinic). Often these services were previously provided for free or at nominal cost. In many cases, these user fees for services have been strongly promoted or even required by the World Bank and International Monetary Fund as a condition for new loans and debt relief.

The World Bank (working with the IMF) has aggressively promoted user fees since the late 1980s and more recently has pressed central governments to give local governments the responsibility to deliver basic services such as health care. As a part of this ãreformä, local governments are then forced to raise revenues through new charges on basic services. In a 1998 internal review of the World Bankâs Health, Nutrition and Population (HNP) lending, the Bankâs Operations Evaluation Department reported that 40% of all projects in HNP portfolio÷and a shocking 75% of projects in sub-Saharan Africa÷included the establishment or expansion of user fees. User fees are now often referred to as ãcost sharingä or ãcommunity financingä, but they still mean people no longer being able to afford health care or school.

User Fees: Much Pain and Little Gain

CLAIM: User fees have been promoted as a needed source of revenue for health care and education.

In reality, user fees generate only a small portion of budgets while disproportionately excluding the poor. The World Health Organization has reported that user fees generally provide only a very small portion of health budgets, rarely more than 5%, yet they disproportionately impact poor people÷reducing their access to vital services. UNICEF has concluded: user fees collect very modest amounts of money compared with the budgetary resources allocated to basic social services; and user charges frequently result in sharp reduction in use of services, particularly among the vulnerable, the marginalized and the poor.

School fees have led to reduced school enrollment, especially for girls. When Malawi eliminated a modest school fee in 1994, primary enrollment soared by 50% almost overnight÷from 1.9 to 2.9 million pupils. When Uganda recently eliminated school fees, the primary school enrollment rate climbed from 50% to 90%.

In Tanzania, Jubilee 2000 U.K. reports that primary school fees were introduced for the first time in 1999÷and included as part of the HIPC debt relief agreement. According to the Evangelical Lutheran Church of Tanzania, less than half of the projected revenue from school fees has been collected÷because families simply cannot pay. All that user fees have succeeded in doing is reducing the access of the poor to school.

CLAIM: User fees have been promoted as a means of building community ãownershipä.

One problem is that user fees are often used to cover administrative costs for the government and may not translate into direct improvements in services at the local level. UNICEF states that ãuser fees do not guarantee greater efficiencyä. According to UNICEF, ãSeldom are user fees invested in quality-enhancing interventions. Most often, they substitute for funding from the central ministry.ä

Exemptions for the Poor Donât Work

CLAIM: The negative impacts of user fees are supposed to be ameliorated by exempting the poorest.

According to UNICEF, remarkably little evidence exists on the effectiveness of exemption systems.

UNICEF cites a study which found that exemption schemes for health in sub-Saharan Africa are not only rare, but they are also implemented in informal and ad hoc ways. This survey showed that exemptions based on the ability to pay are extremely uncommon in practice. The decision to exempt is often left to the discretion of local service providers, while the characteristics of the poor are generally not defined in a clear fashion. UNICEF further points out that if financial incentives or staff performance are linked to successfully collecting fees, as they have been in many countries, then there can be a direct trade-off between the goal of revenue collection and that of reducing the negative impact of user fees on the poor.

Many poor donât know about exemptions or donât bother to try to get an exemption because of administrative barriers. For example, in Zimbabwe, claims for exemption had to be submitted in person to social welfare departments in municipal centers, and lengthy forms had to be filled out. Finally, exemption schemes can be stigmatizing and dehumanizing, and so individuals may fail to make use of exemption criteria even where available. UNICEF says there is widespread evidence of this.

Even the World Bank has acknowledged that these exemption systems seldom work in practice. The World Bankâs Operations Evaluation Department (OED) reported in 1998 that few health project loan documents include details about how the poor will be exempted; nor do evaluations provide much evidence about whether the poor have been exempted. The OED commissioned a set of country case studies. In Zimbabwe, it was found that fewer than 20% of the eligible poor ended up receiving individual waivers for health user fees. In Mali, on site visits, the OED team found no examples where waivers had actually been granted. In a reply letter to a member of the U.S. Congress dated September 29, 1999, World Bank Vice President Eduardo Doryan said, ãExperience in and since the 1980s has shown that the poor have not been effectively protected in many cases [from user fees]. Planning for new or higher fees has frequently outstripped adequate protection and implementation of exemptions and safety nets.ä

Bank Promises Have Made No Real Difference

CLAIM: The World Bank and IMF are aware of the problems surrounding user fees for basic services and are addressing them. There is no need for Congress to act.

Over the last three years, World Bank President James Wolfensohn has stated publicly in a series of meetings with members of Congress that the Bank no longer promotes user fees for basic health and education services. However, under the Bankâs Sector-Wide Approach programs (SWAPs) in health, national governments continue to be encouraged to delegate responsibility for managing and financing basic services to local communities. This is called ãdecentralizationä and ãcommunity financing.ä These SWAPS often include user fees for services.

The IMF and World Bankâs 1999 Preliminary Document on the Initiative for the Heavily Indebted Poor Countries for Tanzania (the HIPC debt relief agreement for Tanzania) contains sections on implementing user fees for basic education and for health care. Regarding education, the HIPC document states: ãthe implementation of the Basic Education Master Plan (BEMP) would be consistent with the changes being introduced by the decentralization policy. The introduction of the education levy [school fee] is planned for October, 1999, with a view to expanding contributions by parents.ä Jubilee 2000 U.K. reports that primary school fees were introduced to Tanzania for the first time in 1999. On health, the HIPC document sets as a goal: ãextend(ing) cost sharing [user fees] at the level of dispensaries and health centers to more districts in a phased manner.ä

In Mozambique, in advance of a debt relief agreement, the government was required by the World Bank to increase revenues for health care from private sources and, as a result, the parliament of Mozambique passed a law that will raise charges for health care services. Yet, even before the recent floods, only 40 percent of the population had access to health care services (Jubilee 2000 UK).

The Impacts of User Fees

Zimbabwe: UNICEF reported in 1993 that the quality of health services had fallen by 30% since 1990, twice as many women were dying in childbirth in Harare hospital as before 1990 and that fewer people were visiting clinics and hospitals because they could not afford hospital fees. Attendance at one clinic in Northeast Zimbabwe went from 1200 in 3/91 to 450 in 12/91 following imposition of user fees. In her book, Faith and Credit, author Susan George quoted a British charity which reported girls going into prostitution in order to pay school fees.

Ghana: The Living Standards Survey for 1992-1993 found 65% of rural families said they could not afford to send children to school consistently. Furthermore, 77% of street children in the capital city of Accra dropped out of school because of inability to pay fees.

Kenya: The introduction of fees for patients of Nairobiâs Special Treatment Clinic for Sexually Transmitted Diseases (STDs) resulted in a decrease in attendance of 40% for men and 65% for women over a nine-month period. Failure to treat STDs can significantly increase the likelihood of transmission of HIV/AIDS.

The Human Costs of User Fees (Excerpts from Dying for Growth, 2000, Common Courage Press):

Illness forced 43 year old Okoso to leave his job at a Ghanaian gold-mining company. Just three months later, his familyâs funds exhausted, he stopped going to the local clinic. ãIf I went to the clinic,ä he said, they would make me pay this new fee which, frankly, my family and I cannot afford. I have no work, no salary. We live day to day on what my wife can make selling vegetables in the local market or what my sons can bring home from selling things on the streets. Some days we eat only one meal and we often go to bed hungry.ä

Demba Djemay is a nurse in an understaffed and under-equipped clinic in Senegal. ãUnder these conditions,ä he said, ãI simply cannot provide my patients the kind of care they urgently need.ä He can write a prescription, but he said, ãMost patients would have to trade away the familyâs food supply to purchase the medicines. Many have already sold livestock to pay for their transportation to town and hospital admission fee. So often after losing a day or more of work, patients go home empty-handed.ä