World Bank puts on hold a billion dollars for health

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World Bank puts on hold a billion dollars for health

In a setback for the UPA government's flagship health programme, the

World Bank has withheld 350 million dollars of funding for the

Reproductive and Child Health (RCH) project of the National Rural

Health Mission. While the government is going ahead with the project

without the Bank's fiscal support, funding for five more proposed

health sector projects, totalling over a billion dollars, have also

been put on hold by the Bank.

With a view to resolve the crisis that has been brewing since June

2005, Finance Minister P Chidambaram and World Bank President

Wolfowitz have been involved in intense talks.

The first phase of the RCH programme was introduced by the

Department of Family Welfare in 1997, as per a strategy suggested by

the World Bank to bring down child and maternal mortality figures in

the country.

With the first phase implemented by June 2004, the second phase was

being seen as vital to achieving, among other things, India's target

to eradicate polio by 2007. But since June 2005, the World Bank has

stopped funding for RCH 2 and five other important health projects,

including those meant to counter the spread of AIDS and

Tuberculosis.

The reason: in March 2005, the Bank received complaints alleging

fraud and corruption in the procurement of pharmaceuticals for the

RCH Program 1. The World Bank's Integrity Department began an

investigation into these allegations and it's still going on.

The Finance Ministry, admitting certain weaknesses in the

procurement processes, began working closely with the Bank to evolve

an action plan to check the possibility of fraud and strengthening

project governance. With the RCH Program 2 in mind, the Bank and the

Finance Ministry had put in place a Governance and Accountability

Action Plan (GAAP), which was to go to the Bank's Executive Board

for approval in June 2005.

Incidentally, in June 2005, Wolfowitz, the former US Deputy Defence

Secretary took over as the World Bank President. Over the last few

months, the Bank has taken a strong stance against corruption,

canceling or relooking at loans to countries like Chad, Congo,

Kenya, Bangladesh, Argentina.

The government has been telling the Bank to examine all projects, if

it wishes, but not stop the funding altogether. The government has

also welcomed specific suggestions from the Bank to improve project

implementation and monitoring processes.

Funds for these are on hold

• Reproductive and Child Health (Phase 2), implementing agency

Ministry of Health and Family Welfare. Funds: $350 m

• Vector Borne Disease Control Project, Govt of India. Funds: $200 m

• HIV/AIDS III, National AIDS Control Organisation, Govt of India.

Funds: $200 m

• Second National Tuberculosis Control Project, Central TB Division,

Govt of India. Funds: $170 m

• Karnataka Health Systems, Karnataka govt. Funds: $141.83 m

• West Bengal Health Systems,West Bengal govt. Funds: $75m m

http://southasia.oneworld.net/article/view/130226/1/