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At G-8 Meeting, Textile Heiress, Nobel Prize Winner To Propose Private-Public Partnerships To Raise Money for Developing Countries

The AP/San Francisco Chronicle examines the “controversial” plan by fashion heiress Renu Mehta and Nobel Prize-winning economist James Mirrlees to raise money for developing nations by encouraging state governments to match private donations and increasing the amount of oversight wealthy donors have.

The Mehta-Mirrlees plan aims to bolster U.N. donations, even as governments continue to fall behind their commitments “to donate 0.7% of gross national incomes to meet eight” U.N. Millennium Development Goals – a commitment met only by Denmark, Luxembourg, the Netherlands, Norway and Sweden in 2007, according to the AP/San Francisco Chronicle. “Collectively, all U.N. members delivered $103.7 billion, just 0.3 percent of gross national income and far short of the goal of $155 billion,” reports the AP/San Francisco Chronicle.

“What we need to do is come up with a new model, find a new way to meet these targets, on the one hand. On the other hand, we need to make sure that the money is deployed to the maximum effectiveness,” Mehta said. During the G-8 meeting in July, Mehta and Mirrlees hope to convince industrialized countries to match private donations with state aid budgets. The pair speculates that doing so could raise $75 billion because people will be drawn to donate more if they know their contributions will be doubled, despite the current economic crisis. “We see a number of countries cutting back on government assistance … that inevitably makes things more urgent,” Mirrlees said.

Mehta and Mirrlees propose that the funds would move through a newly created private-public organization that would oversee how donations were spent and ensure spending met “the private sector’s performance expectations,” the AP/San Francisco Chronicle writes. Such oversight would increase private sector donations, according to the pair. 

While the Mehta-Mirrlees plan has drawn support from the U.N. Secretary-General Ban Ki-Moon, others are more skeptical of opening the doors to private donors overseeing the money.

“There are so many potential problems and issues with this. The biggest problem is a question of ethics,” said Richard Murphy, director of Tax Research LLP. “Just because you’re rich and you give to charity doesn’t mean you necessarily make better decisions. Also, what if a company that specializes in retroviral drugs says its money must go to HIV funding, to AIDS funding?” Others are concerned about where state aid money would come from and the administration costs associated with the plan (Wardell, AP/San Francisco Chronicle, 5/25).

In a related article about global health funding, the Financial Times explores how the economic crisis combined with “recent critical analyses of multilateral bodies such as the World Bank, and scrutiny under U.S. President Barack Obama of the unprecedented bilateral support provided by his predecessor’s [PEPFAR] and the President’s Malaria Initiative” have generated “a momentum towards improving efficiencies [of global health programs] at a time when budgets are severely stretched.” The article examines recommendations for improving global health programs, including the recent findings of an Institute of Medicine report, which was published last week. This week, development ministers are meeting in Paris this week to discuss alternative ways to raise aid future investment in global health (Jack, Financial Times, 5/24).  

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Filling the need for trusted information on national health issues, the Kaiser Family Foundation is a nonprofit organization based in Menlo Park, California.