How healthy is a ‘healthy economy’? Incompatibility between current pathways towards SDG3 and SDG8

The interconnections between health and the economy are well known and well documented. The funding gap for realizing SDG3 for good health and well-being, however, remains vast. Simultaneously, economic growth, as expressed and measured in SDG8, continues to leave many people behind. In addition, international financial institutions, notably the International Monetary Fund (IMF), continue to influence the economic and social policies that countries adopt in ways that could undermine achievement of the SDGs. We examine the incoherence between the economic growth and health goals of the SDGs with reference to three East African countries, Malawi, Uganda, and Tanzania, where our organization has been working with partner organizations on SDG related policy analysis and advocacy work.

In all three study countries, some health indicators, notably infant and child mortality, show improvement, but other indicators are lagging behind. Underfunding of the health sector is a major cause for poor health of the population and inequities in access to health care. GDP increases (as a measure of economic growth) do not automatically translate to increases in the countries’ health spending. Health expenditure from domestic public resources remains much lower than the internationally recommended minimum of USD 86 per capita. To achieve this level of health spending from domestic resources only, GDP in these countries would require an unrealistic manifold increase. External aid is proving insufficient to close the funding gap. IMF policy advice and loan conditionality that focus on GDP growth and tight monetary and fiscal targets impair growth in health and social sector spending, while recommended taxation measures are generally regressive.

The existence of the GDP-focused SDG8 can delay efforts towards the achievement of the SDG3 for health and well-being if governments choose to focus on GDP growth without taking sufficient measures to equally distribute wealth and invest in the social sectors, often under the influence of policies advised or conditions put in place by the IMF. Although the IMF has started to acknowledge the importance of social development, its policy advice still adheres to austerity and pro-cyclical economic development harming a country’s population health. To realize the SDGs everywhere, governments should abandon GDP growth as a policy objective and place more emphasis on SDG17 on global co-operation.