Calculations
Home Up Executive Summary Calculations Full report

This web site is not being updated - use Jubilee Debt Campaign instead

The report by JDC and Jubilee Research focuses on the 42 countries listed under the HIPC initiative (of which only 24 have actually reached decision points yet).  In particular it must be noted it does not cover the 52 countries identified within the Jubilee 2000 campaign.

The calculations are divided into two parts:-

bulletPoverty reduction (goal 1)
bulletHealth and education (goals 2,4,5,6)

Please bear in mind that these calculations are of necessity approximations establishing rough orders of magnitude.  

Poverty Reduction

The estimates are based on a standard econometric model which make assumptions about the relationship between growth, poverty and investment. These same models are used/accepted by the UK DFID.

Region per capita growth  total growth investment % GDP
Sub Saharan Africa 5.9% 8.2% 49%
Middle East -N Africa 2.8% 4.7% 33%
East Asia Pacific 3.5% 4.3% 19%
South Asia 3.9% 5.5%
Latin America, Carribean 7.0% 10.2% 48%
East Europe, Central Asia 3.8% 3.9%

 

These investment levels, along with the GDP enable the necessary investment to be calculated for each country. Part of this investment can be financed b y internal savings (taken from the World Bank Development indicators).  The remainder requires external financing,  such as 'Foreign Direct Investment (FDI)', workers remittances etc.

The results are shown in table 1 of the report.  

bulletOverall the financing required is $46bn, of which the current grants and loans add up to $16bn (this assumes no funds are diverted to debt service).
bulletAlmost every one of the 42 HIPCs needs additional investment before having any resources free for debt service.  (The tables do show 4 countries, apparently capable of debt repayments, but in these cases there is good argument to challenge the data on which they are calculated).

Health and Education

Education.  The cost of providing free primary education for all children has been based on estimates made by UNICEF.  UNICEF essentially calculated the number of children needing 'new places' to achieve 100% of education, and then calculating the cost based on existing country costs.  The country data is shown in table 2 of the report.

The figures basically show that

bulletTotal cost for education would be $6,5bn
bulletThe countries currently invest $5.2bn
bulletThe additional investment needed is $1.2bn

 

Healthcare

The estimates for healthcare are based on a study by the 'Global Commission on Macroeconomics and health' chaired by Professor Jeffery Sachs.  The commission identified key interventions required to meet the MDGs

TB treatment The Commission calculated the costs on a country by country basis to meet these key interventions to meet the MDGs, and made adjustment to cover management, the ability of each country to absorb the intervention, quality considerations and substantive (100%) salary increases for staff.
Malaria treatment
Malaria prevention
HIV/AIDs prevention
HIV/AIDs care
HIV/AIDs HAART
Childhood desease related interventions
Vaccinations
Maternity related interventions

 

bulletThe total cost of providing healthcare is estimated at $20bn

Clean water and sanitation

Current estimates are that 1 billion people are denied clean water whilst 3 billion lack adequate sanitation!  

Target 10 of the MDGs is to halve the number of people without access to safe drinking water.  2 million children die each year from water related diseases!

 

Water Vision 21 , has estimated the cost of providing safe water and sanitation as (these are additional, one off costs)

Rural

safe water

$15 

 

sanitation and hygiene

$10

Urban

safe water

$50 

 

sanitation and hygiene

$25

 

bulletThe total cost of providing safe water  would be $2.4bn/a

 

SLUMS

Target 11 - to achieve a significant improvement in the lives of at least 100 million slum dwellers.

The World Bank has estimated that upgrading slum areas in developing countries would cost between 0.2% and 0.5% of GDP.  When the costs of investment in infrastructure is taken into account these figures increase to 1% to 2% of GDP.  Using the lower figure (since the MDG is limited to 100Million) of 1%, the cost of meeting this goal is calculated at $1.7bn/a

Overall Picture/ Summary for Goals 2,4,5,6 -Health and Education

The calculations (above) indicate the cost of providing the services necessary to meet the MDGs on a country by country basis.  To pay for these services, countries can use tax revenues and currently receive grants (aid).

Cost /Revenue for Health and Education

MDG costs
bulletHealthcare $20bn
bulletEducation $6.5bn
bulletWater $2.4bn
bulletSlums $1.7bn

Revenues

bulletTax revenues  $10.2bn (This is tax revenue of $27bn less other, none MDG   costs at 10% of GDP= $17bn -based on work by Joe Hanlon and professor J Sachs$27bn
bulletGrants (at 50% assigned to MDGs) $3.8bn
Deficit in meeting MDGs for Health and Education  $16.5bn - (before meeting Debt service payments)