Mexico Granted $205m Swine Flu Loan From World Bank

Mexico has been granted emergency loans from the World Bank totalling $205m to help cope with the swine flu crisis amid concerns at the Bank that developing countries could be hard hit if the flu spreads to those that are heavily dependent on donor aid.

Mexican finance minister Agustin Carstens said at the weekend that the outbreak could have a big impact on the country's economy, although it was too soon to say how significant the effect might be.

"This issue can have an important impact on the economy, although the most important impact is the one on human life and human well being," he said after a meeting on Sunday of the IMF and World Bank's joint Development Committee.

The World Bank is granting Mexico an immediate loan of $25 million to help with medicine and medical equipment and is to provide a further $180 million to help Mexico set up operations to deal with the outbreak.

On Friday, the World Bank released a report voicing serious concerns that the economic downturn was already impacting on healthcare in the poorest countries.

According to the Human Crisis report, eight countries have already experienced problems buying enough Aids drugs to keep their pharmacies stocked – a potential disaster in the making, since if patients cannot get the drugs, the virus in their body will become resistant to the residual traces and those drugs will no longer work for them. They may also spread drug-resistant strains of HIV.

The Bank also warned of spikes in anemia in Russia and parts of Asia as funding for health drops down the list of priorities in a time of economic difficulty. It also voices concerns about reductions in antenatal clinics offering check-ups for pregnant women. African countries are particularly reliant on external donors - 23 countries depend on foreign aid for more than 30% of their total health spending, so maintaining donor aid flows is vital during a crisis to safeguard health services, the Bank says.

In Rwanda and Ethiopia, foreign aid donors subsidize more than 50% of total government budgeted health spending. Governments have used this aid to expand their health services but they are highly dependent on uninterrupted

aid flows aid to keep health services available to people, especially the poor and most vulnerable.

Evidence from previous economic crises in Argentina, Indonesia, Thailand, and Russia showed that the downturn forced cuts in health budgets and services, and that it took many years to get health spending back to pre-crisis levels.