This article assesses the impact of the HIV and COVID-19 pandemics and debt dynamics on health, HIV and pandemic preparedness and response-related financing in developing countries. Using a novel dataset, the study does a cross-national systematic analysis of all data sources available for government expenditures on health, HIV, COVID-19 and debt servicing in selected developing countries.
Inadequate multilateral response and ensuing gaps allowed both pandemics to thrive. Rising and unsustainable debt levels limit the capacity of governments to protect the health of their populations. Government spending is already falling in response to high debt payments. Specifically, debt servicing is crowding out lifesaving investments. In 2020, for every USD 5 available, USD 4 was spent on debt servicing. Only USD 1 was invested in health. This is a binding constraint on countries’ efforts to control COVID-19, or invest in pandemic preparedness and response.
The findings suggest that fiscal policymakers should be concerned about the crowding-out and constraining effects of public debt. To this end, recommendations are made to treat and cancel debt as a critical policy lever to end pandemics in developing countries. It is important to address the growing inequalities and to ensure loans are beneficial, not detrimental.