Tonight, the US-President decided to stop funding the World Health Organization (WHO). So let me explain what this means, as I have not only done research on WHO budgeting, but I also took a closer research look at what happened when the US stopped financing UNESCO in 2011 and UNRWA in 2018*.
US total financing in the period 2018-19 for WHO was 14.67% of the total income (source). This included both assessed contributions—that is what you would call membership fees—of US$237 million and, much higher, voluntary contributions of US$656 million (source).
The first consequence of the US defunding of WHO would be that, if the income structure of WHO remained similar to the 2018-19 biennium, the Bill & Melinda Gates Foundation would become the largest funder of the organization. This would be a serious move from multilateralism to “philanthrolateralism“.
The philanthrolaterism shift is however just an interesting aspect of the much wider situation, for example when we look at the WHO situation in light of experiences of UNESCO—the UN’s education, science and culture agency—and UNRWA, the UN’s Palestine refugee agencies.
Both agencies have seen the US cut their funding, and both have sizeable budgets, so they are worth the comparison.
For UNESCO, this happened after 2011, when a majority of member states accepted Palestine to join the agency as a member. This situation at the time did not come announced (because Obama was obliged by US law to make these cuts), but still somewhat unexpected as the organization had hoped the vote to let Palestine join might not be carried in the end.
For UNRWA, this came totally unexpected in early 2018, through a series of tweets by Trump, so the situation is somewhat similar to WHO, even though Trump had already made similar announcements a week or two ago.
In all cases, these massive cuts had direct and immediate consequences for both organizations. As in any public or private organization, all non-essential business has to be frozen quickly, possible cuts have to be made, while the leadership of both agencies—Irina Bukova in the case of UNESCO, Pierre Krähenbühl in the case of UNRWA—turned to crisis management and fundraising mode.
So the WHO administration around WHO Director-General Dr. Tedros will feel the shock pretty fast because the US funding is money that was planned in. Even voluntary contributions that the US might cut—I haven’t seen the details of what Trump’s cuts will mean in practice—may have already been agreed for projects around the world previously.
Cutting assessed contributions means potentially losing voting rights in the future (which happened in UNESCO after two years), cutting voluntary contributions has nothing but political consequences for the US (as happened in the case of UNRWA).
So other WHO member will have to step in in the short run and potentially in the long run if they want WHO to remain at its agreed funding levels. “Agreed budget” in the case of WHO means a baseline budget of ~20% financed from assessed contributions (= states’ membership fees) and then fundraising targets in various budget lines (like communicable diseases, non-communicable diseases, health systems etc.) that should be financed from voluntary contributions from states and other actors like the Gates Foundation.
Hoping that other donors will jump in quickly at the scale of the US cuts may however turn out to be in vain.
Other member states are dealing with Corona at the moment and, as the case of UNESCO has shown, may want to wait for the US to return. The first might mean that some states will be ready to bring in more Covid19-related funding, but might still want to wait with the rest. This is problematic because in the case of both UNESCO (under Obama and Trump) and UNRWA (under Trump) that initial hope never materialized.
Member states are in a dilemma. If they jump in too fast, Trump is off the hook too fast. If they wait too long, WHO will have to cut significant parts of its business. And the majority of that business is not in Geneva, but in regional and country offices around the world.
In reality, if the US sustains its massive cuts to WHO and given the dominance of voluntary contributions in its funding of WHO, it’s worth looking at UNRWA’s reaction to Trump’s massive cuts in 2018 that put the organization at the brink of failure. Filling those gaps required massive fundraising efforts of UNRWA over the course of an entire year while still running its core business (for UNRWA, that’s schools, health centres and emergency operations in Gaza, West Bank, Lebanon, Jordan and Syria).
So the Director-General of WHO, Dr. Tedros, now not only is in Covid19-crisis mode but also has to turn to fundraising crisis mode. That’s a serious overstretch of administrative leadership capacity. This means his entire leadership team might have to turn to double crisis mode, at global and regional level if Trump doesn’t withdraw or limit the US cuts quickly.
Now, WHO is an experienced fundraising organization, and its mandate especially in these times is high on the agenda, so that emergency fundraising might bring in some quick results given that member states currently enlarge their health budgets anyways.
Yet, in the case of UNESCO, the organization ultimately had to adapt over several years to a reduced funding base, which was a painful process with lots of lost opportunities as our research showed. Other donors would not pay the full share of the US losses, so UNESCO had to do less. I expect that this will also be the case of WHO. The question is whether this will mean a reprioritization of WHO’s focus or, as in the case of UNESCO, mostly a cut across all parts of the organization leaving several parts seriously underfunded.
In the case of UNRWA, after an initial waiting period, a few Western donors like the EU, and Germany as well as a few Arab donor, in particular Saudi Arabia stepped in to fill the entire gap left by the US. The consequences to the region of a failed UNRWA would have had serious political, humanitarian and diplomatic consequences, so jumping in by these donors was seen as necessary. But that’s all built on voluntary support, so this is a fragile situation, as it would be for the WHO.
What can we expect for WHO?
If Trump’s cuts aren’t just a mood, and I don’t think they are in an election year, I expect a few governments to jump in, but they won’t cover the bill if the entirety of the ~15-16% US funding of the past falls away.
Who could jump in? China might well take over some of the US funding to WHO that would have gone to Africa. Germany and the EU might take on some of the funding that goes to Eastern Mediterranean as they are invested there. UK, Japan and few others might step in, too. All might step in for a few core funding areas and some might also top up the Covid19-funding.
The fundraising strategy for WHO will be to explain how the US cuts have concrete negative consequences on major other donors in various areas. This is how these donors will sell to their home audiences that they jump in for Trump. UNESCO couldn’t sell that risk very effectively after 2011, so their fundraising efforts did not bring in significant amounts, requiring large cuts. UNRWA was able to do so successfully in 2018.
My guess is WHO would probably be somewhere in the middle.
And whatever others will finance, this will take time to materialize. To Dr. Tedros has to repriorize already available funding, ask some donors to frontload their financing while managing the political and organizational consequences of such cuts and shifts. This will bind political and administrative energy in WHO all across 2020-21.
It will also take its toll on WHO staff who will be afraid of layoffs, who will get extra work (managing more portfolios, increasing fundraising efforts etc.) in a times when so much is focused on dealing with a global pandemic.
So WHO will be in crisis unless Trump comes to his senses (he likely won’t) or if other states jump in quickly.
Experience with UNESCO and UNRWA shows that other countries or donors playing on time, hoping US money would come back soon, will likely not work. In the case of WHO, it might mean waiting until after the US elections. And that’s still a gap of multiple hundred million US$, which Dr. Tedros and his staff will have to deal with.
This is not a morning you want to wake up with when you are working at WHO. If any of the scenarios of UNESCO or UNRWA will come to happen, this will be rough months full of Covid19-crisis and a fundraising crisis. It all depends whether other member states and other donors will see that and will have the financial and political capacity to step in. Otherwise, WHO needs to cut. Fast, and hard. With all the consequences that this has.
*If you want to read more: Here is the chapter in my book on UN budgeting (co-authored with Klaus H. Goetz) covering WHO budgeting; here is my journal article (co-authored with Steffen Eckhard and Sylvia Schmidt) on how UNESCO dealt with the financial crisis following from the US cutting its funding to the organization. The research on UNRWA is unpublished but backed with interviews and lots of data analysis.