Public–private partnerships in the health sector: the case of Iraq
by Geoff Prescott and Lara Pellini, Merlin April 2004

Public–private partnerships (PPPs) are fast becoming the dominant method of tackling large, complicated and expensive public health problems in post-conflict and unstable settings such as Afghanistan and Iraq. They are seen as ‘win-win’ arrangements in which diverse actors – with often varied, sometimes conflicting, motivations – work together to contribute to health development.

In principle, there is no reason why a PPP should not be effective, provided it is established on the premise of a ‘partnership’. In the quest for a standard definition of partnership in a PPP, there are signs of convergence on common elements: the mutual recognition of comparative advantages; cooperation and coordinated planning; transparency; and cost-effectiveness.

These general conditions are necessary for the existence of a partnership, regardless of its nature. However, for a partnership to be successful in the delivery of humanitarian aid in countries under occupation (like Iraq), there are further specific conditions that need to be met: legitimacy, legality and an understanding of critical cross-cultural issues.

Merlin’s work in Iraq began in December 2002, when it carried out health assessments in the north of the country and in Baghdad. By mid-February 2003, Merlin had established a coordination base in Amman, Jordan. The agency has since assessed around 200 health centres in the Baghdad region, and continues to support facilities in the capital in cooperation with the Iraqi Ministry of Health.

This article summarises Merlin’s experience in Iraq. It argues that both the general and the specific conditions for PPPs are yet unmet, and raises questions as to whether Iraq is a good setting in which to experiment with PPPs on such a large scale.

Why PPPs?

According to UNDP Associate Administrator Zephirin Diabre, speaking at the World Summit on Sustainable Development in Johannesburg in 2002: ‘the summit’s recognition of the private sector as a genuine development partner is significant, especially regarding the issues of capacity building, technology transfer and development financing.

Public–private partnerships will be critical in the coming months, and the UNDP will have to increase its efforts through the existing Public-Private Partnership Programme and other mechanisms’.

The notion of public and non-profit organisations working jointly with private companies to establish, deliver and manage essential services is well-known in a number of sectors, and is being actively promoted in the reconstruction of the health sector in post-conflict settings. PPPs are seen as a panacea for resource-constrained governments that can no longer provide public services solely from their national budget.

Particular advocates of this approach include the World Health Organisation (WHO) and the World Bank, which is a partner in the Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM). This fund is an independent PPP working to increase global financing to combat these diseases.

PPPs in Iraq

The prime US Agency for International Development (USAID) contracts in post-war Iraq (valued at $900 million) were awarded to US for-profit companies to repair and reconstruct water systems, roads, bridges, schools and health facilities in what the Wall Street Journal called the largest government reconstruction effort since the Second World War.

The private sector has been asked to apply its skills and resources to services that have traditionally been provided by the Iraqi government. The bidding process has, however, been criticised for including only a handful of companies, none of which is based outside the US. Private contractors have secured lucrative contracts from the Coalition Provisional Authority (CPA), and seem unwilling to cooperate with the Iraqis and/or the local authorities towards the establishment of a partnership. Examples of this lack of cooperation as they relate to the fundamental components of a successful partnership are described below.

1. Comparative advantage

The first component of a successful PPP is the recognition of the comparative advantages of the players within the partnership. Yet with key aid donors not making funding decisions in favour of the Iraqi authorities until November 2003, and others disinterested in installing the framework of support for NGOs and international organisations such as the UN, this component has been lacking from the beginning. As a result, at the beginning of the reconstruction period there were more than 100 NGOs operating in Iraq. Now, there are fewer than 50 permanent delegations and only one major international organisation. This is due primarily to a lack of ‘neutral and impartial’ funding and security issues, combined with the difficulties encountered in working with the CPA and the private sector.

2. Cooperation and coordinated planning

The second key component of partnership is cooperation and coordinated planning. With some private contractors, Merlin has encountered strikingly uncooperative attitudes towards the Iraq Medical Assistance Committee (IMAC), the joint CPA/Ministry of Health responsible for authorising medical assistance programmes, and towards the NGO Coordination Committee in Iraq (NCCI). Some contractors also seem to have ill-defined remits. During the early post-war period, this caused confusion within the CPA and UN agencies, such as the WHO, over who was doing what, leading to delays in evaluating the health situation and in response planning.

Lack of collaboration and transparency between private contractors and humanitarian agencies has resulted in duplication of effort and unnecessary competition over responsibility for rehabilitating health facilities. Forums such as IMAC, which is hosted by the CPA, have not helped to persuade some private contractors into greater collaboration. In such a situation, it is difficult to establish trusting partnerships or to have confidence in the conduct of other parties.

However, this pattern is not universal. Merlin also has experience of a contractor which has been cooperative, open and proactive in presenting its plans, and in coordinating with NGOs, the Ministry of Health. Due to its high visibility and collaborative approach, this company has a more positive relationship with NGOs, the local population and the Iraqi health authorities. Indeed, it also provides grants to NGOs – both international and local – working in the health sector in Iraq.

3. Transparency

This is the third key component of partnership. It is a matter of public record that most NGOs present themselves as separate and independent of the CPA and coalition as any other stance would jeopardise their neutrality. This is done to increase the likelihood of having a transparent and trusting relationship with Iraqi interlocutors. As charities, most NGOs accounts and affairs are matters open to the public.

Given that the USAID contracts were given to companies in a closed-bid process, away from public scrutiny, it is no surprise that transparency is a word not well applied to the PPP experiment in Iraq.

4. Cost-effectiveness

The fourth key component of a successful PPP is cost-effectiveness. Systems to measure impact, utilisation and health status are not yet in place in Iraq. Presently, therefore, cost-effectiveness is hard to assess. What certainly seems in doubt, however, is whether cost-effectiveness is being used as a major criterion by PPPs in Iraq. Very little effort has been expended by anyone, other than NGOs and the WHO, to work with the Iraqi Ministry of Health to objectively ascertain impact and outcomes.

Legitimacy, legality and cultural questions

Tensions between the public (non-profit) and private sectors in Iraq have been exacerbated by divergent philosophies and by the harsh security environment since the end of the war. To go some way towards addressing these issues, this article suggests three additional conditions that PPPs should meet if they are to be effective in the delivery of humanitarian aid in countries under occupation. These are legitimacy, legality and the understanding of cross-cultural issues.

1. Legitimacy

Legitimacy hinges on the consent of the population, however represented or governed, and is therefore distinct from legality. In the absence of consent, legitimacy can be bestowed de facto by acquiescence. Questions of legitimacy are hard to substantiate, but the public is believed to perceive private contractors as profiteering and supporting the occupation, and therefore lacking the legitimacy to operate in Iraq.

NGOs are faced with the same legitimacy issues when implementing humanitarian work without the consent of the beneficiaries. Indeed, it is this lack of expressed consent that leads NGOs to strive for greater neutrality and impartiality, as this is assumed de facto to lead to consent and thus legitimacy. Being associated with the coalition forces and the civil–military administration may jeopardise neutrality and security, and ultimately the delivery of humanitarian aid itself.

These tensions would be resolved if private contractors gained legitimacy from the public and worked together with the local authorities. This would facilitate cooperation, enabling NGOs to work in partnership with the local authorities and indirectly with the private sector, without facing neutrality issues.

2. Legality

Legality is a thorny issue, though no doubt lawyers are studying the Hague and Geneva laws closely. The Hague Regulations stipulate that public property may be administered by an occupying power, but only under the rules of usufruct (Article 55). Proceeds from such property (e.g. Iraqi oil wells) should be used for the benefit of the local population and, to some extent, to cover the cost of occupation. In other words, the Hague Regulations do not self-evidently justify large profits for foreign private contractors.

3. Cultural issues

As for understanding of cultural issues, most contractors had no previous experience of Iraq and seem to have a poor understanding of the country’s health needs, looking to the WHO and others for guidance as to what they should be doing. It is questionable to what degree the complex mosaic of Iraqi religions, clans and history has been taken into account when designing services and consultation exercises.

NGOs and the UN on the other hand have expertise in, and share an established framework for, delivering humanitarian relief to people forcibly displaced or otherwise affected by conflict, natural disaster and oppression. With many years’ experience working in a multi-agency environment, they maintain culturally sensitive methods of work, including beneficiary participation in programme design. Despite this, the coalition administration largely marginalised experienced international relief organisations in favour of the at the time non-functioning private sector.

Profits and partnership

Private contractors will seek to make a profit. Are they really motivated to provide a culturally sensitive and appropriate health system to respond to Iraqis’ needs? Do these contractors intend to impose their idea of health reform, based on US healthcare models, bypassing the Ministry of Health and the general public’s will? An effective PPP should be based on mutual recognition of comparative advantages, transparency, cost-effectiveness and coordinated planning. In addition, in occupied countries, the parties should operate within a framework of legality, legitimacy and sensitivity to contextual and cultural differences. Like it or not, PPPs have become established as a method of providing humanitarian and now development relief in Iraq.

Yet, so far, they have had a chequered record in assisting and supporting the beneficiaries. The key components of PPPs were not adequately in place in Iraq – is there still time to learn from these mistakes?

Geoff Prescott is Chief Executive of Merlin. Lara Pellini is on placement as a Public Affairs Officer at Merlin. Their e-mail addresses are: hq@merlin.org.uk; and Lara.pellini@merlin.org.uk.

References and further reading

K. Buse and G. Walt, ‘Global Public–Private partnerships: Part 1 – A New Development in Health?’, Bulletin of the World Health Organization, 78(4), 2000, pp. 549–561.

K. Buse, ‘Partnering for Better Health? Ensuring Health Gains through Improved Governance: A Strategy for WHO’, Bulletin of the World Health Organization, forthcoming.

G. Kelly and P. Robinson, ‘A Healthy Partnership: The Future of Public Private Partnerships in the Health Service’, paper presented at the Third Global Forum for Health Research, Geneva, 1999.

Michael R. Reich, Public–Private Partnerships for Public Health (Cambridge, MA: Harvard University Press, April 2002).

R. Ridley, W. E. Gutteridge and L. J. Currat, ‘New Medicines for Malaria Venture: A Case Study of the Establishment of a Public Sector–Private Sector Partnership’, paper presented at the Third Global Forum for Health Research, Geneva, 1999.

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