WHO slashes budget, jobs in new era of austerity

The decision, taken by health ministers at the WHO annual meeting, follows a call by member states for a more "realistic" budget after a $300 million shortfall last year.

But its partnerships with the private sector and foundations that provide a growing share of voluntary contributions have led activists to fear the WHO's independence could be compromised.

Member states Thursday set the WHO budget for the next two years at $3.96 billion, about 20 percent less than the $4.8 billion first sought by management, officials said. The figure is expected to be formally adopted in the coming days.

"We're going to spend less money on administration and management, so there is a clear cut in that," Elil Renganathan, director of planning, told a news briefing.

Travel, publications and staff will be cut at the WHO Geneva headquarters, which employs 2,400 people. "The general feeling was we need to move toward a more realistic budget," he said.

The WHO led the fight against the 2009-2010 swine flu pandemic. Its core work is to coordinate global programs to tackle diseases from malaria to polio and diabetes.

WHO Director-General Margaret Chan, in a speech to the 193 member states Monday, said the agency was embarking on the most extensive administrative and financial reforms, especially financial accountability, in its 63-year history.

A report this week by independent experts into its handling of the pandemic exonerated the WHO, she said, rejecting claims it helped the drug industry make profits by exaggerating the threat.

ERA OF AUSTERITY

"We have been advised by external experts to accept the financial crisis, not as a temporary disruption to be managed with temporary measures, but as the start of a new and enduring era of economic austerity," Chan said.

Member states led by the United States provide a quarter of the WHO's budget through their assessed contributions.

The rest comes from voluntary donations by members, as well as the private sector and foundations such as the Bill & Melinda Gates Foundation, the Rockefeller Foundation and Rotary Club.

U.S. Health Secretary Kathleen Sebelius told reporters on Tuesday: "The absence of influence by industry groups or political pressure is really critical to making sure that the organization is regarded not only as an effective world leader, but as a transparent organization."

Some 100 campaign groups, including Corporate Accountability International, delivered a letter to Chan Wednesday urging her to address widespread concerns about conflicts of interest regarding global water governance, health and nutrition policy.

Separately, Medecins du Monde (Doctors of the World) staged a demonstration outside the talks Thursday to demand health access for all, under the banner "Health is not a luxury."

The group says the economic crisis has left health budgets at risk and increased inequality, so that poor people in developed countries struggle to pay for health insurance.

It estimates 1.3 billion people, one fifth of the world's population, have no access to basic health care.

(Editing by Tim Pearce)