Investing in Public Health: Key to 'Compete, Grow, and Stay Secure'

A Message On World Health Day 2025

Introduction

World Health Day 2025, observed on April 7 under the theme “Healthy beginnings, hopeful futures,” underscores a critical but often neglected truth: health is the starting point for all progress. Indeed, as the World Health Organization (WHO) emphasizes on this occasion, “The health of mothers and babies is the foundation of healthy families and communities, helping ensure hopeful futures for us all.”

However, each year we are confronted with a sobering reality: estimates from the WHO suggest that close to 300,000 women lose their life due to pregnancy or childbirth, while over 2 million babies die in their first month of life and around 2 million more are stillborn—amounting to one preventable death every seven seconds.

The pain inflicted by these tragedies is not only personally felt by individuals and families—they represent the social loss of future generations of contributors, caretakers, and innovators. And they come with staggering economic costs: erosion of human capital, weakened labor markets, stunted growth, and diminished productivity. As discussed, in a previous post, the COVID-19 pandemic, the most severe public health crisis in a century, made this link clear. It showed that uncontrolled public health crises and collapsing health systems can quickly paralyze social life and entire economies of unprepared countries.

The key lesson from COVID-19 cannot be ignored: investing in public health is neither an altruistic luxury nor a discretionary expense—it is a strategic necessity at the core of a nation’s ability to compete, grow, and remain secure.

II. Development Begins with Healthy Populations

In a recent Financial Times op-ed ahead of the 2025 World Bank Group–International Monetary Fund Spring Meetings, Ajay Banga, President of the World Bank Group, stated: “Development is how we compete, grow, and stay secure.”

Building on this premise, in this post I argue that development fundamentally begins with people—not solely with roads, ports, or power grids. This is not an either-or proposition. Physical infrastructure must be accompanied by robust investment in human capital—especially in health—to build the capabilities necessary for sustainable progress that benefits all.

Consider the World Bank’s Mission 300—also highlighted by President Banga—which aims to connect 300 million Africans to electricity by 2030. Its success depends not only on expanding access to energy but on the health of the communities it seeks to serve. Without basic healthcare and essential services, populations burdened by malnutrition and disease will be unable to fully benefit from such investments. Public health is not a secondary outcome of development—it is its essential foundation.

This understanding is not new. In The Wealth of Nations (1776), Adam Smith, the father of modern economics, recognized the vital role of public health, drawing a parallel between education and disease prevention. He argued that education “deserve[s] the most serious attention of government; in the same manner as it would deserve its most serious attention to prevent a leprosy or any other loathsome and offensive disease, though neither mortal nor dangerous, from spreading itself among them; though, perhaps, no other public good might result from such attention besides the prevention of so great a public evil” (Book V, Chapter 1, Part III, Article II, p. 994). In doing so, Smith implicitly affirmed that protecting population health is a fundamental responsibility of government—essential not only for individual well-being but also for the broader public good.

History has consistently demonstrated that neglecting public health leads to social and economic collapse. In his book Pathogenesis: A History of the World in Eight Plagues (2023), Professor Jonathan Kennedy documents how infectious disease outbreaks have not only claimed millions of lives but also played a central role in the downfall of civilizations and empires.

If the global community is to heed the lessons of the COVID-19 pandemic, sustained investment in public and veterinary health systems—guided by One Health principles—and universal access to essential medical care must become non-negotiable priorities in national budgets.

Such investments are critical not only to reduce vulnerability to emerging and re-emerging pathogens, but also to address the growing health and fiscal burden of chronic diseases in aging populations. Ultimately, they are indispensable for unlocking long-term economic growth, and enhancing resilience, security, and stability.

III. Health as a Catalyst for Freedom, Opportunity, and Economic Growth

Health investments pay dividends across all sectors. When children are healthy, they attend school regularly and perform better. When adults can access medical care when needed, they are more productive and able to support their families. When women are healthy, they can participate fully in the workforce and civic life.

This is the essence of Amartya Sen’s human development approach in Development as Freedom (Sen, 1999). Sen argued that illness and poor health are “unfreedoms”—constraints that limit a person’s ability to lead the life they value. True development, in his view, is the expansion of capabilities—of which health is basic.

Gary S. Becker, a Nobel laureate in economics in 1992, expanded the theory of human capital to include health, demonstrating how healthier populations are more productive, earn higher wages, and spur sustained economic growth (Becker, 2007).

Research from economists Robert Barro and David Bloom confirmed this. Barro found that a 10% rise in life expectancy could increase GDP per capita growth by 0.5–0.6 percentage points annually (Barro, 2013). Bloom estimated that each additional year of life expectancy leads to a 2–4% rise in GDP per capita (Bloom, 2004).

IMF research explains how health outcomes, such as life expectancy and economic performance (IMF 2017a; Bloom, Kuhn, and Prettner 2018), have a two-way relationship. Although it is difficult to make a causal inference at the macro level (Acemoglu and Johnson 2007), countries with higher GDP per capita tend to have longer life expectancy. The relationship can go in both directions. Improvements in health outcomes (for example, decreased morbidity and mortality) enhance learning, human capital, individual productivity, earnings, and consumption (Bor and others 2012; Cortés and others 2022; García-Gómez 2011; Halla and Zweimüller 2013; Jones, Rice, and Zantomio 2020; Meyer and Mok 2019; Trevisan and Zantomio 2016; Weil 2014). At the same time, higher incomes allow for investments in nutrition, clean water, improved sanitation, and essential health services that are critical to improving health in many low-income countries (Deaton 2013).

As suggested above, the multiplier effect of investing in health is clear and real. This is not social expenditure per se—it is a strategic growth investment.

IV. Fiscal and Economic Resilience Through Health

Public health also builds macro-fiscal resilience. The IMF has highlighted that health investment is “macro-critical” for stability and growth. The pandemic plunged the world into its worst downturn since the Great Depression, revealing that health system failure is an economic vulnerability. As clearly stated in an IMF report during COVID-19, “Pandemic policy is economic policy, as there is no durable end to the economic crisis without an end to the health crisis. It is critical for global macro and financial stability, which makes it of fundamental importance to the IMF and other economic institutions.”

The IMF now factors health system strength into risk modeling, policy advice, and lending programs. Its Resilience and Sustainability Trust (RST), developed with the World Bank and WHO, offers long-term, low-interest financing to countries implementing reforms in pandemic preparedness.

Economically, this shift is grounded in pragmatism. A $15 billion annual global investment in pandemic preparedness, for instance, could prevent trillions in future losses. By contrast, COVID-19 caused a $12.5 trillion loss in global GDP between 2020–2021.

As IMF Managing Director Kristalina Georgieva put it: “Spend what you must to protect health—just keep the receipts.” Because skimping on health now invites crisis later.

V. From Crisis Response to Strategic Investment

The COVID-19 crisis created a pivotal opportunity to shift from reactive to proactive policymaking. Public health and essential medical services must be treated like a critical investment as infrastructure. Just as countries budget for bridges and highways, they must budget for community health systems, supply chains, training health personnel—not as afterthoughts but as core capital investments.

The World Bank, for example, has shifted from pandemic response to long-term health system resilience, focusing on quality primary care, climate-smart infrastructure, and sustainable health financing, as follows:

• Emergency Preparedness and Response. This included building care facilities, upgrading labs and surveillance systems, delivering medical supplies, and supporting large-scale vaccination campaigns.

• Climate-Resilient Infrastructure. Investments have made health infrastructure more resilient to disasters and climate change. Examples include hospital repairs, renewable energy systems to cut fuel use and ensure service continuity, and climate risk assessments to guide infrastructure planning.

• Sustainable Health Financing. The Bank has promoted maintaining health investments during economic recovery and supports the adoption of pro-health taxes to boost revenues and reduce chronic diseases. It also backs reforms to improve service purchasing and expand essential health coverage.

• Strengthening Primary Health Care. Primary health care remains central to building resilience. Support has included expanding digital health systems, improving access through telemedicine, and reducing equity gaps in care delivery.

By engaging the private sector through the International Finance Corporation (IFC), the Bank is fostering public-private partnerships, enhancing regulatory frameworks, and driving innovation in healthcare provision.

Just as importantly, governments are supported to adopt results metrics—immunization rates, maternal mortality, healthcare workforce density—and track them as rigorously as inflation or debt levels.

Going forward, Finance ministries should treat health budgets as generating long-term returns in workforce productivity, social cohesion, and economic resilience. A health-secure country is a competitive country.

VI. The Global Financing Facility: Investing in Women and Children for National Progress

Investing in women, children and adolescents is one of the most impactful actions a country can make. It requires not just political commitment but smart financing tools. That is where the Global Financing Facility (GFF) stands out.

Launched in 2015 and housed at the World Bank, the GFF is a country-led, multistakeholder partnership that helps low- and middle-income countries increase and align resources for reproductive, maternal, newborn, child, and adolescent health (GFF, 2024). Its strength lies in its ability to leverage modest catalytic funds to unlock much larger commitments from domestic budgets, multilateral donors, and the private sector.

Between 2015 and 2020, GFF-supported countries:

• Increased domestic health spending by 15% on average

• Mobilized over $1.7 billion in additional resources

• Delivered improvements in maternal mortality reduction, childhood immunization, family planning access, and more

Unlike traditional aid models, the GFF focuses on long-term system strengthening, better supply chains, equitable workforce deployment, and real-time data.

Crucially, it promotes local ownership. Countries identify priorities, design their own investment cases, and commit to results. This ensures sustainability and alignment with broader development strategies.

As highlighted in a GFF report, every dollar invested yields multiple returns: fewer maternal deaths, more educated children, empowered women, and stronger economies. The GFF is a practical example of how targeted development finance in health can translate policy ambition into measurable, lasting results.

To reach its full potential, the GFF needs sustained support and expansion. It is not only one of the best investments in health—it is one of the best investments in global prosperity and equity.

Conclusion

World Health Day 2025 reminds us that a hopeful future begins with a healthy foundation. Ensuring that every woman and child not only survives but thrives is among the smartest, most cost-effective, and transformative investments any nation can make.

The cost of inaction is high—reflected in lives lost, opportunities missed, and truncated and unrealized futures. Yet, as discussed in previous sections, the returns on investing in public health and essential medical care—especially for women, children, and adolescents—are substantial, fueling economic growth, social stability, and human potential.

On this World Health Day, let us reaffirm our commitment to advancing policies and investments that promote the health and well-being of current and future generations. Health is not just the beginning of life—it is the foundation of human capital, sustainable economic growth, competitiveness, and security.

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