Investing in Indian health care will bolster AIIB’s global ambition

Name: India and China attempt to de-escalate border tension after deaths
Uploaded: 2020-08-16T13:00:19.000Z
Duration: 2 min 13 s
Description: India and China attempt to de-escalate border tension after deaths

Given Sino-India tensions, if AIIB agrees to finance India’s ambitious health sector overhaul, it would distance it from Beijing’s foreign policy goals

It could also set a precedent for development banks to lead the financing of health care reforms across Asia

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A yoga session at the men’s ward in the Covid-19 Care Centre set up at the Commonwealth Games Village Sports Complex in New Delhi, India, on July 30. India’s needs major reforms, and quickly, for its health care system to cope with Covid-19. Photo: Bloomberg

Sophie Zinser

Published: 9:00pm, 16 Aug 2020Updated: 10:26pm, 16 Aug 2020

Despite the turbulent Sino-India relationship, Chinese investment may soon provide critical support to India’s pandemic-ravaged health infrastructure.

India’s finance ministry recently discussed an US$8 billion national health infrastructure project with the Beijing-based Asian Infrastructure Investment Bank (AIIB), World Bank and Asian Development Bank. If the deal is signed, the AIIB may have a significant stake in one of India’s most ambitious public sector projects: ameliorating its crippled health infrastructure.

With over 2.4 million confirmed cases of Covid-19 in India, state governments are struggling to provide the mandated health care. Neighbouring countries such as Indonesia and Sri Lanka spend more on health care annually, as a percentage of their gross domestic product, than India, which spends a mere 1.28 per cent of GDP. With only 8.5 hospital beds and eight physicians per 10,000 citizens, and about 80 per cent of the population lacking health insurance coverage, India will only see Covid-19 wreak more havoc unless major reforms are undertaken quickly.

The proposed US$8 billion dollar health system overhaul hopes to stimulate economic activity, increase jobs across the health care and pharmaceutical industries, and finance innovative tech-based solutions to India’s health challenges.

The timing of such an historic deal could not be more critical. This is the worst moment in relations between China and India in decades. Intensified aggression across the Himalayan border region that began in May amplified into a violent June 15 skirmish that left questions looming over the future of the relationship.

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India and China attempt to de-escalate border tension after deaths

Last week, the fifth round of bilateral military talks since the deadly June clash stalled, as Indian troops prepared for long-haul negotiations with Beijing deep into the winter months. These recent issues build on a long history of tensions between India and its rival Pakistan (China’s ally), and in the Kashmir region where India, China and Pakistan all claim territory.