As health aid declines, Pacific countries face growing financing challenges

The Pacific region is highly vulnerable to multiple, compounding health challenges, including climate-related shocks, disease outbreaks, high rates of non-communicable disease, and shortages of health workers. In the past decade, the region has seen outbreaks of avian influenza, Middle East respiratory syndrome (MERS), dengue fever and a range of other emerging infectious diseases. In addressing these risks, the region contends with unique structural challenges as they must deliver health care across dispersed islands. This results in higher transport costs and access to fewer specialist services, challenges compounded by the fact that many Pacific countries are Small Island Developing States.

Strong and resilient health systems are the first line of defence against global health threats, with primary healthcare playing a particularly critical role. Recognising this, development cooperation providers in the region have worked together for many years through shared strategies and coordinated action, including during the COVID-19 crisis. This deep commitment to international cooperation reflects the unique circumstances and vulnerabilities of the Pacific region, where coordinated approaches are key to improving health outcomes and combatting threats to global health security. 

All Pacific countries are projected to see reductions in health aid by 2026. OECD projections find that net official development assistance (ODA) is projected to fall again by 6.9% in 2026, with the health sector facing the deepest cuts. As previously stated, almost a third of health spending across developing countries in the region was funded by external sources in 2023.

This will hit health systems in the Pacific, with net ODA for health from DAC member countries  in the region projected to decline by 16% in 2026 compared to 2024. While the Pacific's projected decline is modest relative to other regions, these cuts will have significant implications given the Pacific health systems' higher reliance on external financing.

Papua New Guinea (−18.6%) and Tokelau (−17.5%) face the largest declines in percentage terms, followed by Kiribati (−16.9%), while Vanuatu, Samoa, the Marshall Islands and Tuvalu are also projected to see reductions of 15% or more. Compounding this challenge, several Pacific countries are expected to graduate from ODA eligibility in the coming years, requiring new strategies for transitioning to other sources of financing and new approaches for international co-operation.

ODA funding is only part of the picture – private investment to the region has been volatile, and in the past only a small fraction of private finance mobilised for health has reached the Pacific. As the overall aid envelope shrinks, the financing available to build preparedness in a region uniquely exposed to global health threats will also reduce. 

However, OECD analysis for the 2026 Pacific Heads of Health Meeting also highlights opportunities for countries and development partners to build on existing collaboration to reinforce Pacific-led regional health strategies. By working closely with partner countries and other providers, it should be possible to minimise funding shocks and propose alternative strategies. This will also help to strengthen regional solidarity and security as the Pacific region continues to deliver the 2050 Strategy for the Blue Pacific Continent.

To better inform and complement regional initiatives, including those emerging across the Pacific, it is essential to strengthen transparency around international health financing and develop a clear understanding of funding flows.

Read the recent OECD analysis prepared for the Pacific Heads of Health Meeting for more information on how projected aid cuts to health for Pacific countries are compounding existing challenges, and how the OECD is working with governments and development partners to deliver a shared understanding of development finance data.