Globalisation on trial: world health warning
David Legge, School of Public Health, La Trobe University, Australia
Summary of the report The Commission was established by the DG of WHO "assess the place of health in economic development" (from the preface). The Commission finds that better population health will contribute to economic development but that the resources available for health care in the low-income countries are insufficient to address the health challenges they face and as a consequence donor finance will be needed to close the financing gap. The Commission identifies three avenues through which additional resources should come; firstly, through debt relief and secondly through the PRSP process (Poverty Reduction Strategy Papers); and third, through discount pricing of pharmaceuticals. The Commission identifies a particular set of disease priorities, in particular communicable diseases and nutritional deficiencies, and a set of corresponding health care interventions. The Commission articulates a set of principles for health system development including: universal access, subsidised community-based financing, ‘close to client’ (CTC) service development and vertically organised disease focused programs (page 79). The Commission affirms the role of the state as a provider of services in poor and middle income countries and cautions against privatisation and widespread use of fee for service payment. The Commission comments on developing country access to pharmaceuticals and the barriers inhering in the patenting system and argues for differential pricing arrangements backed up by provision for generic licensing (mandatory if necessary). Comment Globalisation The Commission relates its findings and recommendations to the crisis of legitimacy of the prevailing regime of global economic governance: "With globalisation on trial as never before, the world must succeed in achieving its solemn commitments to reduce poverty and improve health." (Executive Summary, page 15). The message for the governors of the World Bank, the leaders of the G8 and the members of the Paris Club is simple: the health situation in many developing countries is insufferable; these countries do not have the resources to provide basic health care; poverty and ill-health contribute to social and global instability; globalisation is on trial (indicted on the grounds of poverty and health and under threat through social / global instability); increased funding for health care in low income countries must be found through debt relief and increased aid. The term ‘globalisation’ is used in various different ways and this can be a source of confusion. It is sometimes used simply to refer to the increased volume and speed of international communications, travel and transport. It is sometimes used also to refer to the increased integration of national economies within a global economy. Finally, it can also be used to denote the particular regime of global economic governance and regulation which shapes the way in which economic integration works. (Ocampo (2001) comments: "Although forceful technological and economic processes underly it, there is no doubt that the globalisation process can be shaped, and indeed the form that it has been assuming has largely been shaped by explicit policy decisions.") The commissioners recognise that in some respects ‘globalisation’ might not be so good for people’s health. They cite the brain drain from the Third World; increasing ease of international transmission of disease and the undercutting of local cultural patterns (eg with respect to food) (page 76). In these respects they are using ‘globalisation’ simply to denote increased international movement of information, people and goods. They also cite the international ‘pressure’ to reduce taxes (although do not analyse where this pressure comes from). This could reflect the second or third meanings. However, the construction ‘globalisation is on trial’, appears to reflect an implicit acceptance by the Commission of the third usage. What is ‘on trial’ is the current regime of global economic governance and regulation. In speaking explicitly of a ‘regime’ of global economic governance and regulation I am including the rules articulated through the WTO, the disciplines imposed by the IMF and the World Bank (on developing countries) and through the financial markets and ratings agencies. The ‘regime’ includes also the various forums (official and private) where leaders of governments, banks and corporations meet. It includes the mass media, led by the financial press. It includes the US Defence Department and its supporters in Whitehall and other capitals. The prevailing theology through which the workings of this regime are given some semblance of rationality is neo-liberal economics and more particularly the Washington Consensus. A High Level Advisory Group, advising the Group of 77 developing countries , comments: The development needs and interests of developing countries are only marginally reflected in global economic and multilateral rules and institutions. A consequence of this practice is that there are international mechanisms by which rules can be implemented for the weak countries but not for the strong and the agenda for new multilateral rules and standards is largely shaped by the interests of a few powerful industrialised countries. It is disappointing that a Commission dominated by economists, when asked to comment upon "the place of health in economic development", should have steered so carefully away from any explicit discussion of the ways in which the current orthodoxy regarding development policy is creating the conditions for health stagnation for poor people in the poorer countries. (See for example High Level Advisory Group , Cheru , Crotty and Legge ). However, despite its failure to explicate its analysis, the Commission concludes clearly that the current regime of global economic governance is not generating sufficient resources in the hands of consumers and governments in poor countries to enable them to meet their basic health needs. This is clearly an acknowledgment of the failure of this regime. It is not yielding the economic growth and wealth creation in the poor countries that would be necessary for the most basic health care. The Commission does not even pretend that at any time in the foreseeable future the current regime will allow these countries to achieve basic health care through national economic development. Rather, the Commissioners conclude that the rich world governments, the banks and the pharmaceutical giants must provide the necessary development assistance, debt relief and drug discounts to allow a very basic set of health programs to be put in place. In fact official development assistance (ODA) has been progressively declining over the last decade or more. It is moot whether this report will be able to arrest this decline. More significant is the relative insignificance of ODA as a channel for redistributing buying power from rich to poor. Real economic growth through sustainable production and fair trade is a far more sustainable mechanism for wealth creation. However, there is no analysis in this report of the systematic discriminations against the poor countries that are built into the current global regime of governance of trade, intellectual property, investment, communications and the ways in which these discriminations create the conditions for poor health. The virtuous cycle hypothesis: better health creates economic growth creates better health Rather than discuss the kinds of economic relationships and regulatory frameworks which might enable poor countries to produce and trade themselves out of poverty and towards better health the Commission develops, in some detail, the virtuous cycle hypothesis: better health creates economic growth creates better health. "Health is the basis for job productivity ... [G]ood population health is a critical input into poverty reduction, economic growth and long term economic development at the scale of whole societies. [...] Conversely, several of the great "takeoffs" in economic history - such as the rapid growth of Britain during the Industrial Revolution; the takeoff of the US South in the early 20th century [...] were supported by important breakthroughs in public health, disease control and improved improved nutritional intake ..." (page 32) This story may apply to certain industries in certain places and times. But it is not so simple. In many countries, industries and periods industrial growth has been achieved at the cost of destroying the health and lives of workers. Capital accumulation during the Industrial Revolution in Britain was in part based on using up workers’ health as an input to production rather than as a capital asset. The mines of apartheid-era South Africa exemplify industries across the contemporary Third World where workers’ health is consumed in creating capital, rather than treated as an asset. It is simplistic to argue that there are no contradictions between the policies directed at industrialisation and capital accumulation on the one hand and creating the conditions for population health. Companies recruiting cheap unskilled labour in poor countries with high unemployment, who choose not to invest in occupational health and safety and who refuse to contribute through taxation to education, housing and health care, may be expressing a judgement that workers’ health is a consumable input rather than a capital asset. The reverse may be true in relation to high skill scarce labour. There are contradictions between health and production and they need to be named and the process explicitly regulated either to avoid such contradictions or to find the best compromise. A conceptual edifice based on partial truths such the virtual cycle hypothesis (of ‘health-growth-health’) is irrelevant to real policy making. However, it may be important in the rhetorical domain. We need to be alert to the rhetorical or legitimation function of this document. Disease breeds social instability (and causes US intervention) The Commission is quite explicit in linking social and global instability to poor health as well as poverty: The evidence is stark: disease breeds instability in poor countries, which rebounds on the rich countries as well. A high infant mortality rate was recently found to be one of the main predictors of subsequent state collapse (through coups, civil war, and other unconstitutional changes in regime) in a study of state failure over the period 1960-1994. The United States ended up intervening militarily in many of those crises. (Page 38) It is a bit hard to swallow this picture of the US as global ambulance rather than global bully. In many cases it was US intervention in the first place which created both the poverty and the instability (see Blum ). (It is also hard to pass without comment over the misreading of association for causality reflected in this passage and the misuse of multivariate analysis.) But overlook such quibbles. What is being said here is that immiseration causes social and global instability. This is self-evident. What is more significant is that this commission chooses to underline this link. We shall return to this below. Role of PRSPs in the governance and regulation of the developing countries The Commission recommends that the World Bank’s Poverty Reduction Strategy Papers process be the main instrument through which ODA is to be directed to the ‘up-scaling’ of health systems. Debt relief would presumably also be conditional on satisfactory completion of PRSPs. PRSPs are the new user-friendly version of what used to be structural adjustment packages (SAPs). They remain an integral part of the prevailing regime of global governance and regulation insofar as debt relief and soft loans are conditional upon their completion and approval. The disciplines imposed through PRSPs may include a commitment to (a particular model of) health sector development and women’s education and restrictions on bureaucratic corruption. However, they may also include the kinds of economic reforms dictated by the Washington Consensus (in particular, export oriented production, rapid liberalisation of imports and reduced public expenditure of welfare). Whether PRSPs are part of the problem or part of the solution remains a moot point. (See Wemos, 2001). Instrumentalising population health In its determination to communicate with economists the Commission has presented a very instrumental construction of population health. Health is constructed primarily as an input to economic growth. This construction may well shape the kinds of health system which are created through the PRSP process, focused selectively on the demographics and ‘diseases which are economically significant’. The Commission itself has emphasised the identification of a small number of priorities which are to be addressed through vertically managed programs. Principles for health system development: interventions, vertical programs and CTC Within the framework of the PRSPs the key tool recommended by the Commission is the "intervention". In words that are reminiscent of the 1993 WB report the Commission determines a series of 'packages' of 'interventions'. The interventions will be technically efficient, targeting diseases which are economically significant, will be of demonstrable net social benefit and will stress the needs of the poor. The Commission presents a new health system policy model which they describe as CTC (close to client). However, they also recommend strongly in favour of vertical programming. If this new jargon ‘CTC’ recollects PHC it is the selective PHC of tightly controlled local services constrained to deliver only the officially approved 'interventions'. Social conditions for health or health services The emphasis of the Commission’s report is on health system development and the provision of health services and programs: The epidemiological evidence conveys a crucial message: the vast majority of the excess disease burden is the result of a relatively small number of identifiable conditions, each with a set of existing health interventions that can dramatically improve health and reduce deaths associated with these conditions. There is very little recognition of the degree to which population health is shaped by social conditions beyond the health sector. The politics of the report The Commissioners state that they were asked by the DG to report on "the place of health in economic development". Why? Why not the "health dimensions of economic reform" as in World Health Organisation which might have invited a consideration of the impact of economic policy on health as well as a consideration of health as an input to economic growth? However, even if their commission was to advise on "the place of health in economic development" this did not preclude them from considering population health as an outcome of economic development. Why did the DG structure her commission in this way? Why did she invite the Commission to construct health as an input to economic growth? Why did she include such a strong representation of the Bretton Woods family in the membership of her Commission? (The Bretton Woods family refers to the World Bank and the IMF both of which were born at Bretton Woods in 1944. The WTO was conceived at around the same time but had a delayed gestation; born at Marrakesh, 1995.) Population health as an economic input Perhaps the WHO really does believe that population health is appropriately constructed as an economic input and a determinant of economic growth and that simply demonstrating this to the economists (or inviting them to work through the issues themselves) will persuade them of the importance of the health as an economic input argument and that they will then add their powerful voices to the call for more resources to health. This explanation is not very convincing; it is based on the virtuous cycle hypothesis, see above. Acknowledge the hegemony of the Bank in return for more money for health (and Bretton Woods / G8 support for the WHO) A second possible strategy might be based on a logic along the following lines: WHO has been superseded by the WB as the premier health policy authority; WB is now the dominant development assistance donor globally; confrontation with the Bretton Woods family (over the impact on health of economic policy prescriptions) jeopardises rich country funding of the WHO and the re-election prospects of the DG; a non-confrontational approach to the Bretton Woods family may be more effective, seeking to persuade them of the importance of health using arguments that they will respond to, in particular, advocating the instrumental value of health as an input to economic growth; and endorsing the role of the WB through the PRSPs process as the disburser and coordinator of development assistance (including health sector assistance). How likely that such a strategy would achieve significant improvements in health? Clearly a big injection of resources would make a difference but what grounds are there for expecting that such increases in ODA would be forthcoming? The ascendancy of neoliberalism in the industrialised countries has been such that ODA commands very little policy support. This might be reversed if the policy community centred on the Bretton Woods family and the G8 started to see it as in their interest! Pay up to reduce the risk of instability and delegitimation This raises the possibility that the warnings about the threats to globalisation are more than scene-setting but are part of the substantive message of the report. According to this (more speculative) scenario this report represents the WHO and its economic advisers telling the WB and G8 that the Washington Consensus is under attack as never before; that the cause of this fraying legitimacy is the failure of the Washington Consensus to deliver economic growth and the conditions for health development; that unless the governors of the regime find the resources to at least ameliorate the worst of the health problems of the developing countries (perhaps by more ODA, perhaps by re-thinking the Procrustean brutality of the Washington Consensus) the stability of the regime globally will be jeopardised because of the crisis of legitimacy. Conclusions The report of the Commission on Macroeconomics and Health is an important document. It may prove to be quite influential. Debates around its contents and significance could also provide important opportunities for new thinking and the strengthening of alternative movements. It is a large report and accompanied by a large number of working group reports. The analysis and digestion of such a document requires quite a lot of reading and discussion. It would be good if the wider network of activists and advocates for Third World health could collaborate in such an analysis and in generating responses. References Blum, W. (2001). Rogue State: A Guide to the World's Only Superpower. London, Zed Books. Cheru, F. (1999). Economic, social and cultural rights: effects of structural adjustment policies on the full enjoyment of human rights, United Nations Commission on Human Rights. Commission on Macroeconomics and Health (2001). Macroeconomics and Health: Investing in Health for Economic Development. Geneva, WHO: 210. Crotty, J. (2001). "Neoliberal regime has failed, need to change course." Third World Economics(249): 11-16. High-level Advisory Group of Eminent Personalities and Intellectuals (2001). Report on Globalization and its Impact on Developing Countries. 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