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Title: Globalisation and health David Legge IPHU (March 2008


1
Globalisation and health
  • David Legge
  • IPHU (March 2008)

2
Purpose
  • To explore the links between population health
    and globalisation (understood as a global
    regime of economic governance)
  • To draw some implications for policy-making and
    for strategy for public health activists

3
Globalisation
  • Global village
  • communications, travel and transport
  • health concerns communicable disease, tobacco,
    etc
  • Global economic integration
  • configuration of economic relationships, stocks
    and flows, dynamics
  • Global regime of governance
  • structures of economic and political control

4
Globalisation as a particular configuration of
economic activity
  • Changing patterns of production and trade,
    financial flows and investment, wealth
    accumulation and income flows
  • global markets, global sourcing
  • foreign direct investment
  • role of transnational corporations
  • increasing size and power of the financial sector
  • changing patterns of production and employment

5
Globalisation as a regime of economic (and
political) governance
  • Formal regulatory structures multilateral
    institutions and agreements (UN, WHO, IMF, WB,
    WTO)
  • Empires, big powers and nation-states
  • Transnational corporations (and peak bodies)
  • Constituencies and social movements
  • Information, knowledges and discourses

6
Formal regulatory structures multilateral
institutions and agreements
  • Bretton Woods Institutions
  • IMF, WB and WTO
  • United Nations system
  • EcoSoc, UNCTAD and UNDP on the economic side
  • WHO, UNAIDS, UNICEF on the health side
  • Public private partnerships in health
  • GFATM, GAVI
  • Various conventions and agreements
  • WTO agreements
  • declarations on economic, political, cultural and
    social rights
  • Kyoto Agreement
  • International Health Regulations
  • Framework Convention on Tobacco Control

7
Empires, big powers and nation-states
  • Governing the regulatory structures
  • WTO negotiations
  • regional FTAs and BITs
  • Occasional direct disciplinary action
  • trade sanctions
  • covert destabilisation
  • armed intervention
  • Development assistance including funding and
    advice

8
Transnational corporations (and peak bodies)
  • Growing in size, increasing number, carrying
    increasing proportion of global trade
  • Global reach national sponsorship
  • transnational but with domestic roots
  • leverage also with other governments
  • communication media (WEF, media, markets)
  • Cases
  • big pharma and IPRs
  • water privatisation

9
Constituencies and social movements
  • Beyond the empire, the nation-states, the
    international institutions and the transnationals
  • More diffused opinion hard to map but still
    influential
  • commonalities, identities, alliances and
    solidarities
  • nationality, ethnicity, class, caste, religion,
    language and race
  • Features
  • rise of global middle class
  • fundamentalism (and the decline of modernity)
  • social movements, eg environmental, womens,
  • solidarity movements, eg Jubilee
  • NGOs and CBOs

10
Information, knowledges and discourses
  • Global power of
  • information, eg health statistics
  • research and analysis, eg DALYs
  • discourses, eg comprehensive PHC,
    cost-effectiveness
  • ideologies, eg neoliberalism, fundamentalisms
  • The information organizations
  • academic and research centres (eg Harvard SPH)
  • discussion fora (eg DAC of OECD)
  • media (eg reports, press coverage, etc)
  • Cases
  • role of the WB in promoting cost-effective
    packages of health interventions
  • role of NGO websites in informing campaigns
    against big pharma

11
Method
  • Review the changing dynamics and regulatory
    strategies regarding the global economy since
    WWII
  • Review some key reports, episodes, phases and
    struggles in global health in the context of
    changing strategies of economic regulation
  • Trace some of the interplay between health issues
    and the wider debates and struggles regarding
    economic regulation
  • Pull some themes from this review which might
    inform policy making and the practice of public
    health practitioners

12
Framing the analysis an economic history
  • 1945-1975 the long boom
  • 1975-85 stagflation
  • 1975 onwards looming threat of over-production
    (post Fordist crisis) and rise of neoliberalism

13
The long boom (1945-1975)
  • The post-WW2 environment
  • need for reconstruction (huge demand)
  • increasing productivity (motor vehicles and cheap
    oil)
  • The boom
  • capital and labour brought together to make
    things and services that people need and are able
    to pay for
  • increasing productivity (associated with new
    technology) frees up labour to make new things
    and to recycle wages as consumption (hence more
    profit, investment and sales)
  • some trickle down to the poor (associated with
    Keynesian policies) and to the Third World
    (benefiting from trade opportunities associated
    with rapid growth)

14
1975-85 - Stagflation and the failure of
Keynesianism
  • Recession (cyclical slowdown on top of structural
    over-production)
  • growing imbalance between productive capacity and
    market demand weakening role of employment in
    recycling wages as consumption
  • Emerging inflation
  • cost of Vietnam war shared with the rest of the
    world because of role of the dollar (leads to
    rejection of glold standard in 1972)
  • increasing price pressures associated with
    growing monopoly power (oil with OPEC, labour
    with strong unions, business with monopolies
    associated with brand names and protected
    technologies)
  • Keynesian counter-cyclical policies ineffective
    but contribute to inflation
  • Keynesian policies increase money supply and
    inflation without boosting employment and local
    business but at the cost of budget deficits and
    inflation
  • Ascendancy of monetarism
  • fight inflation first (because of the costs to
    business of uncertainty)
  • monetarism argues for sole reliance on interest
    rates to control the business cycle
  • but increased interest rates used to control
    inflation at a time when the economy was in
    recession!

15
The debt trap sprung
  • 1973 OPEC price rise oil producers flush with
    cash deposited in banks
  • Banks send salesmen around the world lending
    money at low and negative interest rates
    (negative after taking inflation into account)
  • lending to corporations (but with government
    guarantee) in South America
  • lending direct to governments in Africa
  • 1980 interest rates escalate (peaking at 17 in
    the US in 1981) imposing repayment and servicing
    burdens that many poor countries could not carry

16
From 1980 to the present
  • Two parallel dynamics
  • the continuing dynamic of the long boom
  • the looming threat of post-Fordist crisis
    (jobless growth, structural over-production)

17
The threat of over-production (and
post-Fordist crisis)
  • Where expanding (capital intensive) productive
    capacity (with stagnating employment growth)
    exceeds demand owing to
  • saturated (mature) markets and/or
  • markets with real needs but limited purchasing
    capacity
  • Compensatory mechanisms which exacerbate the
    damage from over-production
  • understood in the corporate world in terms of
    reduced profitability
  • understood in the policy world as falling growth
    rates
  • eliciting a range of corporate strategies and
    policy responses
  • many of which exacerbate the risk of crisis

18
Reduced profitability compensatory corporate
strategies
  • New markets, new products and better marketing
    (incl commodification of family and community)
  • Externalise costs (including to labour and to the
    environment)
  • Increase market power (and capacity to increase
    prices)
  • Consolidate production and increase market share
    through mergers and acquisitions
  • Reduce wages (union busting, relocation)
  • Replace well paid labour with technology
  • These strategies will further reduce demand
    (reduce the role of employment in recycling wages
    into consumption)

19
Slowing growth compensatory policy responses
  • Outsource and privatise public sector service
    provision (new market opportunities)
  • Deregulate environmental controls (converting
    natural capital into recurrent revenue)
  • Force TW countries to open their markets and
    economies (under the slogan of free trade and
    open markets)
  • Cut taxes (in particular, reduce corporate and
    executive tax burden) to compete for new
    investment
  • Labour market deregulation (union busting) to
    reduce labour costs
  • Force repayment of debt from TW countries
  • These strategies further reduce demand

20
Corporate and policy responses
  • Exacerbate the over-hang of productive capacity
    over effective demand
  • Postpone the crisis for the rich world (and rich
    classes)
  • Other unintended adverse consequences
  • destabilise global environment
  • increase unemployment and inequality
  • weaken family and community
  • decay social infrastructure
  • transfer value from South to North
  • two worlds stratification (unified global
    bourgeoisie but fragmented global proletariat)

21
So what prevents the crisis from engulfing the
economy globally?
  • The situation is already critical for millions of
    poorer people (in rich and poor countries)
  • trading regime which enforces the flow of value
    from poor to rich countries
  • policy regime enforces the divide between those
    who participate in the new global economy and
    those who are excluded
  • for these groups the crisis has already arrived
  • However, continued growth globally (albeit
    slower) is supported through
  • growth in China and India
  • commodification of family, community, government
    functions (including health care)
  • unsustainable exploitation of environmental
    services
  • intensified transfer of value from periphery to
    centre (from South to North)
  • growing role of debt in sustaining demand
    (recycling capital as consumption)
  • global support for US consumption (supporting an
    over-valued dollar)

22
Capital recycled as consumption through debt
  • Profits and savings redirected as loans
  • corporate rationalisation (in particular mergers
    and acquisitions) financed through corporate debt
  • household consumption supported through
    increasing debt (recycling profit and savings as
    consumption)
  • Increasing size, wealth, turnover and power of
    the financial sector (banks, insurance, etc)
  • slowing growth so business redirects profit into
    financial sector (as portfolio investment and
    speculation) rather than into new direct
    investment
  • new financial derivatives increase risky lending
    and speculation
  • bidding up of asset values on borrowed or
    non-existent money (asset bubbles) feeds
    consumption expenditure (wealth effect)
  • privatisation of pensions (superannuation)
    redirects billions from tax into savings held by
    private financial institutions (lent on for asset
    speculation and consumption)

23
Global support for US consumption
  • US trade deficit
  • imports exceed exports
  • US traders need to buy more foreign currency than
    they earn
  • should lead to fall in value of dollar making
    US exports cheaper and imports more expensive
  • But China, OPEC and other corporations and
    countries lend to the US (by buying US govt
    bonds) have
  • kept the price of USD high
  • kept US consumption spending high (and inflation
    low)
  • kept the global economy ticking over
  • Up until the sub prime mortgage crisis what
    now?

24
Implications of sub-prime mortgage crisis
  • Extensive use of doubtful collateral (securitised
    debt) to support borrowing revealed
  • Credit squeeze banks withhold credit because of
    exposure
  • Asset bubbles pricked widespread loss of
    wealth likelihood of recession
  • Foreign holders of US Govt bonds sell off or stop
    buying (buy oil futures instead)
  • Value of USD falls
  • Threat of global recession because of
    significance of US market to exporters globally

25
Continuing transfer of value from periphery to
centre (S ? N)
  • Debt repayment
  • role of IMF (and SAP / PRSP) as the enforcer
  • Borrowing (high interest) while generating
    surplus (low interest)
  • One sided trade liberalisation
  • free trade in manufactured goods
  • protectionism for IP and agriculture
  • including escalating tariffs
  • barriers to free trade in people
  • Brain drain
  • Declining terms of trade
  • commodities vs manufactures

26
Free trade - the key to growth and development?
  • Free trade - a catch-all slogan obscuring
    countries and corporations manoevering for
    advantage
  • Regulatory framework defining free trade
    discriminates in favour of the rich North
  • Globalised free trade risks exacerbating the
    crisis of overproduction
  • Protectionism, can have important benefits as
    well as drawbacks

27
Alternative strategies of global economic
management
  • (Really) free trade?
  • Global Keynesianism (UNCTAD)?
  • National self-sufficiency and regional (south
    south) trade (Amin)?

28
Recap exploring the links between health
development and globalisation
  • Purpose
  • to explore the links between global health and
    the prevailing regime of global economic
    governance (globalisation)
  • Method
  • review some key episodes in global health
    policies since WW2 against the
  • changing dynamics and pressures arising in the
    sphere of economic regulation
  • interpreted in the light of the account presented
    of the global economy since WW2

29
Bretton Woods to AIDS/HIV (1944-85)
  • 1944 Bretton Woods (IMF, WB, GATT)
  • 1950s Health development policy DDT, doctors
    and hospitals, population control
  • 1955 Bandung Conference and birth of the
    Non-Aligned Movement (more confident TW voice)
  • 1964 UNCTAD 1 (and G77) leads to call for New
    International Economic Order in May 1974
  • 1973 First OPEC price rise
  • 1977 last case of small pox
  • 1978 Alma-Ata Declaration (PHC, reference to
    NIEO)
  • 1975-80 Onset of stagflation, end of the long
    boom, emergence of monetarism
  • 1981 escalating interest rates, debt trap sprung
  • 1981 Selective PHC (the response to Alma-Ata)
  • mid 1980s onwards IMF develops and imposes SAPs
  • mid to late 1980s rise of AIDS/HIV
  • 1987 Adjustment with a Human Face

30
Break up of Soviet Union to Seattle (1985 - 2000)
  • 1989 Break up of the Soviet Union
  • 1991 USTR attacks Thai administration over
    pharmaceuticals policies
  • 1992 WHO Health Dimensions of Economic Reform
  • 1993 WB Investing in Health (virtuous cycle
    story, SAPs can be compatible with health
    development, new interventionism)
  • 1995 WTO established
  • 1995-98 OECD drive for MAI (note role of NGOs
    and internet but continuing push in WTO under
    Singapore issues)
  • 1997 Sth African parallel import legislation
    passed, challenged (challenge defeated April
    2001, note role of MSF and other NGOs and
    internet)
  • 1999 PRSPs implemented (new and improved SAPs)
  • 1999 WTO in Seattle outrageous process
    dramatic protests
  • Dec 2000 Peoples Health Assembly and Peoples
    Health Charter

31
Treatment Action Campaign to Hong Kong (2000-05)
  • April 2001 Defeat of big pharma in South Africa
    (note role of TAC, MSF and global social
    movements)
  • April 2001 Norway Conference (WHO accepts
    differential pricing)
  • June 2001 CMH Report (warning about health and
    stability virtuous cycle story repeated, CTC
    model and scaled up interventionism reliance on
    increased aid (and GFATM) and PRSPs)
  • Sept 2001 9/11
  • Nov 2001 Doha and the Statement on Public Health
    (especially Para 6 and compulsory licensing note
    rearguard action by US)
  • Oct 2002 Bristol Myers Squib defeated in Thai
    DDI case
  • Mar 2003 Invasion of Iraq (US unilateralism
    widespread opposition limits to US power
    apparent)
  • Oct 2003 Negotiations for US Thai FTA commence
    (at risk compulsory licensing, data access,
    extended IPRs)
  • Nov 2003 Cancun G21China stands up to G7
    deadlock over agriculture and Singapore issues
    US moves to focus on bilateral and regional FTAs
  • Nov 2003 Miami FTAA-lite (US knocked back by
    Latin America)
  • Jan 2004 IMF report critical of US twin deficits
  • July 2004 Framework for Doha Round adopted
  • Dec 2005 Hong Kong Ministerial

32
Against TNA outcomes not inevitable
  • Delegitimation of SAPs
  • Jubilee 2000 and the Drop the Debt campaigns
  • MAI-non!
  • Doha 01 - TRIPS and access
  • Cancun 03 advancing the demand for agricultural
    reform and resisting the Singapore issues
  • Miami 04 resistance to US ambitions for a FTAA
  • Arenas of struggle global regulators
  • Delegitimation and the role of (globalised)
    popular movements
  • Another World is Possible!
  • Emergence of the PHM

TNA There is no alternative (attributed to M
Thatcher)
33
Issues which link health policy with global
economic regime
  • SAPs and nutrition
  • TRIPS and access to drugs
  • GATS and the building of comprehensive PHC
  • Health and fair trade (with special and
    differential treatment)
  • AoA and small farmers loss of livelihood (and
    health consequences)
  • Policy reports (such as CMH) which deny (by
    obscuring) the disease burden created by the
    prevailing regime of economic governance

34
Another world is possible! Another US is
necessary
  • We have
  • reviewed the interplay of economics and health at
    the global level over the past 60 years
  • interpreted the interplay of health and economics
    in relation to a particular story about the
    global economy over this time
  • drawn some conclusions about strategy for global
    health activists
  • Key conclusions
  • recognise, celebrate, learn from and work with
    popular movements for health and economic justice
  • keep global economic in/justice at the centre of
    health needs and health policy discussion
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