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Globalisation and health

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Title: Globalisation and health


1
Globalisation and health
  • David Legge
  • IPHU (September 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 health activists

3
Globalisation
  • Global village
  • communications, travel and transport
  • health concerns communicable disease, tobacco,
    etc
  • Global economic integration
  • trading relationships
  • money flows
  • ownership and control
  • Global regime of governance
  • economic, political and military power

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 (and trickle down)
  • 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
  • emergence of jobless growth weakening role of
    employment in recycling wages as consumption
  • Emerging inflation
  • Keynesian counter-cyclical policies deployed to
    contain the slow down ineffective (because slow
    down structural, not cyclical) but contribute to
    inflation because increase money supply and
    inflation without boosting employment and local
    business but at the cost of budget deficits and
    inflation
  • goods and services for the Vietnam war sourced
    from outside the USA paid for in dollars (because
    of the international status of the dollar) flood
    the world with dollars (increase of global money
    supply) lead to inflation and depreciation of the
    dollar (leads to rejection of glold standard in
    1972)
  • increasing price pressures as different players
    seek to defend against price increases fought out
    through various forms of monopoly power (oil with
    OPEC, labour with strong unions, brand names and
    protected technologies)

15
Ascendancy of monetarism
  • Monetarism defeats Keynesianism
  • Monetarism argues for sole reliance on interest
    rates to control the business cycle
  • and argues forfight inflation first (because of
    the costs to business of uncertainty)
  • but increased interest rates used to control
    inflation further slows the economy at a time
    when it was already in recession

16
The Debt Trap
  • The trap set
  • 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
  • The trap sprung
  • 1980 interest rates escalate (peaking at 17 in
    the US in 1981) at a time of recession, imposing
    repayment and servicing burdens that many poor
    countries could not carry
  • the 1980s as the lost decade

17
From 1980 to the present
  • Two parallel dynamics
  • the continuing dynamic of the long boom (eg China
    and India)
  • the continuing threat of post-Fordist crisis
    (jobless growth, structural over-production)
  • Further contingencies
  • climate change
  • peak oil

18
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

19
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)

20
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

21
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)

22
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)

23
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)

24
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?

25
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

26
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

27
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

28
Alternative strategies of global economic
management
  • (Really) free trade?
  • Global Keynesianism (UNCTAD)?
  • National self-sufficiency and regional (south
    south) trade (Amin)?

29
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

30
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

31
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

32
Treatment Action Campaign to Hong Kong (2000-08)
  • 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
  • Feb 2008 Sub-Prime Crisis breaks
  • Sept 2008 Report of WHO Commission on Social
    Determinants

33
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)
34
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

35
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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