Macro economics and health development - PowerPoint PPT Presentation

Loading...

PPT – Macro economics and health development PowerPoint presentation | free to view - id: aa8de-OTU3Z



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

Macro economics and health development

Description:

Macro economics and health development – PowerPoint PPT presentation

Number of Views:116
Avg rating:3.0/5.0
Slides: 39
Provided by: latro
Category:

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Macro economics and health development


1
Macro economics and health development
  • David Legge
  • School of Public Health, La Trobe University

2
Conflicting interpretations of the links between
health and economic development
  • Virtuous cycle (World Bank, 1993 and CMH, 2001)
  • economic growth creates the conditions for better
    health (improved living conditions, better health
    care)
  • better population health contributes to economic
    growth (eg hookworm in the Southern states)
  • therefore give priority to economic development
    (growth) and improved health will follow
  • Health consumed in generating profit (Engels,
    1852)
  • profits maximised by externalising the costs of
    production to the household, the environment, the
    municipality
  • peoples health is converted into profit through
    occupational illness and injury, environmental
    degradation, loss of livelihood, tobacco disease
  • therefore the composition of economic growth and
    the distribution of costs and benefits need to be
    regulated

3
What are the questions that health policy
analysts need to ask?
  • Clearly patterns of economic development have
    major implications for population health
  • Clearly the links between population health and
    economic development are complex

4
Questions for health policy analysts
  • How shall we make sense of the relationships
    between economic regimes and peoples health?
  • How shall we understand the links between policy
    and power in shaping economic regimes?
  • How shall we engage in the shaping of economic
    policy and economic regimes for better health?

5
What is the economy?
  • A conceptual system comprising
  • the sum of the production, distribution, exchange
    and consumption of goods and services and
  • the sum of savings, investments and speculations
  • The flows of materials through production,
    manufacture, consumption, disposal (and the
    reverse flows of money)
  • The accumulated stocks of wealth and capability
    (investment, manufacturing base, research, human
    capital)
  • The social relations associated with these
    material (and financial) flows including work and
    play, family, ownership and regulation, privilege
    and obligation

6
The global economy as stocks and flows of real
stuff
  • Wheat (production, import, export)
  • Steel (production, import, export)
  • Cars (production, import, export)
  • Computer chips (production, import, export)
  • People (age, education, etc)
  • Foreign Direct Investment (incoming outgoing
    intra corporate extra corporate)
  • Intellectual property payments (IP imported IP
    exported)
  • Insurance business (trade in new policies
    imported, exported)
  • Total cash flows
  • Manufacturing capacity
  • Human capital
  • Research and development capability

7
Economic models simplifying the impossibly
complex
  • Two industry models
  • the farmer produces food for the blacksmith who
    makes tools for the farmer
  • the better the tools the more food some of which
    can be sold in return for clothes
  • Single country models
  • capital plus technology (including energy
    sources) enables increased productivity which
    creates more profit, enables more innovation and
    frees labour to do more things
  • Two country models
  • England sells cloth to Portugal who sells wine to
    England
  • Global models
  • England buys cotton from India which it
    transforms into textiles and clothing which it
    sells to Europe and America
  • England buys opium from India which it sells to
    China to generate currency to buy silk and tea
    which it sells to Europe and America

8
The fetish of economic growth obscures the
workings of the international economy
  • Economic reporting and commentary in mass media
    preoccupied with economic growth (GDP)
  • for proprietors growth means sales and profit
  • for investors growth means dividends
  • for labour growth means jobs
  • for government growth means revenue and political
    stability
  • But to understand the health implications of
    economic regimes and policies need to understand
    the composition of economic activity and flows
    and the distributive dimensions

9
Economics as story telling
  • Economic models are the building blocks of
    economic interpretation, policy making and
    scenario testing
  • But economic models are themselves partial and
    simplifications there is no single comprehensive
    picture of the global economy to which we can
    refer to answer our questions
  • We put together such pictures (narratives) for
    particular purposes at particular times drawing
    upon different theories (models) about how things
    work to suit our purposes
  • The truth or otherwise of such narratives and the
    theories they incorporate is tested in their
    usefulness in addressing the purposes for which
    they are constructed

10
Method
  • Tell a story about the global economy over the
    last 60 years
  • a story that helps to make sense of patterns and
    developments in population health over that time
  • a story that draws on different theories as
    needed to make sense of the major transformations
    of this period and to sketch likely scenarios
    associated with current policy options
  • Review major policy interventions which have
    shaped this trajectory and the accompanying
    changes in population health
  • derive some principles and lessons about what
    works in international health policy and action

11
An economic history of the global economy since
the end of WWII
  • 1945-1975 the long boom
  • 1975-80 stagflation
  • 1975 looming threat of over-production (post
    Fordist crisis)

12
The long boom (1945-1975)
  • The post-WW2 environment
  • need for reconstruction (huge demand reflecting
    needs plus household savings)
  • huge productive capacity built up and then
    released by the end of the war
  • technologies 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
    technologies) frees up labour to make new things
    and to recycle wages as consumption
  • some trickle down to the poor and to the Third
    World

13
1975-80 - Stagflation and the failure of national
Keynesianism
  • Recession (cyclical slowdown on top of structural
    over-production)
  • Emerging inflation (increasing price pressures
    associated with monopoly power)
  • oil (OPEC)
  • labour (strong unions)
  • business (monopolies associated with brand names
    and protected technologies)
  • Resistance to Keynesian counter-cyclical policies
    contributes to inflation
  • slow down due to structural rather than cyclical
    factors
  • Keynesian policies less effective at boosting
    employment and local business but contribute to
    inflation
  • Ascendancy of monetarism
  • strong business antipathy to inflation (because
    of the costs of uncertainty) leads to fight
    inflation first policies
  • monetarism argues for sole reliance on interest
    rates to control the business cycle (as opposed
    to fiscal tools)
  • but increased interest rates also used to control
    inflation (at a time when the economy was in
    recession!)

14
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

15
From 1975 to the present
  • Two parallel dynamics
  • the continuing dynamic of the long boom
  • the rising threat of post-Fordist crisis
    (structural over-production)

16
Fordism the continuing dynamic of the long boom
  • Investment and employment in the
  • Sustainable production of useful goods and
    services which
  • People need and are able to pay for leads to the
  • Accumulation of capital (through profit, savings
    and tax) for
  • Continuing investment in RD and productive
    capacity (and ....)

17
The threat of over-production (and
post-Fordist crisis)
  • Where expanding (capital intensive) productive
    capacity (with stagnating employment growth)
    exceeds demand (because of stagnant purchasing
    capacity) owing to
  • saturated 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
  • Search for new markets, new products and better
    marketing (including commodification of family
    and community functions)
  • Externalise costs (including to labour and to the
    environment)
  • Consolidate production and increase market share
    through mergers and acquisitions,
  • Increase market power (and capacity to increase
    prices)
  • Reduce wages
  • Replace well paid labour with technology
  • Many of these strategies will further reduce
    demand by reducing purchasing power

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

20
Corporate and policy responses
  • Exacerbate the over-hang of productive capacity
    over effective demand?
  • Other unintended adverse consequences
  • destabilise the environment
  • increase unemployment and inequality
  • weaken family and community
  • degrade social infrastructure
  • transfer value from South to North

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)
  • However, continued growth globally (albeit
    slower) is supported through the
  • growing role of debt in sustaining demand
    (recycling capital as consumption) and a
  • trading regime which enforces the flow of value
    from poor to rich countries (terms of trade)
  • increasing practice of current account surplus
    (and higher costs of borrowing)

22
Capital recycled as consumption through debt
(private and corporate)
  • Increasing size, wealth, turnover and power of
    the financial sector (banks, insurance, etc)
  • slowing growth outlook so business redirects
    profit into financial sector (as portfolio
    investment) rather than into new direct
    investment
  • privatisation of pensions (superannuation)
    redirects billions from tax into savings held by
    financial institutions
  • Increased investments and savings redirected as
    loans
  • corporate rationalisation (in particular mergers
    and acquisitions) financed through corporate debt
  • private consumption supported through increasing
    household debt (recycling savings as consumption)

23
Flow of value from South to North
  • Channels
  • debt repayment
  • declining terms of trade (between commodities and
    manufactured goods)
  • extra cost of commercial borrowing (associated
    with current account surpluses)
  • Flow maintained by
  • IMF/WB policing
  • projection of US military power and the
  • collaboration of local elites

24
Privileged role (and uncertain status) of the US
dollar
  • Role of US dollar
  • Eurodollars from 1945
  • dollar as de factor international currency from
    1971
  • global traders holding reserves in dollars
  • Role of US economy
  • strong US currency despite US trade deficit an
    important driver of global economic activity
  • depends on borrowing of international dollars
  • availability of international dollars depends on
    confidence in the value of the dollar
  • Implications of a shift to the yen or euro?
  • could be damaging for exporters to US
  • role of US military in maintaining market
    confidence in the dollar
  • countries exporting to the US have incentive to
    support continued US hegemony

25
Staving off the threat of over-production
  • Currently
  • capital recycled as consumption through debt
  • enforced transfer of value from periphery to
    centre (from South to North)
  • Alternative strategies
  • (really) free trade?
  • global Keynesianism?
  • self-sufficiency and regional trade?

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
  • IP rules compared with barriers to people
    movement
  • non-agric. market access compared with agric.
    protection
  • declining terms of trade (commodities vs
    manufactures)
  • minimal commitment to special and differential
    treatment
  • Globalised free trade risks exacerbating the
    crisis of overproduction
  • Protectionism, can have important benefits as
    well as drawbacks
  • Amin self-sufficiency and polycentric regional
    (South South) trade

27
Method
  • Tell a story about the global economy over the
    last 60 years
  • a story that helps to make sense of patterns and
    developments in population health over that time
  • a story that draws on different theories as
    needed to make sense of the major transformations
    of this period and to sketch likely scenarios
    associated with current policy options
  • Review major policy interventions which have
    shaped this trajectory and the accompanying
    changes in population health
  • derive some principles and lessons about what
    works in international health policy and action

28
Events, Reports, Struggles
  • 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)
  • 1978 Deng Xiaoping initiates modernisation in
    China
  • 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
  • 1980s rise of AIDS/HIV
  • 1987 Adjustment with a Human Face
  • 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 compatible with health development!,
    new interventionism)
  • 1995 WTO established

29
Events, Reports, Struggles (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

30
Events, Reports, Struggles (1987-2000)
  • 1987 Adjustment with a Human Face
  • 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
Events, Reports, Struggles (2001-05)
  • April 2001 Defeat of big pharma in South Africa
    (note role of 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 defeat in Thai DDI
    case
  • Mar 2003 Invasion of Iraq (US unilateralism
    widespread opposition note limits to US power)
  • 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
  • Jan 2004 IMF report critical of US twin deficits
  • June 2005 Establishment of WHO Comm on Soc Dets
    of Health

32
Conclusions the economic environment
  • The impact and threat of post-Fordist crisis is a
    major feature of the current economic policy
    environment
  • The threat is not acknowledged as such by the
    dominant voices of global economic policy making
  • The conventional business and policy responses to
    this threat are in many respects making it worse
  • This crisis has impacted disproportionately on
    the developing countries and poorer people
    globally
  • including on their health status and health
    service development
  • The pressures for neoliberal policy reforms
    (through the IMF) and for continuing unfair trade
    (under the guise of free trade) are part of
    adapting to this post-Fordist crisis and impose
    major costs on the developing countries and
    poorer people globally
  • including on their health status and health
    service development
  • Helping to shape the outcomes of these debates
    and struggles are important tasks for health
    policy activists at the international level

33
Countervailing pressures
  • Alternative voices are resisting the pressure for
    neoliberal policy reform and unfair trade
  • There have been some important successes for this
    configuration of countries and movements
  • A number of strategic principles which might
    guide global health activists in their work can
    be derived from this history
  • Global economic justice (and injustice) are
    integral to international health policy
  • A number of specific issues and struggles warrant
    special attention for global health policy
    activists
  • Develop and drive a research agenda

34
Entry points which link health policy with global
economic regime
  • Debt and poverty
  • SAPs and nutrition
  • TRIPS, IPRs and access to drugs
  • GATS, privatisation and comprehensive PHC
  • Health and fair trade (with special and
    differential treatment)
  • AoA and small farmers loss of livelihood (and
    health consequences)
  • Bilateral trade agreements (WTO, incl BITs)
  • Role of WHO and WTO
  • AID, charity and sustainable development
    (significance of GF)

35
Need for a clear underlying economic analysis
  • Key elements of the economic analysis
  • the dynamic of structural over-production
  • the stabilising effect of converting capital
    (including capital created in TW) into rich world
    / rich strata consumption
  • the significance of the US dollar and the way it
    binds trading countries to US hegemony
  • the logic of regional polycentrism as an
    alternative to globalised economic integration
  • Project clear narratives linking these processes
    to the disease burden associated with the
    different entry point issues
  • Link campaigning around health specific goals to
    global economic reform goals (especially national
    self-sufficiency and polycentric South South
    trade)

36
A research agenda
  • Document the implementation of PRSPs and their
    impact on health
  • Delineate more clearly the workings of the global
    system linking interests and power to
    institutions of governance to flows of resources
  • Delineate the global economic dynamics more
    clearly networks of production and trade flows
    of resources
  • Identify ways in which global trading rules could
    be changed to support regional polycentrism
  • Document the disease burden associated with
    particular aspects of the regime of global
    economic governance

37
Back to our questions for health policy analysts
  • How shall we make sense of the relationships
    between economic regimes and peoples health?
  • How shall we understand the links between policy
    and power in shaping economic regimes?
  • How shall we engage in the shaping of economic
    policy and economic regimes for better health?

38
Another world is possible!
  • 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 policy activists
  • Key conclusions
  • recognise, celebrate and learn from the small
    victories of the social and popular movements
  • keep global economic in/justice at the centre of
    health policy discussion
About PowerShow.com