The Twist of the Rope

19 July 2013 by Tania Browne, posted in Global Health

While we all probably spend quite a lot of time nowadays thinking about our health and our finances, most of us might not have reason to think about the two being interlinked. At least, not in the wealthy nations. And certainly not in countries with free health care at the point of access, like my own.

But the strands of health and money are twisted like rope, from a family claiming medical insurance through to national infrastructure, right through to the trials of the global marketplace. In some places we may think of the rope as being quite loosely plied, with gaps between the strands and space for some movement both in our income and the health we can expect as individuals. But in many low income nations, the plies of the rope are tightly twisted, knotted and impossible to pull apart. Health is money, and money health.

I've talked a little before about health privilege, and how taking my child to the doctor was something of a chore until I realised that I lived in one of the few places in the world where things are that simple. Health privilege is a freedom, but health poverty is a giant knot in which the vast majority of the world are trapped. And they have very little power to escape because the wealthiest nations keep them there, and keep pulling the rope tighter.

In 2005 the World Health Organisation established a Commission on Social Determinants of Health, based on the understanding that unless the root social causes of health problems were addressed, no real progress would ever be made however many fancy medical schemes you set up. The Commission looks at where people live, where they work or if they suffer from unemployment, early childhood, social exclusion, and their food, nutrition and transport needs. They also look at if there is a national infrastructure for health care and how health care is financed. And all of these areas the commission looks at have been fundamentally affected by a single factor - globalisation.

What's Globalisation?

Tricky. Globalisation is hard to define because it covers so many things, but in the context of social determinants of health we're talking about the integration of goods and services, capital, technology and labour on a vast international scale. Most people, if asked in the street, would talk about the obvious signs of globalisation such as films and TV gaining international release and the prevalence of fast food chains. But in reality these are not the cause but the effect - the mere tip of a very large iceberg. The beating pulse of globalisation is the financial market. In their 3 part overview "Globalisation and Social Determinants of Health" (Globalisation and Health, 2007) Roland Labonté and Ted Schrecker point out that the perceived wisdom - that the market is natural, that ownership is a virtue, and that politics, laws and institutions keep the market in good order - is quite simply not the case. Founding President of the US Centre for Global Development, Nancy Birdsall has stated that globalisation is essentially asymmetric - skewed hugely towards the few very wealthiest nations who already possess capital and wealth, and who (by coincidence, surely...) have the power to dictate the markets. It works far less well for the poor majority.

In 1987 UNICEF published the first proper study of the links between global markets and global health, Adjustment with a Human Face. The report looked at ten countries who had needed to adjust their domestic budgets to allow for IMF loan repayments. Every single country studied had been forced to lessen their domestic budgets to repay the loans, and this led to deterioration in the key indicators for child health ( such as infant mortality, nutrition and education) and for access to social health determinants (for instance, access to social services).

This process is called structural adjustment, a term coined in 1980 when the World Bank initiated loans that would help countries restructure their domestic spending in order to pay off their debt to wealthy countries faster. These loans often have severe terms and conditions attached which lead to:-

- a reduction in government subsidies for basic items

- the removal of trade barriers to imports, and direct foreign investment

- reductions in state expenditure (usually on local programmes)

- the rapid privatisation of state-owned enterprises so the sale proceeds can be used to pay debts

Labonté and Schrecker quote a review of the health effects of structural adjustment in 76 countries, which found a negative effect in all cases.

But it's not only about repaying loans. Labonté and Schrecker identify several ways in which globalisation affects social determinants of health, and it's worth taking a look at some in more detail:

Trade Liberalisation

The lowering of tariffs on imports has been a featured the global economy since the end of the Second World War. The World Bank concluded that in the 1980s and 1990s "globalised" economies grew much faster than "non-globalised" economies, but Labonté and Schrecker point out some problems with definitions. Globalised countries were defined as "Countries that have seen a trade/GDP increase since 1977". This does not give any indication of a base line. For instance, countries such as China and India started out as very closed and restricted economies. Even though they've grown rapidly since 1977 and become economic superstars, they're still not as "outward looking" as some of the countries who would be classed as "non-globalised" due to their poor growth - even if that poor growth was due to a drop in international markets for a commodity that country specialised in exporting. In fact, India and China's trade/GDP levels were still lower than average.

Anyway, even if definitions were firmed up, growth is not a sure fire route to poverty reduction. Labonté and Schrecker cite studies in Latin America which show that the redistribution of income through progressive taxes, or even targeted social programmes, have a greater effect.

The Labour Markets

The World Bank has predicted that social inequality will grow for 86% of the world's population for at least the next 20 years. Just think about that for a minute, and wonder why.

A big part of this social inequality is to do with the global labour market.  Production has gone from being in a single place in a wealthy nation to a process outsourced, specialised and scattered across international borders. There is high demand for low skilled workers as rich countries shed their manufacturing bases and outsource to subsidiary companies. This has lead to falling wages and poorer working conditions for people around the world. Industrial hazards and exposure to pollution are increasingly common, and big companies increasingly crop up in news stories of terrible working conditions, claiming they know nothing because the work was "outsourced".

During it's rapid integration into the world economy between 1976 and 2000, Mexico's wages went from 40% of the country's GDP to just 18.9%. Numerous studies have found that more precarious work contracts lead to poorer health and safety protection.

Financial Liberalisation and Financial Crises 

The increases in foreign investment implicit in loans leave countries exposed to the volatile, short term whims of The Market. It also means that companies that invest in your labour market can pull out again frighteningly quickly without any pre-agreed protocol or legislation to prevent them. Disinvestment can be completely devastating to a country. Purchasing power and credit rating can disappear almost literally overnight. The bailouts, with their "necessary conditions", can lead to even more inequality and the employment rate recovers far more slowly than a country's GDP - making matters even worse.

Natural Resources and Environmental Exposures

The Millenium Ecosystem Assessment stated that poor people historically find themselves with disproportionately less access to the land's natural resources the more the wealthy demand. Nothing has changed, except that the "owners" of your resources might not be the wealthy of your own country any more, but a conglomerate on the other side of the of the world. The case of oil investment in Nigeria, among others, has also shown that such investment does not automatically help the poor, it just helps the rich get richer. Often, pushing the poor off their ancestral land and shutting off the natural resources that may have given them a livelihood into the bargain.

And it's not just about closing off resources. By living in industrialised or marginal environmental areas, the poor are exposed to industrial and natural hazards that the wealthy can, quite simply, move away from. We only need a "Bhopal" or a "New Orleans" to see how incredibly disproportionately the poor are affected by such tragedies. By 2020 the number of people living in slums across the world is expected to be around 1.4 billion.

Making Health Systems Marketable

The World Bank has historically encouraged the marketisation of health services through reductions in government spending and encouraging the use of user fees. In fact, this was part of those "loan conditions" we talked about earlier for many years. While they have now acknowledged, in 2006, that this approach led to further health inequality, they still encourage the use of a private health insurance system wherever possible, playing money once more into the hands of the financial services industry. Such practices lead directly to medical poverty traps, where families have not only to lose wages from illness and visits to medical clinics, but also they have to find money in their budgets for health insurance.  If you're losing wages due to illness, saving by not renewing the health insurance may be an enforced option, and so it goes on. And the simple fact is, that if you don't have the money, you don't get treated.

 

Health inequality and globalisation are intertwined like the coils of a rope. It's a depressing picture, and it's one that even the most fervent admirer of the financial markets must admit is getting worse. But there are small pockets of hope on the horizon, policy innovations and schemes which aim to redress some of this deep imbalance. They're delicate threads of hope, and need to be nurtured in order not to be swallowed up by the vast knots, but they're there. More about these in part two of this post, next week.


One Response to “The Twist of the Rope”

  1. Khalil A. Cassimally Reply | Permalink

    Really good post, Tania. It's disheartening to see how the poor always seem to suffer at the hands of those who have the power to get them out of poverty. Poverty and low healthcare is a vicious cycle: one leads to the other and vice versa. So yes, to remove people from the cycle, we need to look at the underlying (mostly social) factors and actually DO something about it.

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