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GH 101/ GEOG 180/ JSIS B 180 Introduction to Global Health

Professors Steve Gloyd and Matthew Sparke

Lecture 4: Life and debt

3 questions

¡  Why were the liberal-left Alma Ata plans for universal primary health care thwarted?

¡  Why did more market-mediated, neoliberal policies become the global norm instead?

¡  Why did structural adjustment come to seem like the only option and ‘Consensus’?

3 textbook keywords

SAPs “It is now widely acknowledged that structural adjustment, as implemented, often did little to achieve growth, reduce poverty, or improve health.” p. 92 Washington Consensus “Stabilize, liberalize, privatize – the ‘Washington Consensus’ - became the mantra of IMF and World Bank Policy.” p. 87 Neoliberalism “This textbook seeks to make evident links between … neoliberal policies and the weakening of health systems.” p. xix

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So what is neoliberalism?

1) It is today’s 21st c. global pro-market rule-set 2) It is a return to the market liberalism of the 19th c. 3) It is a repudiation of welfare-state liberalism of the 20th c. i) Its critics also call it ‘market fundamentalism’ ii) Its advocates call it ‘free market capitalism’ iii) Both associate it with ‘the Washington Consensus’ Why? Because of the role played by the IMF & World Bank (based in DC) in enforcing neoliberal policy globally To understand this role you need to understand: A) how these institutions (IFIs) emerged out of Bretton Woods B) how the demise of Bretton Woods led to global debt crises C) how SAPs were used by the IFIs to discipline indebted countries

So what is the rule set of neoliberalism?

1.  liberalize trade - ‘adopt free trade’ 2.  privatize public services - ‘use business efficiency’ 3.  deregulate business - ‘cut red tape’ 4.  cut public spending – ‘shrink government’ 5.  reduce and flatten taxes - ‘be business friendly’ 6.  encourage foreign investment - ‘reduce capital controls’ 7.  de-unionize – ‘flexibility’ & ‘respect right to work’ 8.  develop using markets - ‘trade not aid’ 9.  reduce inflation - ‘maintain price stability’ 10.  expand property rights – ‘defend patents’ and ‘titling’

There are 10 main neoliberal policy ‘rules’ or ‘commandments’

GO TO: -> WWW.SOCRATIVE.COM

AA AB AC AD AE AF AG AH AI AJ AK AL AM AN AO AP AQ AR

AA AB AC AD AE AF AG AH AI AJ AK AL AM AN AO AP AQ AR

LOGIN AS STUDENT ROOM NAME IS KANE130 ENTER YOUR NAME SELECT TEAM COLOR USING SECTION CODE

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Do not press ‘Start Racing’ until I say “go”!

“Waiting for your teacher to start an activity”

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How have neoliberal norms been introduced & entrenched?

1.  Cultural pathways that cultivate ‘consensus’ around the norms

l  Talk of ‘common-sense’ market reforms l  Teaching in economics & business schools l  Think-tank funding & support for neoliberal commentary

2.  Political pathways that legislate or constitutionalize the norms l  Pinochet’s coup l  Reagan’s and Thatcher’s revolutions

3.  Economic pathways that conditionalize the norms l  Free trade agreements and rules such as TRIPs l  Debt crises and IMF & World Bank conditionalities

The conditions of conditionality: 1) The Place

¡  BRETTON WOODS l  Mount Washington Hotel, New Hampshire

¡  July 1944 ¡  730 delegates ¡  44 allied countries

The conditions of conditionality: 2) The Plan

1) Dollar fixed in value at $35 per ounce of gold - becomes global reserve 2) Goals of free Trade BUT capital controls on international finance 3) Finance meant to serve the development plans of production capitalists 4) IMF (International Monetary Fund) to cover balance of payments crises 5) IBRD (World Bank) to rebuild post-war world

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The conditions of conditionality: 3) The end of the plan (not of the IMF & WB)

1.  In 1960’s foreign countries build up dollar savings for which US did not have the gold – ‘exorbitant privilege’

2.  1971 President Nixon abandons the dollar/ gold peg

3.  Value of the dollar falls – John Connally ‘our currency, your problem’

4.  US exports become more competitive globally

5.  But 1973 OPEC increases oil prices (other cartels too) and global economic recession

6.  Other countries face low dollar profits and steep

inflation due to oil & other price hikes

The conditions of conditionality: 4) Global debt crises

1)  1970s Cold War conditions combine with the economic crises provoked in much of the 3rd World by rising oil prices lead to:

aggressive lending by private banks US government encourages 3rd world borrowing many military dictatorships take out big loans (‘odious debt’)

2)  1979 tightening of US monetary policy under anti-inflationary Paul Volker as Fed chairman – dollar interest rates go up fast

3)  Loan payments on 3rd world dollar-based loans spike upwards

4)  1980s global economic slump combined with rapidly rising $US 5)  Global recession reduces 3rd world revenue from exports

à Global south debt crises begin (Mexico’s 1982 default)

The conditions of conditionality: 5) The consequences of debt

1)  The end of private lending and turn to the IFIs

A) Countries are paying out so much in loan payments that they cannot make investments in industrial, infrastructural, educational development.

B) The resulting political and social instability raises the risks for investors and therefore the costs of new loans even higher.

C) IMF and World Bank intervention

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6) The consequence of conditionalities

2) The discipline of debt

A) Pressured by private banks and US leaders, IMF. and World Bank offer loan rescheduling but impose CONDITIONALITIES in return for new loans:

¡  demands for privatization of public services ¡  demands for countries to cut government spending ¡  demands for countries to open up their capital markets ¡  demands for monetary discipline and deflationary policy ¡  demands to adopt export-led growth strategies ¡  demands for trade liberalization

B) Conditionalities are packaged as STRUCTURAL ADJUSTMENT PROGRAMS (SAPs) = imposition of neoliberal discipline

More recently re-packaged as POVERTY REDUCTION STRATEGY PAPERS (PRSPs) for Heavily Indebted Poor Countries (HIPCs) = neoliberal self-discipline

MDRI & Gleneagles Summit – 2005 Debt Burden then

¡  Total external debt of low-income countries= $523 billion

¡  Total debt service being paid every day by low-income countries = $100 million

¡  Africa’s total external debt = $300 billion ¡  For every $1 received in grant aid, low income

countries paid: $2.30 in debt service ¡  Many African countries spend more on debt than

either health or education l  (e.g., Cameroon, Ethiopia, Gambia, Guinea, Madagascar, Malawi,

Mauritania, Senegal, Uganda and Zambia all spent more on debt than health in 2002

Multilateral Debt Reduction Initiative (MDRI)

¡  Launched by the G8 at Gleneagles in 2005

¡  Expand the pre-existing HIPC initiative to eliminate multilateral debt for qualified countries

¡  Promised 100% cancellation of the World Bank and IMF debt for 23 poor countries that reached ‘completion point’

¡  But still demands neoliberal conditionality

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Life and Debt movie exercise

Discuss the main lessons of Life and Debt in your section discussion group, and work together to design a powerpoint slide show with about 4 or 5 slides to teach the lessons of the movie to a high school class. Please be sure to stream and watch the movie before coming to class so that you can join this discussion effectively. To get credit for this assignment you have to participate actively in the group's work of constructing the group's slide show, and to then individually submit a copy of the resulting slideshow (the whole thing) to your TA.

Jamaica – the story continued

http://www.theguardian.com/world/2015/dec/24/beijing-highway-600m-road-just-the-start-of-chinas-investments-in-caribbean

Jamaica’s Global Fund proposal 2003 “The Human Development Report 2002 ranks Jamaica 86th of 173 countries on the human development index (HDI). More importantly, the Report indicates that Jamaica is one of only two countries with a real per capita income that was lower in 2000 (PPP US$3,639) than it was in 1975 (PPP US$3,981). The debt to GDP ratio in 2001 was 136%, and with debt servicing obligations consuming in excess of 60% of the national budget, very few resources are available for the social sector, including the health sector.” http://www.theglobalfund.org/en/portfolio/country/?loc=JAM

Public health spend as % of total health spending in Jamaica

Life, debt and embodied economics of cutbacks, user fees & PPPs

“That is impossible. It is destruction. It is a way to catastrophe. My family and I, and the whole of Badakshan’s population, will not be able to use the treatment. We’ll have to forget the word medicine.” quoted by Salmaan Keshavjee, 2014 http://link.springer.com/book/10.1057/9781137463074

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Life, debt and the personalized economics of risk management

The Seven Habits of Highly Successful NeoliberalsTM Theorizing the cultivation of neoliberal behavior at a personal level

Global health macro body-counts, DALYS, and GF investment logics

Global health micro body-counts, personal health investment logics

Pages 25-30 of Reimagining Global Health

Life, debt and personalized economics in (ill)health i) responsibilization – the relentless devolution of accountability to individuals who are encouraged to see themselves as prudent and well-disciplined market subjects; ii) entrepreneurialization – the pursuit of calculative risk-taking, enterprising experimentation, and constant competition as the essence of social life and as a model for politics; iii) self-capitalization – the reappraisal of diverse aspects of life, including education, recreation, and health as human capital investment arenas where individuals can assess the return on their investments vis-à-vis the costs; iv) self-commodification – the marketing of the self (including the competitively counted congeries of self-promotion assembled in social media sites such as Facebook) as a personal commodity; v) personalization – the enlistment of individuals into the idea that their individuality, citizenship, freedom and pathway through life can all be reduced to a kind of consumerist maximization of personal choice; vi) fragmentation – the flip side of personalization and self-marketization, this involves being endlessly flexible, adaptable, moveable, re-brandable and re-trainable; and, vii) externalization – involving either the sadistic demonization all those deemed beyond the market pale, or alternatively, involving humanitarian efforts imagined in terms of inclusionary compensation of others whose problems are understood as being caused by disconnection.

Investment: http://www.marketwatch.com/story/jeff-bezos-and-bill-gates-bet-on-blood-tests-for-cancer-2016-01-11