Globalisation and health

David LeggeIPHU @ Cairo

Purpose

• To explore the links between population health and ‘globalisation’ (a global regime of economic governance)

• To draw some implications for policy-making and for strategy for public health activists

• Focus on low income countries – (aka poor countries, developing countries,

third world, global south, periphery)

‘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

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– increased foreign direct investment– increasing role of transnational corporations– rise in size and power of the financial sector– changing patterns of production and

employment

Globalisation as a regime of economic (and political) governance

• Self-regulating (to some extent)• 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

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

Empires, big powers and nation-states

• Governing the regulatory structures – WTO negotiations– regional FTAs and BITs

• Occasional disciplinary action– trade sanctions– covert destabilisation– armed intervention

• Charitable aid and ‘development’ advice

Transnational corporations (and peak bodies)

• Size, number, proportion of global trade

• National influence– transnational but with domestic roots– leverage also with other governments– communication media (WEF, media,

markets)

• Cases– big pharma and IPRs– water privatisation

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– fundamentalisms (and the decline of modernity)– social movements, eg environmental, womens, – solidarity movements, eg Jubilee– NGOs

Information, knowledges and discourses

• Global power of – information, eg health statistics– discourses, eg comprehensive PHC, cost-

effectiveness– ideologies, eg neoliberalism, fundamentalisms

• The information organizations– academic and research– discussion fora– media

• Cases– role of the WB in promoting ‘cost-effective

packages of health interventions’– role of NGO websites in informing campaigns

against big pharma

Method

• Review some key reports, episodes, phases and struggles in global health and economic regulation since WW2

• 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

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

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)

1975-85 - Stagflation and the failure of Keynesianism

• Recession (cyclical slowdown on top of structural over-production)

• Emerging inflation (increasing price pressures associated with growing monopoly power)– oil (OPEC) – labour (strong unions)– business (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– 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– but increased interest rates also used to control inflation (at a

time when the economy was in recession!)

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

From 1980 to the present

• Two parallel dynamics– the continuing dynamic of the

long boom– the looming threat of post-

Fordist crisis (structural over-production)

The continuing (albeit weakening) 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

and the • Accumulation of capital (through

profit, savings and tax) for • Continuing investment (and ....)

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

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)

• 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*• *These strategies will further reduce demand

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)

• 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)

• *These strategies further reduce demand

Corporate and policy responses

• Restore the conditions for sustainable growth (the dynamic of the long boom)?

• Exacerbate the over-hang of productive capacity over effective demand?

• 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)

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• However, continued growth globally (albeit slow) 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)

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 savings as consumption)• 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

– 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)

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, corporations selling into the US from overseas park some of their profits in US dollars– keep the price of USD high– keep US consumption spending high (and inflation

low)– keep global economy ticking over

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

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

Alternative strategies of global economic management

• (Really) free trade?• Global Keynesianism

(UNCTAD)?• National self-sufficiency and

regional (south south) trade (Amin)?

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

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’

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: People’s Health Assembly and People’s Health

Charter

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: G21+China 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

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)

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

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

Discussion Topics (design a poster and present

briefly)1. What is presently happening to US

financial markets? Where did it come from? What are the implications for global health?

2. What is the crisis of legitimation? What are the implications for the crisis of legitimation for PHM strategies?

3. What kinds of roles can social movements play in global governance? How?