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Global Economic Crisis and the Health of the Region

Global Economic Crisis and the Health of the Region Closing Gaps Protecting achievements Facing new challenges Dr. Mirta Roses Periago Director Ottawa, Canada. Official Visit March 30 th – April 3 rd , 2009 Global Economic Crisis

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Global Economic Crisis and the Health of the Region

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  1. Global Economic Crisis and the Health of the Region Closing GapsProtecting achievements Facing new challenges Dr. Mirta Roses Periago Director Ottawa, Canada. Official Visit March 30th – April 3rd, 2009

  2. Global Economic Crisis • The three Fs: “fuel, food, and finances”--financial crisis, fuel and food prices, plus combined and mutually reinforcing environmental threats • Global recession; Spillover from developed economies into emerging economies • Consequences in terms of poverty, malnutrition, and impact on the most vulnerable groups • Risk of becoming a social and political crisis • Cutbacks in domestic investment and international development assistance • Threat to the real, not simply statistical, achievement of the MDGs

  3. Global Economic Crisis THEREFORE…. • Avoid errors of previous structural adjustment programs, leading to disinvestment in the social sectors and reduction of the regulatory capacity of the State • Call to maintain and increase investment in health/social sector and labor intensive programs in times of crisis • Generate and strengthen protective/safety nets for poor and vulnerable groups and avoid more middle income groups to fall back into poverty • Significant repercussions on global health and the work of PAHO/WHO

  4. A DIFFERENT CRISISAll countries will be affected, but to a different degree GDP GROWTH IN THE DEVELOPED ECONOMIES In annual variation rates

  5. The private sector is the most exposed 7.9% Peru -1.3% 1.2% Mexico -1.4% 1.0% Colombia 2.5% 9.0% Chile 2.0% 4.3% Brazil -1.5% 3.8% Argentina 2.0% -3% -2% -1% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% External public debt External private debt LATIN AMERICA AND THE CARIBBEAN (SELECTED COUNTRIES): VARIATION IN THE FOREIGN DEBT, 2006-JUNE 2008 (As a percentage of GDP)

  6. In 2008 the Region completed six consecutive years of growth Uruguay 11.5 Peru 9.4 Panama 9.2 Paraguay 7.0 Argentina 6.8 Ecuador 6.5 Brazil 5.9 South America 5.9 Bolivia 5.8 Venezuela 4.8 Latin America and Caribbean 4.6 Dominican Republic 4.5 Central America 4.4 Cuba 4.3 Honduras 3.8 Chile 3.8 Guatemala 3.3 Costa Rica 3.3 Nicaragua 3.0 El Salvador 3.0 Colombia 3.0 Caribbean 2.4 Mexico 1.8 Haiti 1.5 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0 12.0 LATIN AMERICA AND THE CARIBBEAN: RATES OF VARIATION IN GROSS DOMESTIC PRODUCT2008 (In percentages) GDP per capita of L.A. and the Caribbean grew at over 3% annually for the fifth consecutive year

  7. 300 60 48,3 250 50 221 43,8 44,0 43,5 211 204 40,5 200 193 184 200 40 36,3 34,1 136 Millions 150 30 Percentage 22.5 97 19.4 93 89 18.6 89 19.0 18.5 100 20 68 71 62 13.3 12.6 50 10 0 0 1980 1990 1997 1999 2002 2006 2007 1980 1990 1997 1999 2002 2006 2007 Indigent Poor but not indigent Indigent Poor but not indigent Between 2003 and 2007 poverty and extreme poverty fell substantially... LATIN AMERICA: TRENDS IN POVERTY AND EXTREME POVERTY 1980-2007 Millions of people Percentage of people Source: Economic Commission for Latin America and the Caribbean` (ECLAC), based on special tabulations from the household surveys of the respective countries. a/Estimate corresponding to 18 countries of the Region plus Haiti. The figures placed on the upper part of the bars represent the percentage and total number of poor people (Indigent plus poor but not indigent).

  8. This reduction is due to economic growth and betterincome distribution Source: Economic Commission for Latin America and the Caribbean (ECLAC), based on special tabulations from the household surveys of the respective countries. a/ Guatemala (in extreme poverty) and the Dominican Republic are excluded because the results of the disaggregation are not significant. b/Urban areas.

  9. Political and Economic Situation Region in search of self-sufficiency and self-determination Health at the center of the political agenda How to reconcile equity and stability Crisis in traditional political parties Relevance of human rights approach Binational/Border conflicts, but no war Heightened violence and insecurity Demographic bonus: investment in youth

  10. Political and Economic Situation Lower economic growth but a better prepared Region • Improved fiscal situation, better balance of trade (surplus), lower external debt, and higher international reserves • Years of prudent policies have given us greater room to maneuver to deal with the financial crisis ECLAC, IDB, IMF, and World Bank agree about: • Significant growth in 2008 (estimates range from 3% to 4.5%) • Lower growth in 2009 (estimate 2%) • But persisting lower economic growth than other regions of the world • Inequity remains unchanged and it is more concentrated

  11. Substantially lower economic growth

  12. In 2009 a sharp deceleration in regional growth is expected Peru 5.0 Panama 4.5 Uruguay 4.0 Cuba 4.0 Venezuela 3.0 Bolivia 3.0 Argentina 2.6 South America 2.4 Brazil 2.1 Central America 2.1 Paraguay 2.0 Nicaragua 2.0 Honduras 2.0 Guatemala 2.0 Ecuador 2.0 Colombia 2.0 Chile 2.0 1.9 Dominican Republic 1.5 Haiti 1.5 Caribbean 1.4 El Salvador 1.0 Costa Rica 1.0 Mexico 0.5 0.0 1.0 2.0 3.0 4.0 5.0 6.0 LATIN AMERICA AND THE CARIBBEAN: RATES OF VARIATION IN GROSS DOMESTIC PRODUCT 2009 (In percentages) Latin America and Caribbean 20 MILLION PER POINT OF DECLINE?

  13. Political and Economic Situation Significant impact, especially in the social sector • Tight fiscal situation with pressures on social investment • Higher unemployment, informal employment, and unpaid family employment • Shrinking remittances affecting both the families that receive them and the local economy • Increase in poverty - approximately 15 million people, due to a combination of lower economic growth and higher energy and food prices

  14. LATIN AMERICA(18countries): UNEMPLOYMENT RATEin the over-15 population, urban areas, by income deciles.2002-2006 Unemployment Rate

  15. DROP IN REMITTANCES LATIN AMERICA AND THE CARIBBEAN: CURRENT TRANSFERS (CREDIT), 2007 As a percentage of GDP and in millions dollars 57% cover health expenditures?

  16. Political and Economic Situation Impact varies by subregion and country • Mexico and Central America more affected • South America less affected (ECLAC estimates growth for 2009 around 2%) • Countries net fossil fuel and food importers (some Caribbean and Central America) very affected by price variations • Countries net fossil fuel and food exporters see fiscal revenues impacted by price variations. (soybean prices decline of almost 50% in recent months; mining products and fossil fuels)

  17. Private health expenditure - direct out of pocket (remains the most important component of national health expenditure) Central Government Health Expenditure-includes Ministry of Health expenditure (it is less than one-quarter of total National Health Expenditure) Changes in the composition of national health care expenditure over time. Latin America and the Caribbean, 1990-2005. Source: Pan American Health Organization. Health Systems Strengthening Area. National health expenditure database.

  18. Public health investment in the Latin American and Caribbean countries ismuch lower than in other countries and regions of the world, with the exception of Africa Source: See HINTZ, Jorge - Latin America: the world region with worse poverty-inequality relation. Virtual Library TOP www.top.org.ar/publicac.htm

  19. Health expenditure has the greatest redistributive impact (But the redistributive impact of public expenditure does not always benefitthe poorest sectors of society) Quintile I - Poorest

  20. A great deal can be done to cushion theimpact of the financial crisis • Solidarity in times of crisis: safeguard progressthrough commitments; • among donor governments and the countries that require their support: maintain promised levels of development assistance; • among governments and their citizens: promote an ethical dimension in public policy, and, in particular, the maintenance of essential social and health services; and • among citizens: share risks and responsibilities as the foundation for strong health systems.

  21. Protect health expenditure Protect the health expenditure

  22. Social protection nets to support the poor will bea priority • IMPORTANCE OF SOCIAL PROTECTION • Expanding income support programs can be more effective and with FASTER impact than creating new ones. • Income protection i.e. temporary employment programs with a social impact, such as construction of schools and clinics, water and sanitation, waste disposal. • Focalizingis critical for guaranteeing that expenditure through programs reaches those who need it. • Conditioned transfers and more rapidly without conditions, given to women, there is data that show that they will be used in healthy choices. • Policy coordination from several sectors: stabilize prices, cut food prices, reduce out of pocket expenditures, transportation vouchers, support health insurance payments, and keep children in school.

  23. (Ingreso total del Quintil V = 100) 100 9% Social expenditure 90 Primary income 80 70 60 Percentage 91% 50 40 16% 30 22% 20 30% 84% 78% 10 51% 70% 49% 0 Quintile I Quintile II Quintile III Quintile IV Quintile V Social public expenditure has a major influence on the well-being ofthe poorest in society… LATIN AMERICA: REDISTRIBUTIVE IMPACT OF SOCIAL PUBLIC EXPENDITURE BY PRIMARY INCOME QUINTILES (Percentages) Source: ECLAC, based on national studies. a/18 countries. Average weighted by the significance of spending in the primary income of each country.

  24. A five-point framework for action • Public expenditure for the poor, with a positive health impact 2.Leadership 3. Monitoring and analysis 4. New ways of doing business in international health 5.Health Sector Policy(Health systems reforms based on Primary Health Care and Health in all policies)

  25. A five-point framework for action A five-point framework for action 1. Public expenditure for the poor, with a positive health impact General agreement about counter-cyclical public spending as a means to reactivate economyKey role in the push needed by many low income countries, since they have no capacity or fiscal space to finance these measures themselves. The challenge is to guarantee that the spending will really favor the poor and have a positive impact on health .

  26. A five-point framework for action A five-point framework for action 1. Public expenditure for the poor, with a positive health impact

  27. 16 14 12 10 8 Annual rate of variation (%) 6 4 2 0 -2 -4 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 b/ Annual variation in Gross Domestic Product Annual variation in Total Social Expenditure … Public expenditure is procyclical. The challenge today is that it be countercyclical Latin America and the Caribbean (21 countries): ANNUAL VARIATION IN TOTAL SOCIAL EXPENDITURE AND GDP Source: ECLAC, Social expenditure and national accounts database. a/Weighted average of the countries. b/Provisional data.

  28. Political Action Framework Convergence and harmonization of institutional agendas at different levels of intervention Cross-cutting issues to articulate health systems and health determinants Achieve Good Health Outcomes for ALL PRIMARY HEALTH CARE: TACKLE DETERMINANTS AND STRENGTHEN HEALTHSYSTEMS

  29. ReportMacroeconomic s and Health; Investing in Health for Economic Development Global Reporton the Health of PHC (IMS) Launch ofFaces, Voices, and Places of MDGs CDS Report Financ. ofuniversal Access to health services (WHA 58.33) MDGs andHEALTH (CD45.R8) Strengthening of HR Management in the health services (CD43.R6) Renewal of PHC,25 years since Alma-Ata (CD 44.RD) Extension ofSocial Protection in Health (CSP26/12) MillenniumDeclaration Political Action Framework 189 countriescommitted to the MDGs 1st GlobalMeeting on HD, Chile Declaration ofMexico on Health Promotion StrategicPlan 2008- 2012 BangkokCharter for Health PHCDeclaration of Montevideo HEALTHAGENDA FOR THE AMERICAS2008-2017 2000 2001 2002 2003 2004 2005 2006 2007 // 2008 Reg. Goals for HR2007-2015 (CD 47.R19) PH, health res., prod. of essential medicines and Access (CD47.R7)

  30. Convergence and Articulation ofInstitutional Agendas LEVELS OFINTERVENTION ART I CULATION OF AGENDAS UN Network ofCollaborating Centers GlobalWork Program TCC -cooperationamong Countries GLOBAL WH O REGIONAL SUBREGIONALTRANSNATIONAL People, Families, andCommunities HealthAgenda for the Americas CCS - Country-/focused Cooperation PARTNERSHIPS Resolutions NATIONAL MDGHFA PA H O SUBNATIONAL StrategicPlan MUNICIPALCOMMUNITY OtherCooperation and Financing Agencies Decentralizedtechnical cooperation

  31. Potential impact of the international crisis on the priorities of the Health Agenda for the Americas (HAA) 2008-2017 and Strategic Objectives of the Regional Strategic Plan (SP) 2008-2012 Context: • From 2007 to January 2009 the LAC commodities index fell 60% • Demand for Latin American exports falling • the terms of trade are also deteriorating • Access to external financing becoming increasingly difficult • Climate of uncertainty undermining the labor market and negatively affecting consumption and investment • Response of the countries in LAC has been uneven • Broad array of policies being implemented in each country in LAC (which is related to country ability to finance these policies andestablish the institutional framework)

  32. Priorities of the Health Agenda for the Americas (HAA) 2008-2017 and Strategic Objectives of the Regional Strategic Plan (SP) 2008-2012 Two basic scenarios for the HAA and the SP: • “Business as usual” approach (most likely expenditures in the social sector and particularly inhealth are likely to decrease)  • This will have a major effect on the countries’ ability to deliver their contribution to the HAA and achieve MDGs.  • The SP is currently funded at about 50% by voluntary contributions, the most important partners being the US, Spain, and Canada. Current expenditures still based on previous year's budgets, but in future years may be reduced.

  33. Priorities of the Health Agenda for the Americas (HAA) 2008-2017 and Strategic Objectives of the Regional Strategic Plan (SP) 2008-2012 Two basic scenarios for the HAA and the SP: • Alternative scenario (take advantage of the crisis fostering higher investment inhealth, or at least protect current status) Considerations: • Health is labor intensive, considered a critical component for successful fiscal interventions • Given the likely high unemployment impact of economic downturns, there will be a need to reduce social impact. Health always a very powerful tool • Long-term effect of decreasing health investments will be much more expensive to correct, plus the obvious ethical impact.

  34. HEALTH FOR ALL LINKAGE BETWEEN SYSTEMS AND DETERMINANTS Healthy Public Policies Emphasis on Equity PHC-based Health Systems Health Determinants Intersectoral Approach LEADERSHIP SOCIOECONOMIC • Health Promotion and Participation POLITICAL FINANCING AND INSURANCE Social Protection ENVIRONMENTAL Human Rights CULTURAL AND LIFESTYLE SERVICE DELIVERY Gender, Ethnicity and Intercultural BIOLOGY & HEREDITY HUMAN RESOURCES MDGs RESULTS-BASED MANAGEMENT

  35. Health for ALL Social Justice Equity Solidarity State Responsibility Right to Health Universality Participation Health Determinants PHC-based Health Systems LINKAGE OF SYSTEMS AND DETERMINANTS Healthy Public Policies Developintegrated public policiesamong multiple sectors,“Health in allpolicies”

  36. Health for ALL Social Justice Equity Solidarity State Responsibility Right to Health Universality Participation Health Determinants PHC-based Health Systems LINKAGE OF SYSTEMS AND DETERMINANTS Healthy Public Policies Emphasis on Equity Prioritize equity in health within developmentalpolicies, plans and programs

  37. Health for ALL Social Justice Equity Solidarity State Responsibility Right to Health Universality Participation Health Determinants PHC-based Health Systems LINKAGE OF SYSTEMS AND DETERMINANTS Healthy Public Policies Emphasis on Equity Intersectoral Approach Strengthen health sector leadership tomanage intersectoral processes

  38. Health for ALL Social Justice Equity Solidarity State Responsibility Right to Health Universality Participation Health Determinants PHC-based Health Systems LINKAGE OF SYSTEMS AND DETERMINANTS Healthy Public Policies Emphasis on Equity Intersectoral Approach • Health Promotion and Participation Make health promotion a core in Government and Civil society action

  39. Health for ALL Social Justice Equity Solidarity State Responsibility Right to Health Universality Participation Health Determinants PHC-based Health Systems LINKAGE OF SYSTEMS AND DETERMINANTS Healthy Public Policies Emphasis on Equity Intersectoral Approach Health Promotion and Participation Social Protection Introduce universal approaches and mechanisms for socialprotection in health

  40. Health for ALL Social Justice Equity Solidarity State Responsibility Right to Health Universality Participation Health Determinants PHC-based Health Systems LINKAGE OF SYSTEMS AND DETERMINANTS Healthy Public Policies Emphasis on Equity Intersectoral Approach • Health Promotion and Participation Social Protection Human Rights Make enjoyment of the highest attainable levelof health a reality for all

  41. Health for ALL Social Justice Equity Solidarity State Responsibility Right to Health Universality Participation Health Determinants PHC-based Health Systems LINKAGE OF SYSTEMS AND DETERMINANTS Healthy Public Policies Emphasis on Equity Intersectoral Approach • Health Promotion and Participation Social Protection Human Rights Gender, Ethnicity and Intercultural Mainstream the gender, ethnic, and interculturalapproach in all interventions

  42. Convergence of thought and action • Eliminate anderadicate diseases that affect neglected populations, encouraging a local development approach and citizenship-/building • Strengthenhealth systems based on primary care and build a workforce capable of meeting the challenges of the MDGs • Guarantee thebenefits of science and technology, closing equity gaps • Move from therisk approach to the construction of health and quality of life; gear action to social, political and environmental determinants • Global healthsecurity and the application of new rules for relations between countries • Synergies andmaximum results through partnerships for health for all and with all

  43. Convergence of thought and action • Immunizationas a regional public resource, maintaining equity and universal coverage • Timely,complete, and shared health surveillance • Middle-incomecountries positioned in the global health scenario • Access toreliable, validated, evidence-based health information • Access totimely, quality health goods and services without exclusion

  44. Results-based Management Mandates for the period 2008-2012 CountryCooperation Strategies (CCS) GeneralProgram of Work of WHO 2006-2015 (Global Agenda) PASBProgram budget 2008-2009(and 2010- 2011, and 2012-2013) Subregionalhealth agendas PASBStrategic Plan 2008-2012 HealthAgenda for the Americas 2008-2017

  45. Public Health Policies toward HEALTH FOR ALL HEALTH FOR ALL MILLENNIUM DEVELOPMENT GOALS PrimaryHealth Care SocialProtection HealthPromotion Information and Knowledge Human Rights

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