Globalisation and health

1. Globalisation and health David Legge IPHU (March 2008)

2. Purpose • To explore the links between population health and ‘globalisation’ (understood as a global regime of economic governance) • To draw some implications for policy-making and for strategy for public health activists

3. ‘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

4. 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 • foreign direct investment • role of transnational corporations • increasing size and power of the financial sector • changing patterns of production and employment

5. Globalisation as a regime of economic (and political) governance • Formal regulatory structures: 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

6. Formal regulatory structures: 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

7. Empires, big powers and nation-states • Governing the regulatory structures • WTO negotiations • regional FTAs and BITs • Occasional direct disciplinary action • trade sanctions • covert destabilisation • armed intervention • ‘Development assistance’ including funding and advice

8. Transnational corporations (and peak bodies) • Growing in size, increasing number, carrying increasing proportion of global trade • Global reach; national sponsorship • transnational but with domestic roots • leverage also with other governments • communication media (WEF, media, markets) • Cases • big pharma and IPRs • water privatisation

9. 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 • fundamentalism (and the decline of modernity) • social movements, eg environmental, womens, • solidarity movements, eg Jubilee • NGOs and CBOs

10. Information, knowledges and discourses • Global power of • information, eg health statistics • research and analysis, eg DALYs • discourses, eg comprehensive PHC, cost-effectiveness • ideologies, eg neoliberalism, fundamentalisms • The information organizations • academic and research centres (eg Harvard SPH) • discussion fora (eg DAC of OECD) • media (eg reports, press coverage, etc) • Cases • role of the WB in promoting ‘cost-effective packages of health interventions’ • role of NGO websites in informing campaigns against big pharma

11. Method • Review the changing dynamics and regulatory strategies regarding the global economy since WWII • Review some key reports, episodes, phases and struggles in global health in the context of changing strategies of economic regulation • 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

12. 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

13. 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)

14. 1975-85 - Stagflation and the failure of Keynesianism • Recession (cyclical slowdown on top of structural over-production) • growing imbalance between productive capacity and market demand; weakening role of employment in recycling wages as consumption • Emerging inflation • cost of Vietnam war shared with the rest of the world because of role of the dollar (leads to rejection of glold standard in 1972) • increasing price pressures associated with growing monopoly power (oil with OPEC, labour with strong unions, business with 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 • ‘fight inflation first’ (because of the costs to business of uncertainty) • monetarism argues for sole reliance on interest rates to control the business cycle • but increased interest rates used to control inflation at a time when the economy was in recession!

15. 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

16. From 1980 to the present • Two parallel dynamics • the continuing dynamic of the long boom • the looming threat of post-Fordist crisis (jobless growth, structural over-production)

17. 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

18. 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) • Increase market power (and capacity to increase prices) • Consolidate production and increase market share through mergers and acquisitions* • Reduce wages (union busting, relocation)* • Replace well paid labour with technology* • *These strategies will further reduce demand (reduce the role of employment in recycling wages into consumption)

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

20. Corporate and policy responses • Exacerbate the over-hang of productive capacity over effective demand • Postpone the crisis for the rich world (and rich classes) • 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)

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) • 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 • for these groups the crisis has already arrived • However, continued growth globally (albeit slower) 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)

22. 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 profit and savings as consumption) • Increasing size, wealth, turnover and power of the financial sector (banks, insurance, etc): • slowing growth so business redirects profit into financial sector (as portfolio investment and speculation) rather than into new direct investment • new financial derivatives increase risky lending and speculation • 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)

23. 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 China, OPEC and other corporations and countries lend to the US (by buying US govt bonds) have • kept the price of USD high • kept US consumption spending high (and inflation low) • kept the global economy ticking over • Up until the ‘sub prime mortgage’ crisis; what now?

24. Implications of ‘sub-prime mortgage crisis’ • Extensive use of doubtful collateral (securitised debt) to support borrowing revealed • Credit squeeze: banks withhold credit because of exposure • Asset bubbles pricked; widespread loss of ‘wealth’; likelihood of recession • Foreign holders of US Govt bonds sell off or stop buying (buy oil futures instead) • Value of USD falls • Threat of global recession because of significance of US market to exporters globally

25. 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

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 • Globalised free trade risks exacerbating the crisis of overproduction • Protectionism, can have important benefits as well as drawbacks

27. Alternative strategies of global economic management • (Really) free trade? • Global Keynesianism (UNCTAD)? • National self-sufficiency and regional (south south) trade (Amin)?

28. 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

29. 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’

30. 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

31. 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

32. 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)

33. 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

34. 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