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Globalisation and health

Purpose. To explore the links between population health and

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Globalisation and health

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    1. Globalisation and health David Legge IPHU (March 2008) Pathways to better health are shaped by patterns of economic development and likewise, the health status of populations is one of the factors which affect economic development. Policies for better health need to be framed with an understanding of the ways in which economic relationship and dynamics affect people’s opportunities for health and similarly policies for economic development need to be framed with a recognition of the ways in which different choices can determine the health chances of communities. The exact character of these relationships is fiercely contested because a great deal is at stake and while the issues are complex in themselves the conflicting interpretations and claims generate an overlay of confusion which makes it much more difficult to form a clear picture of these relationships for the purpose of developing policies which might contribute positively to economic and to health goals. Next Pathways to better health are shaped by patterns of economic development and likewise, the health status of populations is one of the factors which affect economic development. Policies for better health need to be framed with an understanding of the ways in which economic relationship and dynamics affect people’s opportunities for health and similarly policies for economic development need to be framed with a recognition of the ways in which different choices can determine the health chances of communities. The exact character of these relationships is fiercely contested because a great deal is at stake and while the issues are complex in themselves the conflicting interpretations and claims generate an overlay of confusion which makes it much more difficult to form a clear picture of these relationships for the purpose of developing policies which might contribute positively to economic and to health goals. Next

    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 My purpose in this presentation is to explore the links between the conditions for global health and the prevailing regime of global economic governance (‘globalisation’). I am seeking some clearer ideas about policy directions, a mapping of the major interests and forces at play and perhaps some clearer ideas about strategy for public health activists. Next My purpose in this presentation is to explore the links between the conditions for global health and the prevailing regime of global economic governance (‘globalisation’). I am seeking some clearer ideas about policy directions, a mapping of the major interests and forces at play and perhaps some clearer ideas about strategy for public health activists. Next

    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 As a configuration of economic activity globalisation has been accompanied by changing patterns of production and trade, of financial flows and investment, of wealth accumulation and income flows. The intensification of global economic relations have been associated with: increasing role of TNCs rise in size and power of the financial sector changing patterns of production and employment the globalising of class (symbolic analysts, production workers, service workers) new strategic configurations comprising the metropolis (dominated by US, EU and Japan) and the periphery NextAs a configuration of economic activity globalisation has been accompanied by changing patterns of production and trade, of financial flows and investment, of wealth accumulation and income flows. The intensification of global economic relations have been associated with: increasing role of TNCs rise in size and power of the financial sector changing patterns of production and employment the globalising of class (symbolic analysts, production workers, service workers) new strategic configurations comprising the metropolis (dominated by US, EU and Japan) and the periphery Next

    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 Globalisation as a regime of global economic regulation incorporates a range of processes and structures: discipline of the markets (financial media, ratings agencies, traders) structural adjustment lending ambivalent role of the nation state (accountable to domestic constituency and commercial forces) global opinion management global policing arrangements multilateral Institutions and Agreements (UN, WHO, IMF, WB, WTO) regional FT agreements (NAFTA, EU, ASEAN) NextGlobalisation as a regime of global economic regulation incorporates a range of processes and structures: discipline of the markets (financial media, ratings agencies, traders) structural adjustment lending ambivalent role of the nation state (accountable to domestic constituency and commercial forces) global opinion management global policing arrangements multilateral Institutions and Agreements (UN, WHO, IMF, WB, WTO) regional FT agreements (NAFTA, EU, ASEAN) Next

    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 Bretton Woods (in New Hampshire) – site of famous conference in 1944 where the IMF and WB were created and the decision to create a WTO was postponed IMF – International Monetary Fund WB – World Bank WTO – World Trade Organisation EcoSoc – Economic and Social Council of the UN (parallel to the better known Security Council) UNCTAD – United Nations Conference on Trade and Development UNDP – UN Development Program WHO – World Health Organisation UNAIDS – UN AIDS Coordination Body UNICEF – UN Chlldren’s Emergency Fund GFATM – Global Fund for AIDS, TB and Malaria GAVI – Global Alliance for Vaccines and Immunisation NextBretton Woods (in New Hampshire) – site of famous conference in 1944 where the IMF and WB were created and the decision to create a WTO was postponed IMF – International Monetary Fund WB – World Bank WTO – World Trade Organisation EcoSoc – Economic and Social Council of the UN (parallel to the better known Security Council) UNCTAD – United Nations Conference on Trade and Development UNDP – UN Development Program WHO – World Health Organisation UNAIDS – UN AIDS Coordination Body UNICEF – UN Chlldren’s Emergency Fund GFATM – Global Fund for AIDS, TB and Malaria GAVI – Global Alliance for Vaccines and Immunisation Next

    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 FTAs – bilateral free trade treaties BITS – bilateral investment treaties NextFTAs – bilateral free trade treaties BITS – bilateral investment treaties Next

    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 Globalisation as a regime of global economic regulation incorporates a range of processes and structures: discipline of the markets (financial media, ratings agencies, traders) structural adjustment lending ambivalent role of the nation state (accountable to domestic constituency and commercial forces) global opinion management global policing arrangements multilateral Institutions and Agreements (UN, WHO, IMF, WB, WTO) regional FT agreements (NAFTA, EU, ASEAN) NextGlobalisation as a regime of global economic regulation incorporates a range of processes and structures: discipline of the markets (financial media, ratings agencies, traders) structural adjustment lending ambivalent role of the nation state (accountable to domestic constituency and commercial forces) global opinion management global policing arrangements multilateral Institutions and Agreements (UN, WHO, IMF, WB, WTO) regional FT agreements (NAFTA, EU, ASEAN) Next

    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 Globalisation as a regime of global economic regulation incorporates a range of processes and structures: discipline of the markets (financial media, ratings agencies, traders) structural adjustment lending ambivalent role of the nation state (accountable to domestic constituency and commercial forces) global opinion management global policing arrangements multilateral Institutions and Agreements (UN, WHO, IMF, WB, WTO) regional FT agreements (NAFTA, EU, ASEAN) NextGlobalisation as a regime of global economic regulation incorporates a range of processes and structures: discipline of the markets (financial media, ratings agencies, traders) structural adjustment lending ambivalent role of the nation state (accountable to domestic constituency and commercial forces) global opinion management global policing arrangements multilateral Institutions and Agreements (UN, WHO, IMF, WB, WTO) regional FT agreements (NAFTA, EU, ASEAN) Next

    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 OECD – Organisation of Economic Cooperation and Development (30 rich nations financial club) DAC – Development Assistance Committee of OECD (where the large donors discuss ‘development policy’) OECD – Organisation of Economic Cooperation and Development (30 rich nations financial club) DAC – Development Assistance Committee of OECD (where the large donors discuss ‘development policy’)

    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 The way in which I have approached this task is as follows. I started by identifying and reviewing some key reports, episodes, phases and struggles which were of outstanding significance for global health and for global economic regulation since WW2. I have then used the bird’s eye perspective that this kind of historical review provides in order to identify some of the key linkages between health development and the wider debates and struggles regarding global economic and trade regulation. I have taken some of the major events in the health development chronology and sought to identify the ways in which contemporary economic changes might have influenced them. I have taken some of the key economic episodes and events and tried to identify the ways in which they have influenced health development. I have also looked for episodes or events where health status may have also influenced economic development. Finally I have sought to pull some themes from this review which might guide policy making in these two areas and which might inform the analyses and strategies of public health activists. NextThe way in which I have approached this task is as follows. I started by identifying and reviewing some key reports, episodes, phases and struggles which were of outstanding significance for global health and for global economic regulation since WW2. I have then used the bird’s eye perspective that this kind of historical review provides in order to identify some of the key linkages between health development and the wider debates and struggles regarding global economic and trade regulation. I have taken some of the major events in the health development chronology and sought to identify the ways in which contemporary economic changes might have influenced them. I have taken some of the key economic episodes and events and tried to identify the ways in which they have influenced health development. I have also looked for episodes or events where health status may have also influenced economic development. Finally I have sought to pull some themes from this review which might guide policy making in these two areas and which might inform the analyses and strategies of public health activists. Next

    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 It is convenient to divide the last sixty years into three periods: the ‘long boom’ (1945-1975); stagflation and the failure of national Keynesianism (1975-80); and the looming threat of over-production (post Fordist crisis) from 1975 onwards. Obviously such a periodisation involves some over-simplification. The progressive improvement in living standards associated with the long boom continued (for many) into the 1980s and 1990s and the structural tendency to over-production commenced well before the mid 1970s. This narrative of economic periods owes a great deal to the Monthly Review school (for example, ...) and to the writings of the theorists of ‘post-Fordism’ (for example ...) Next References It is convenient to divide the last sixty years into three periods: the ‘long boom’ (1945-1975); stagflation and the failure of national Keynesianism (1975-80); and the looming threat of over-production (post Fordist crisis) from 1975 onwards. Obviously such a periodisation involves some over-simplification. The progressive improvement in living standards associated with the long boom continued (for many) into the 1980s and 1990s and the structural tendency to over-production commenced well before the mid 1970s. This narrative of economic periods owes a great deal to the Monthly Review school (for example, ...) and to the writings of the theorists of ‘post-Fordism’ (for example ...) Next References

    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) The 30 years from 1945 to 1975 were characterised by high annual growth rates and relatively short recessions (REF). Two major factors contributed to this. First, on the demand side, was the huge need for reconstruction after the war and the pent up consumer demand (and savings) after so much hardship and privation (REF); second, on the supply side, the huge industrial capacity which had been built up during the war, much of which was able to convert to producing for the civilian market (REF). In addition to these post-war factors the development of the internal combustion engine associated with cheap oil contributed greatly to increasing productivity in many different sectors of production (REF). This phenomenon of a major technology contributing to a prolonged boom was an echo of previous eras when the development of railways and steel had likewise led to high levels of productivity and growth (REF). This period illustrates the key ingredients of economic growth coming together: capital, labour, technology and markets. Capital and labour are brought together to make goods and services that people (households, governments and corporations) need and are able to pay for. Increasing productivity (associated with new technologies) frees up labour to make new goods and services. Wages (and taxes) are recycled as consumption and increasing business activity also contributes to increased demand. While the dynamics of the long boom were primarily rooted in the industrialised world there was some trickle down to the developing countries. Increasing production in the rich world raised the demand for many of the commodities which were sourced from developing countries and under import substitution regimes many newly independent Third World countries commenced the process of industrialisation and capital accumulation. A small number of these countries were able to complete this process (most notably the ‘Asian tigers’). NextThe 30 years from 1945 to 1975 were characterised by high annual growth rates and relatively short recessions (REF). Two major factors contributed to this. First, on the demand side, was the huge need for reconstruction after the war and the pent up consumer demand (and savings) after so much hardship and privation (REF); second, on the supply side, the huge industrial capacity which had been built up during the war, much of which was able to convert to producing for the civilian market (REF). In addition to these post-war factors the development of the internal combustion engine associated with cheap oil contributed greatly to increasing productivity in many different sectors of production (REF). This phenomenon of a major technology contributing to a prolonged boom was an echo of previous eras when the development of railways and steel had likewise led to high levels of productivity and growth (REF). This period illustrates the key ingredients of economic growth coming together: capital, labour, technology and markets. Capital and labour are brought together to make goods and services that people (households, governments and corporations) need and are able to pay for. Increasing productivity (associated with new technologies) frees up labour to make new goods and services. Wages (and taxes) are recycled as consumption and increasing business activity also contributes to increased demand. While the dynamics of the long boom were primarily rooted in the industrialised world there was some trickle down to the developing countries. Increasing production in the rich world raised the demand for many of the commodities which were sourced from developing countries and under import substitution regimes many newly independent Third World countries commenced the process of industrialisation and capital accumulation. A small number of these countries were able to complete this process (most notably the ‘Asian tigers’). Next

    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! The late 1970s was characterised by stagflation, a combination of prolonged recession associated with creeping inflation. The economic slowdown commencing in the late 1970s reflected a combination of a cyclical slowdown (cyclical over-production) in the normal business cycle and the emergence of structural over-production (discussed further below). Associated with the recession was the emergence of recalcitrant inflation which reflected two main factors, firstly, the growing influence of monopoly power in certain sectors of the economy and second, the unintended adverse consequences of Keynesian expansionary policies, towards which the economy was resistant (because it was a structural slow down rather than just the ‘normal business cycle’. The increasing price pressures (associated with monopoly power and therefore not disciplined by the ‘free market’) were particularly strong in oil (OPEC), labour (strong unions), and business (where monopolies are associated with brand pre-eminence and protected technologies). All of these stakeholders claimed that they were just pushing up their prices to overcome the effects of other inflationary pressures. Another interpretation of the period has been that labour and capital were fighting to achieve greater shares of the falling rates of economic growth (REF). The inflation of this period was made worse by the continuing application of Keynesian stimulatory policies in a situation where the economy was increasingly resistant to such policies because of the increasing role of imports in supplying business, government and household needs. This meant that economic stimuli increased imports rather than (or rather as well as) boosting demand for local product and their for local production and local employment (and local buying capacity). Expansionary Keynesian policies increase money supply (through lower taxes and greater government spending – funded by borrowng). Increased money supply in these circumstances did not boost employment or local business but led to increased budget deficits and inflation. There was strong business antipathy to inflation (because of increased uncertainty in business planning). This pressure lead to ‘fight inflation first’ slogans with increased interest rates (to reduce the money in circulation) and tight limits on government spending (to rein in government deficits). These policies were most famously associated with Thatcher and Reagan but were applied during the succeeding decade by many governments. The apparent failures of national Keynesianism during this period (in particular inflation and high levels of government debt) contributed to the ascendancy of monetarism, which emphasised the use of official interest rates to curb or encourage the business cycle and argued for a balanced budget and for a minimalist role for government in the economy. (REF) This led to a situation in the early 1980s where the need to stoke the economy would have suggested low interest rates but the need to control inflation suggested the need for high interest rates. Because of the business sector pressure to ‘fight inflation first’ the policy makers elected to implement high interest rate policies which ensured that the recession was deeper and longer than it might otherwise have been. NextThe late 1970s was characterised by stagflation, a combination of prolonged recession associated with creeping inflation. The economic slowdown commencing in the late 1970s reflected a combination of a cyclical slowdown (cyclical over-production) in the normal business cycle and the emergence of structural over-production (discussed further below). Associated with the recession was the emergence of recalcitrant inflation which reflected two main factors, firstly, the growing influence of monopoly power in certain sectors of the economy and second, the unintended adverse consequences of Keynesian expansionary policies, towards which the economy was resistant (because it was a structural slow down rather than just the ‘normal business cycle’. The increasing price pressures (associated with monopoly power and therefore not disciplined by the ‘free market’) were particularly strong in oil (OPEC), labour (strong unions), and business (where monopolies are associated with brand pre-eminence and protected technologies). All of these stakeholders claimed that they were just pushing up their prices to overcome the effects of other inflationary pressures. Another interpretation of the period has been that labour and capital were fighting to achieve greater shares of the falling rates of economic growth (REF). The inflation of this period was made worse by the continuing application of Keynesian stimulatory policies in a situation where the economy was increasingly resistant to such policies because of the increasing role of imports in supplying business, government and household needs. This meant that economic stimuli increased imports rather than (or rather as well as) boosting demand for local product and their for local production and local employment (and local buying capacity). Expansionary Keynesian policies increase money supply (through lower taxes and greater government spending – funded by borrowng). Increased money supply in these circumstances did not boost employment or local business but led to increased budget deficits and inflation. There was strong business antipathy to inflation (because of increased uncertainty in business planning). This pressure lead to ‘fight inflation first’ slogans with increased interest rates (to reduce the money in circulation) and tight limits on government spending (to rein in government deficits). These policies were most famously associated with Thatcher and Reagan but were applied during the succeeding decade by many governments. The apparent failures of national Keynesianism during this period (in particular inflation and high levels of government debt) contributed to the ascendancy of monetarism, which emphasised the use of official interest rates to curb or encourage the business cycle and argued for a balanced budget and for a minimalist role for government in the economy. (REF) This led to a situation in the early 1980s where the need to stoke the economy would have suggested low interest rates but the need to control inflation suggested the need for high interest rates. Because of the business sector pressure to ‘fight inflation first’ the policy makers elected to implement high interest rate policies which ensured that the recession was deeper and longer than it might otherwise have been. Next

    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 In passing we should note how the rising interest rates of the early 1980s precipitated the Third World debt crisis which will figure in later parts of this story. Following the OPEC oil price rise of 1973 the oil producers were flush with cash, more cash than they could spend or invest and so much of it was deposited with the commercial banks. The banks sent salesmen around the world lending money at low and negative interest rates. Interest rates are effectively negative when they are lower than the prevailing rate of inflation. Much of this lending was to private corporations particularly in South America but generally with government guarantees which meant when the debt crisis was sprung the governments were held accountable for repaying and servicing these debts. In Africa most of the lending was direct to governments. In the early 1980s with the rise of monetarism interest rates escalated (to a peak of 17% in the US in 1981) imposing repayment and servicing burdens that many poor countries could not carry. The debt trap was sprung. We shall return to the debt trap later in this story but our focus at this point is on the emergence of a crisis of (structural as opposed to cyclical) over-production in the world economy. Next In passing we should note how the rising interest rates of the early 1980s precipitated the Third World debt crisis which will figure in later parts of this story. Following the OPEC oil price rise of 1973 the oil producers were flush with cash, more cash than they could spend or invest and so much of it was deposited with the commercial banks. The banks sent salesmen around the world lending money at low and negative interest rates. Interest rates are effectively negative when they are lower than the prevailing rate of inflation. Much of this lending was to private corporations particularly in South America but generally with government guarantees which meant when the debt crisis was sprung the governments were held accountable for repaying and servicing these debts. In Africa most of the lending was direct to governments. In the early 1980s with the rise of monetarism interest rates escalated (to a peak of 17% in the US in 1981) imposing repayment and servicing burdens that many poor countries could not carry. The debt trap was sprung. We shall return to the debt trap later in this story but our focus at this point is on the emergence of a crisis of (structural as opposed to cyclical) over-production in the world economy. Next

    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) We return to our review of the global economy from 1944 to the present. The third phase, from around 1975 to the present we are characterising as ‘the looming threat of post-Fordist crisis’. In fact it is more complex than this because this period also sees the continuing influence of the dynamic which underlay the long boom as well as the rising threat of post-Fordist crisis. We shall look briefly at these two dynamics. NextWe return to our review of the global economy from 1944 to the present. The third phase, from around 1975 to the present we are characterising as ‘the looming threat of post-Fordist crisis’. In fact it is more complex than this because this period also sees the continuing influence of the dynamic which underlay the long boom as well as the rising threat of post-Fordist crisis. We shall look briefly at these two dynamics. Next

    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 The linked concepts of Fordism and post-Fordism provide a useful entry to the concept of structural as opposed to cyclical over-production. Fordism (a direct reference to Henry Ford) describes an economic regime of mass production, mass employment and mass consumption. The Ford metaphor is a reference to Ford employees being paid enough in wages to actually buy a Ford motor car. The significance of the metaphor as a description of a broader economic configuration is the concept of workers as consumers and the significance of mass employment and high wages sustaining mass markets. By contrast, the concept of post-Fordism refers to a situation where expanding productivity associated with stagnating employment growth threatens an overhang of productive capacity over effective demand because of stagnant purchasing capacity. The period since 1975 (according to the post-Fordist interpretation) has been characterised by increasing (capital intensive) productive capacity but stagnant purchasing capacity, due to a combination of saturated markets and limited purchasing capacity where otherwise there would be continuing demand. The tendency of productive capacity to outpace effective demand threatens economic crisis. In theory this threat should be manageable but the threat of crisis is made more urgent by the fact that the ‘compensatory’ mechanisms adopted at the corporate and policy levels tend to exacerbate the threat of ‘over-production’ and bring on the crisis. Before looking at different strategies for managing the threat of over-production we need to look at some of the compensatory mechanisms adopted at the corporate and policy levels and how they exacerbate the crisis. The threat of structural over-production is understood in the corporate world in terms of market saturation and reduced profitability which eliciting a range of compensatory strategies such as mergers and acquisitions, reduced employment and wage cuts all of which contribute to further reduce demand. The threat of structural over-production is understood in the policy world in terms of falling growth rates eliciting a range of system responses and policy responses many of which also further exacerbate the risk of crisis. NextThe linked concepts of Fordism and post-Fordism provide a useful entry to the concept of structural as opposed to cyclical over-production. Fordism (a direct reference to Henry Ford) describes an economic regime of mass production, mass employment and mass consumption. The Ford metaphor is a reference to Ford employees being paid enough in wages to actually buy a Ford motor car. The significance of the metaphor as a description of a broader economic configuration is the concept of workers as consumers and the significance of mass employment and high wages sustaining mass markets. By contrast, the concept of post-Fordism refers to a situation where expanding productivity associated with stagnating employment growth threatens an overhang of productive capacity over effective demand because of stagnant purchasing capacity. The period since 1975 (according to the post-Fordist interpretation) has been characterised by increasing (capital intensive) productive capacity but stagnant purchasing capacity, due to a combination of saturated markets and limited purchasing capacity where otherwise there would be continuing demand. The tendency of productive capacity to outpace effective demand threatens economic crisis. In theory this threat should be manageable but the threat of crisis is made more urgent by the fact that the ‘compensatory’ mechanisms adopted at the corporate and policy levels tend to exacerbate the threat of ‘over-production’ and bring on the crisis. Before looking at different strategies for managing the threat of over-production we need to look at some of the compensatory mechanisms adopted at the corporate and policy levels and how they exacerbate the crisis. The threat of structural over-production is understood in the corporate world in terms of market saturation and reduced profitability which eliciting a range of compensatory strategies such as mergers and acquisitions, reduced employment and wage cuts all of which contribute to further reduce demand. The threat of structural over-production is understood in the policy world in terms of falling growth rates eliciting a range of system responses and policy responses many of which also further exacerbate the risk of crisis. Next

    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) From the corporate perspective the threat of an overhang of production over demand is perceived as a threat of reduced profitability. The most obvious response will be to search for new markets, new products and better marketing. This may not always be positive such as where it involves the commodification of family and community functions, currently sustained outside the marketplace. Another strategy will be to externalise costs (including to labour and to the environment). Other strategies include: increasing market share (horizontal M&As), increasing market power (eg vertical integration) reducing wages, replacing well paid labour with technology, There is a real possibility that these strategies will contribute to further reducing demand. Next From the corporate perspective the threat of an overhang of production over demand is perceived as a threat of reduced profitability. The most obvious response will be to search for new markets, new products and better marketing. This may not always be positive such as where it involves the commodification of family and community functions, currently sustained outside the marketplace. Another strategy will be to externalise costs (including to labour and to the environment). Other strategies include: increasing market share (horizontal M&As), increasing market power (eg vertical integration) reducing wages, replacing well paid labour with technology, There is a real possibility that these strategies will contribute to further reducing demand. Next

    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 At the public policy level there are further risks of counter-productive policy responses. The threat of structural over-production is understood in the policy world in terms of falling growth rates and elicits a range of policy responses many of which also exacerbate the risk of crisis. These policy responses include: cutting taxes (in order to reduce corporate and executive ‘tax burden’) in order to compete in the global market place for new investment; outsourcing and privatising public sector service provision (in order to provide new investment and market opportunities for under-employed capital); deregulating labour markets (union busting) in order to reduce labour costs and improve profitability; deregulating environmental controls (to facilitate the conversion of natural capital into recurrent revenue) and improve profitability; forcing repayment of debt from TW countries; forcing TW countries to open their markets to Northern manufactures and to compete (and therefore lower their prices) in the supply of inputs to industry in the North (all under the slogan of free trade and open markets). Many of these strategies further reduce demand, through reduced employment and reduced wages. They also have other negative outcomes in terms of livelihoods, working conditions, environmental damage, community life and culture. NextAt the public policy level there are further risks of counter-productive policy responses. The threat of structural over-production is understood in the policy world in terms of falling growth rates and elicits a range of policy responses many of which also exacerbate the risk of crisis. These policy responses include: cutting taxes (in order to reduce corporate and executive ‘tax burden’) in order to compete in the global market place for new investment; outsourcing and privatising public sector service provision (in order to provide new investment and market opportunities for under-employed capital); deregulating labour markets (union busting) in order to reduce labour costs and improve profitability; deregulating environmental controls (to facilitate the conversion of natural capital into recurrent revenue) and improve profitability; forcing repayment of debt from TW countries; forcing TW countries to open their markets to Northern manufactures and to compete (and therefore lower their prices) in the supply of inputs to industry in the North (all under the slogan of free trade and open markets). Many of these strategies further reduce demand, through reduced employment and reduced wages. They also have other negative outcomes in terms of livelihoods, working conditions, environmental damage, community life and culture. Next

    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) Some of these corporate and policy responses might tend to restore the conditions for sustainable growth. However, many of these corporate and policy responses are likely to further reduce effective demand by reducing wages, employment and public expenditure. Many of the policy responses also have adverse consequences in relation to the environment (for example, refusal to reduce greenhouse gas production), in relation to family and community life (the commodification of family and community functions) and the decay of social infrastructure. The policy package also tends to increase inequalities within countries and to further impoverish developing countries. Next Some of these corporate and policy responses might tend to restore the conditions for sustainable growth. However, many of these corporate and policy responses are likely to further reduce effective demand by reducing wages, employment and public expenditure. Many of the policy responses also have adverse consequences in relation to the environment (for example, refusal to reduce greenhouse gas production), in relation to family and community life (the commodification of family and community functions) and the decay of social infrastructure. The policy package also tends to increase inequalities within countries and to further impoverish developing countries. Next

    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) The conditions which supported the long boom are weakening through a combination of increasing levels of productivity (particularly productivity enhancements associated with job-replacing technologies) and through market saturation and/or weak purchasing power (particularly in many countries). So what prevents the crisis from declaring itself and engulfing the economy globally? In fact the crisis is already devastating the economies and communities of many Third World countries, partly because of the direct effects of the economic slowdown and more brutally because of the impact of the kinds of economic policies being imposed globally by the rich countries in their attempts to defer or reduce the impact of the crisis on their economies. There are a number of dynamics through which value is transferred from poor to rich countries, in particular: enforced (and repeated) repayment of debt; declining terms of trade and unfair trade. The participation of developing countries in this regime is achieved through a combination of IMF bullying, projection of US military power and the collaboration of local elites. However, in the rich world continued growth (albeit slow) is also supported through the growing role of debt in sustaining demand. Two important dynamics which warrant further explication. These are firstly, the recycling of capital and savings as consumption through debt at a national level and secondly, at an international level, the special status of the US dollar which enables the US to maintain the value of the dollar (despite a large trade deficit) and continue to buy goods from the rest of the world. We will look at each of these dynamics briefly. Next The conditions which supported the long boom are weakening through a combination of increasing levels of productivity (particularly productivity enhancements associated with job-replacing technologies) and through market saturation and/or weak purchasing power (particularly in many countries). So what prevents the crisis from declaring itself and engulfing the economy globally? In fact the crisis is already devastating the economies and communities of many Third World countries, partly because of the direct effects of the economic slowdown and more brutally because of the impact of the kinds of economic policies being imposed globally by the rich countries in their attempts to defer or reduce the impact of the crisis on their economies. There are a number of dynamics through which value is transferred from poor to rich countries, in particular: enforced (and repeated) repayment of debt; declining terms of trade and unfair trade. The participation of developing countries in this regime is achieved through a combination of IMF bullying, projection of US military power and the collaboration of local elites. However, in the rich world continued growth (albeit slow) is also supported through the growing role of debt in sustaining demand. Two important dynamics which warrant further explication. These are firstly, the recycling of capital and savings as consumption through debt at a national level and secondly, at an international level, the special status of the US dollar which enables the US to maintain the value of the dollar (despite a large trade deficit) and continue to buy goods from the rest of the world. We will look at each of these dynamics briefly. Next

    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) The expanding economic and political role of the finance sector is critical to any understanding of the way in which the economic system globally defers the crash which is threatened by the post-Fordist overhang (at least at the Centre). Over the last 25 years the financial sector has grown hugely, whether measured in terms of employment, capital value or proportion of GDP. At least two expanded income streams have contributed to this growth, first, an increasing share of business profit (as investors move from direct investment in new production to portfolio investment in the banks); and second, a rapidly increasing flow of superannuation savings as support for post-retirement income is shifted from government pensions (funded on a concurrent basis through taxation) to a dividend based annuity system managed through private financial institutions. How is that the banks have found new business when the rest of the business sector is languishing? Two important ‘product lines’ have grown greatly during this time: firstly, lending to business to support mergers and acquisitions and secondly, lending to households through mortgages and credit cards to support increased consumption. Increasing the flow of cash to support mergers and acquisitions has the effect of buying out capitalists (more cash in rich pockets) while the productive base is consolidated. The capitalists who are retiring from production have more cash available, much of which will be returned to the banks as portfolio investment; the capitalists who undertake the M&As assume increased debt (with increasing power to the banks). The second product line which has grown immensely during the last two decades is lending to private households. This has the effect of supporting continuing private consumption expenditure through increasing private debt (largely through mortgages and credit card). As a consequence of these developments the financial sector participates in the ‘consolidation’ and ‘rationalisation’ of the productive base, supports continuing consumer demand while promoting increasing flows to itself, (loan servicing from the borrowers and increasing share of new portfolio investment from the capitalist class. The net effect is the increasing size and power of financial sector. It plays a central role in the building and dismantling of the productive base. It plays and increasing role in balancing production and consumption in a slowly growing economy. It appears that the banks will exercise increasing control over our collective futures. Foreclosing for some. NextThe expanding economic and political role of the finance sector is critical to any understanding of the way in which the economic system globally defers the crash which is threatened by the post-Fordist overhang (at least at the Centre). Over the last 25 years the financial sector has grown hugely, whether measured in terms of employment, capital value or proportion of GDP. At least two expanded income streams have contributed to this growth, first, an increasing share of business profit (as investors move from direct investment in new production to portfolio investment in the banks); and second, a rapidly increasing flow of superannuation savings as support for post-retirement income is shifted from government pensions (funded on a concurrent basis through taxation) to a dividend based annuity system managed through private financial institutions. How is that the banks have found new business when the rest of the business sector is languishing? Two important ‘product lines’ have grown greatly during this time: firstly, lending to business to support mergers and acquisitions and secondly, lending to households through mortgages and credit cards to support increased consumption. Increasing the flow of cash to support mergers and acquisitions has the effect of buying out capitalists (more cash in rich pockets) while the productive base is consolidated. The capitalists who are retiring from production have more cash available, much of which will be returned to the banks as portfolio investment; the capitalists who undertake the M&As assume increased debt (with increasing power to the banks). The second product line which has grown immensely during the last two decades is lending to private households. This has the effect of supporting continuing private consumption expenditure through increasing private debt (largely through mortgages and credit card). As a consequence of these developments the financial sector participates in the ‘consolidation’ and ‘rationalisation’ of the productive base, supports continuing consumer demand while promoting increasing flows to itself, (loan servicing from the borrowers and increasing share of new portfolio investment from the capitalist class. The net effect is the increasing size and power of financial sector. It plays a central role in the building and dismantling of the productive base. It plays and increasing role in balancing production and consumption in a slowly growing economy. It appears that the banks will exercise increasing control over our collective futures. Foreclosing for some. Next

    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 Either way it is clear that the present regime of global trading regulation is far from being either free or fair. The slogan of ‘free trade’ obscures the manoevering of countries and corporations for advantage in relation to trading rules and the projection of economic and military power in this purpose. The present regulatory framework defining ‘free trade’ discriminates in favour of the North. IP rules protect industrial monopolies while the free movement of labour is sharply restricted. Developing countries are forced to open their markets to manufactured goods and services but confront massive protectionism in agricultural markets and dumping. The continuing declining terms of trade (falling prices of commodities compared with manufactured goods and services) means that developing countries have to run faster just to stand still. There is provision for ‘special and differential treatment’ for poor countries in the discourse of trade regulation but minimal commitment to this principle. However, even if trade reform, towards fairer and freer trade, were feasible it is still possible that globalising production would still tend towards a post-Fordist imbalance between a shrinking productive base and the purchasing power of global markets. Protectionism has some drawbacks but can have important benefits in the face of ever-increasing productivity. NextEither way it is clear that the present regime of global trading regulation is far from being either free or fair. The slogan of ‘free trade’ obscures the manoevering of countries and corporations for advantage in relation to trading rules and the projection of economic and military power in this purpose. The present regulatory framework defining ‘free trade’ discriminates in favour of the North. IP rules protect industrial monopolies while the free movement of labour is sharply restricted. Developing countries are forced to open their markets to manufactured goods and services but confront massive protectionism in agricultural markets and dumping. The continuing declining terms of trade (falling prices of commodities compared with manufactured goods and services) means that developing countries have to run faster just to stand still. There is provision for ‘special and differential treatment’ for poor countries in the discourse of trade regulation but minimal commitment to this principle. However, even if trade reform, towards fairer and freer trade, were feasible it is still possible that globalising production would still tend towards a post-Fordist imbalance between a shrinking productive base and the purchasing power of global markets. Protectionism has some drawbacks but can have important benefits in the face of ever-increasing productivity. Next

    27. Alternative strategies of global economic management (Really) free trade? Global Keynesianism (UNCTAD)? National self-sufficiency and regional (south south) trade (Amin)? According to this analysis the threat of ‘over-production’ is currently staved off (at least for the countries of the ‘centre’) by: the enforced transfer of value from periphery to centre (from South to North), and by recycling capita as consumption through debt. Are there alternative strategies? If the global trading regime were reformed so as to support really free and fair trade would that boost global purchasing power? It rather depends on what free and fair trade might entail. The United Nations Conference on Trade and Development (UNCTAD) argues for a kind of global Keynesianism, direct transfers from the rich world to the poor world to boost global purchasing power and assist developing countries to achieve industrial development. Samir Amin argues that a better (and perhaps more practicable) strategy for developing countries would be to work towards a kind of three tiered trading regime with a principal focus on enabling national self-sufficiency backed up by regional South South trading blocks and with participation in global trade as a kind of residual special purpose option. Samir Amin’s model of self-sufficiency and polycentric regional (South South) trade would allow a much broader productive base in both agriculture, manufacturing and services with flow on benefits in terms of local purchasing capacity. NextAccording to this analysis the threat of ‘over-production’ is currently staved off (at least for the countries of the ‘centre’) by: the enforced transfer of value from periphery to centre (from South to North), and by recycling capita as consumption through debt. Are there alternative strategies? If the global trading regime were reformed so as to support really free and fair trade would that boost global purchasing power? It rather depends on what free and fair trade might entail. The United Nations Conference on Trade and Development (UNCTAD) argues for a kind of global Keynesianism, direct transfers from the rich world to the poor world to boost global purchasing power and assist developing countries to achieve industrial development. Samir Amin argues that a better (and perhaps more practicable) strategy for developing countries would be to work towards a kind of three tiered trading regime with a principal focus on enabling national self-sufficiency backed up by regional South South trading blocks and with participation in global trade as a kind of residual special purpose option. Samir Amin’s model of self-sufficiency and polycentric regional (South South) trade would allow a much broader productive base in both agriculture, manufacturing and services with flow on benefits in terms of local purchasing capacity. Next

    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 My purpose in this presentation is to explore the links between global health inequalities and globalisation (which I am using to denote the prevailing regime of global economic governance). I am seeking some clearer ideas about policy directions, a mapping of the major interests and forces at play and perhaps some clearer ideas about strategy for global health activists. I start by identifying and reviewing some key reports, episodes, phases and struggles which were of outstanding significance for global health and for global economic regulation since WW2. I then use the bird’s eye perspective that this kind of historical review provides in order to identify some of the key linkages between health development and the wider debates and struggles regarding global economic and trade regulation. I take some of the major events in the health development chronology and seek to identify the ways in which contemporary economic changes might have influenced them. I also take some of the key economic episodes and events and seek to identify the ways in which they have influenced health development. I also look for episodes or events where health status may have also influenced economic development. My selection of ‘events’ and my analysis of the relations between health development and global economics are organised around a particular interpretation of the political and economic transitions of this period. Because it is complex and will be unfamiliar to many I have outlined this interpretation in some detail. I hope that doing so will assist readers to follow my discussion and evaluate my conclusions and recommendations. We shall now turn to the chronology of events and phases and look in more detail at the interplay of economics and health. Next Finally I have sought to pull some themes from this review which might guide policy making in these two areas and which might inform the analyses and strategies of health activists. My purpose in this presentation is to explore the links between global health inequalities and globalisation (which I am using to denote the prevailing regime of global economic governance). I am seeking some clearer ideas about policy directions, a mapping of the major interests and forces at play and perhaps some clearer ideas about strategy for global health activists. I start by identifying and reviewing some key reports, episodes, phases and struggles which were of outstanding significance for global health and for global economic regulation since WW2. I then use the bird’s eye perspective that this kind of historical review provides in order to identify some of the key linkages between health development and the wider debates and struggles regarding global economic and trade regulation. I take some of the major events in the health development chronology and seek to identify the ways in which contemporary economic changes might have influenced them. I also take some of the key economic episodes and events and seek to identify the ways in which they have influenced health development. I also look for episodes or events where health status may have also influenced economic development. My selection of ‘events’ and my analysis of the relations between health development and global economics are organised around a particular interpretation of the political and economic transitions of this period. Because it is complex and will be unfamiliar to many I have outlined this interpretation in some detail. I hope that doing so will assist readers to follow my discussion and evaluate my conclusions and recommendations. We shall now turn to the chronology of events and phases and look in more detail at the interplay of economics and health. Next Finally I have sought to pull some themes from this review which might guide policy making in these two areas and which might inform the analyses and strategies of health activists.

    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’ In the next few slides I have listed the key events, episodes, phases, reports and struggles that I have included in this analysis, listed in chronological order. My criterion for inclusion was simply that the events and episodes included reflected major transitions and important dynamics of change in relation to global health policy and global economic regulation. Obviously this list is somewhat arbitrary; there are other events and episodes which could have been included and there may be other events and episodes that might have better ‘represented’ some of these phases and dynamics. You will also see that I have given much more space to recent events than to historically remote events. My selection of ‘events’ and my analysis of the relations between health and global economics have been organised around a particular interpretation of the political and economic configurations and transitions of this period and this analysis clearly includes many assumptions about health development and economic development with which many might argue. My discussion and conclusions will therefore be less useful to those who who are not able to share this general interpretation. Because my interpretation of global economic dynamics over the last fifty years has framed my analysis of the links between economic relations and health development and because of the complexity and unfamiliarity of this story for many, I need to take a short digression here to explicate my interpretation of the economic configurations and transformations of the period. 1944-85 We shall start with the period from 1944 to the end of the 1980s and we shall focus first some of the key economic landmarks. Bretton Woods family We start by noting the establishment of the IMF and World Bank at the end of the Second World War. Neither of these organisations were originally designed for the purposes which they assumed in the last quarter of the century. The IMF was originally established to lend to countries to stabilise their currencies against short term fluctuations in trade balances. However, this function had been largely assumed by the commercial banks by the end of the 1960s and the IMF was in some ways an organisation in search of a purpose. However, with the debt trap sprung from the early 1980s it found a new vocation as global financial policeman. The World Bank, likewise, was originally designed to lend for large infrastructure projects and this was its main function through to the late 1980s when it became progressively more involved in the IMF project of global economic restructuring. (REF) Non-Aligned Movement, UNCTAD, G77 and the NIEO The 1950s was dominated by the Cold War but many of the newly independent Third World countries refused to become enfolded into either the Western or the Soviet Blocs and this refusal gave birth to the Non-Aligned Movement at the Bundung Conference of 1955. Part of the purpose of the Non-Aligned Movement was to argue for pro-development economic policies; for a new regime governing world trade that might actually assist poor countries to achieve economic and social development. (REFS) As a consequence of the pressure from the NAM the United Nations Conference on Trade and Development (UNCTAD) was formed and it was in the context of the first UNCTAD conference in 1964 that the Group of 77 developing countries (G77) was formed. The G77 called for a special assembly of the UN in 1974 which called for a New International Economic Order (NIEO). (more details needed about NIEO, REFS) This was probably the highpoint of the power and influence of the NAM and the G77 because (as we have already seen) the economic environment was changing rapidly and becoming much less supportive of TW development. OPEC price rise, stagflation and rise of monetarism, debt trap 1973 saw the first OPEC oil price rise and for a few years the commercial banks were pressing very cheap loans on TW countries and TW corporations. But the global economy was slowing down. During the early to mid 1970s the long post war boom came to an end and a much more difficult economic period set in. During the late 1970s the global economy suffered the twin problems of stagnation and inflation (so-called stagflation), the causes of which and policy responses to which have been discussed earlier. With the rise of monetarism and the ‘fight inflation first’ policies of the early 1980s the debt trap was sprung and poorer developing countries were precipitated into recession and unmanageable debt and progressively into the arms of the IMF. As lender of last resort the IMF imposed tight conditions on rolling over their loans, conditionalities which became known as structural adjustment packages (SAPs). Structural adjustment The SAPs of the mid to late 1980s were crude and brutal. They included: removing import barriers, reorienting agricultural and industry policy from self-sufficiency to export orientation, reducing public spending (reduced services and infrastructure, reduced food subsidies), user charges for public services, currency devaluations (intended to make exports cheaper but also making imports more expensive), labour market deregulation, etc etc. (REFS) The prime purpose of the SAPs was to enable the client countries to generate the export earnings needed to pay their debts. While they were packaged in the language of economic development this was not their principal purpose. Indeed in many ways the SAPs involved a process of de-industrialisation and regression with respect to social and economic development. In a relatively small number of countries SAPs were associated with economic growth and improvements in health and welfare despite widening inequalities. (REFS) However, in most cases, particularly in Africa, structural adjustment had a very negative impact on health status and on health services. (REFS) Around the same time that structural adjustment was having its worst impact the AIDS/HIV epidemic broke and by the late 1980s many TW countries were facing a combined burden of debt, economic slowdown, structural adjustment and AIDS/HIV. We now turn our attention to some of the salient health events of this same period and we shall highlight: the last case of small pox in 1974; the Alma-Ata conference and Declaration of 1978; and the onset of AIDS in the mid 1980s. Small pox eliminated The last case of small pox in 1977 was a great victory. It was achieved primarily through case finding, contact tracing, isolation and vaccination. It was a program that was relatively simple and relatively cheap. It could be implemented effectively with dedicated teams, even in areas with limited health service infrastructure, and did not require dramatic behavioural change at the level of the individual, family or community. The eradication of small pox was the paradigm case of narrow top down vertical disease-centred programs which was the dominant paradigm in WHO thinking at the time and which was also supported by the large bilateral donors and the large philanthropies, in particular, Rockefeller. But not all diseases lend themselves to this approach. TB, malaria and AIDS are all conditions which are both preventable and treatable but which call for broadly based progams which are integrated within comprehensive health care. Primary health care In many countries under colonial rule health service development had been largely restricted to the urban centres. This pattern was in many cases continued on after decolonisation, leaving the rural majority poorly served. However, during the 1960s several countries were experimenting with more comprehensive approaches to health care, moving away from hospital and doctor based care in the cities to the provision of basic health services in the rural areas. There was also new attention given to appropriate workforce strategies and more focus on community mobilisation for prevention. This approach, which was pioneered in different ways in Indonesia, China and Sri Lanka, became known as primary health care (PHC) and was formally enshrined in and endorsed by the Alma-Ata Conference and Declaration. Alma-Ata was a reaction against top down vertical programs and urban centred health service development. The Declaration called for greater attention to the needs of rural populations and for greater reliance on practitioners with basic training (health workers, ‘barefoot doctors’) who were accountable to local communities but who were properly supported by clinical and prevention specialists based more centrally. (REFS) The Alma-Ata Declaration went well beyond a narrow medical or disease-centred model, recognising that sustainable economic development was a critical condition for health development in the Third World. Alma-Ata refers explicitly to the 1974 call for a New International Economic Order, one that facilitated the sovereign economic development of poor countries. Alma-Ata was driven in large part by the spirit of the Non-aligned Movement with support and facilitation from the leaderships of the WHO and UNICEF. By this time Dr Halfdan Mahler was the DG at WHO; he was a committed advocate for the PHC approach although there remained divisions within WHO who were still more oriented to the vertical disease focus. (REFS) In some ways Alma-Ata was the last hurrah of the hope and confidence of the Non-Aligned Movement. The Long Boom had petered out, monetarism was on the rise and the conditions were in place for the debt trap. Within a few years many developing countries were facing recession and economic restructuring under the control of the IMF. The IMF did not regard health development as particularly important; the debt had to be serviced and if that mean dismantling health services or termininating food price subsidies then so be it. PHC debates and legitimation crisis However, as early as 1981 there were voices (see in particular Warren and Walsh (REF)) calling for a return to the orthodoxy of narrow vertical programs (now re-named as ‘selective primary health care’); perhaps recognising that in the conditions of the time the resources necessary for the implementation of comprehensive PHC were not going to be available. From the point of view of donors (Western governments and philanthropies) the practical challenge was about getting outcomes for the aid dollar. The choices appeared to be either waiting for basic health system infrastructure to be developed or investing in more limited disease-centred and M&CH programs which at least offered the promise of achievable outcomes. With the rise of AIDS/HIV and the weakening of basic health services associated with structural adjustment the preference of the donors for a return to vertical programs was consolidated. Advocates of vertical programs saw themselves as accepting the real politic that comprehensive PHC was not happening; they saw the advocates of comprehensive PHC as unreal ideologues. The advocates of comprehensive PHC had two problems with this position. Their first objection was that for many diseases narrow vertical programs simply do not work; smallpox was the exception rather than the paradigm case. Effective prevention and management of conditions like TB, malaria and AIDS/HIV require a wide range of generic programs and services which are either not provided under the vertical programs model or are duplicated specifically for this condition. The second issue motivating the advocates of comprehensive PHC was a concern that fraying livelihoods (loss of markets and jobs, malnutrition, loss of access to education, etc) and the decay of services under the pressure of economic restructuring (reduced budgets, user charges, etc) was actually adding to the disease burden of poor people in poor countries; indeed was now one of the most serious threats to health those communities were facing. From this point of view the effect of the arguments for selective PHC and vertical programs was to obscure the damage being done by economic restructuring and to project the view that health could be improved despite these influences; legitimating an unfair regime. It is important to see the debates about PHC at two levels. At one level there is a debate about two different models for health service development. However, the outcomes of this debate also have important implications for the perceived legitimacy of SAPs, of the IMF in imposing SAPs, of the demand for debt repayment and of the wider regime of global economic governance of which the IMF and debt repayment are part. In relation to the legitimacy of SAPs and the IMF the different positions adopted on PHC versus vertical programs may be seen as variously accepting and legitimating or rejecting and seeking to delegitimate the role of the IMF in imposing SAPs. NextIn the next few slides I have listed the key events, episodes, phases, reports and struggles that I have included in this analysis, listed in chronological order. My criterion for inclusion was simply that the events and episodes included reflected major transitions and important dynamics of change in relation to global health policy and global economic regulation. Obviously this list is somewhat arbitrary; there are other events and episodes which could have been included and there may be other events and episodes that might have better ‘represented’ some of these phases and dynamics. You will also see that I have given much more space to recent events than to historically remote events. My selection of ‘events’ and my analysis of the relations between health and global economics have been organised around a particular interpretation of the political and economic configurations and transitions of this period and this analysis clearly includes many assumptions about health development and economic development with which many might argue. My discussion and conclusions will therefore be less useful to those who who are not able to share this general interpretation. Because my interpretation of global economic dynamics over the last fifty years has framed my analysis of the links between economic relations and health development and because of the complexity and unfamiliarity of this story for many, I need to take a short digression here to explicate my interpretation of the economic configurations and transformations of the period. 1944-85 We shall start with the period from 1944 to the end of the 1980s and we shall focus first some of the key economic landmarks. Bretton Woods family We start by noting the establishment of the IMF and World Bank at the end of the Second World War. Neither of these organisations were originally designed for the purposes which they assumed in the last quarter of the century. The IMF was originally established to lend to countries to stabilise their currencies against short term fluctuations in trade balances. However, this function had been largely assumed by the commercial banks by the end of the 1960s and the IMF was in some ways an organisation in search of a purpose. However, with the debt trap sprung from the early 1980s it found a new vocation as global financial policeman. The World Bank, likewise, was originally designed to lend for large infrastructure projects and this was its main function through to the late 1980s when it became progressively more involved in the IMF project of global economic restructuring. (REF) Non-Aligned Movement, UNCTAD, G77 and the NIEO The 1950s was dominated by the Cold War but many of the newly independent Third World countries refused to become enfolded into either the Western or the Soviet Blocs and this refusal gave birth to the Non-Aligned Movement at the Bundung Conference of 1955. Part of the purpose of the Non-Aligned Movement was to argue for pro-development economic policies; for a new regime governing world trade that might actually assist poor countries to achieve economic and social development. (REFS) As a consequence of the pressure from the NAM the United Nations Conference on Trade and Development (UNCTAD) was formed and it was in the context of the first UNCTAD conference in 1964 that the Group of 77 developing countries (G77) was formed. The G77 called for a special assembly of the UN in 1974 which called for a New International Economic Order (NIEO). (more details needed about NIEO, REFS) This was probably the highpoint of the power and influence of the NAM and the G77 because (as we have already seen) the economic environment was changing rapidly and becoming much less supportive of TW development. OPEC price rise, stagflation and rise of monetarism, debt trap 1973 saw the first OPEC oil price rise and for a few years the commercial banks were pressing very cheap loans on TW countries and TW corporations. But the global economy was slowing down. During the early to mid 1970s the long post war boom came to an end and a much more difficult economic period set in. During the late 1970s the global economy suffered the twin problems of stagnation and inflation (so-called stagflation), the causes of which and policy responses to which have been discussed earlier. With the rise of monetarism and the ‘fight inflation first’ policies of the early 1980s the debt trap was sprung and poorer developing countries were precipitated into recession and unmanageable debt and progressively into the arms of the IMF. As lender of last resort the IMF imposed tight conditions on rolling over their loans, conditionalities which became known as structural adjustment packages (SAPs). Structural adjustment The SAPs of the mid to late 1980s were crude and brutal. They included: removing import barriers, reorienting agricultural and industry policy from self-sufficiency to export orientation, reducing public spending (reduced services and infrastructure, reduced food subsidies), user charges for public services, currency devaluations (intended to make exports cheaper but also making imports more expensive), labour market deregulation, etc etc. (REFS) The prime purpose of the SAPs was to enable the client countries to generate the export earnings needed to pay their debts. While they were packaged in the language of economic development this was not their principal purpose. Indeed in many ways the SAPs involved a process of de-industrialisation and regression with respect to social and economic development. In a relatively small number of countries SAPs were associated with economic growth and improvements in health and welfare despite widening inequalities. (REFS) However, in most cases, particularly in Africa, structural adjustment had a very negative impact on health status and on health services. (REFS) Around the same time that structural adjustment was having its worst impact the AIDS/HIV epidemic broke and by the late 1980s many TW countries were facing a combined burden of debt, economic slowdown, structural adjustment and AIDS/HIV. We now turn our attention to some of the salient health events of this same period and we shall highlight: the last case of small pox in 1974; the Alma-Ata conference and Declaration of 1978; and the onset of AIDS in the mid 1980s. Small pox eliminated The last case of small pox in 1977 was a great victory. It was achieved primarily through case finding, contact tracing, isolation and vaccination. It was a program that was relatively simple and relatively cheap. It could be implemented effectively with dedicated teams, even in areas with limited health service infrastructure, and did not require dramatic behavioural change at the level of the individual, family or community. The eradication of small pox was the paradigm case of narrow top down vertical disease-centred programs which was the dominant paradigm in WHO thinking at the time and which was also supported by the large bilateral donors and the large philanthropies, in particular, Rockefeller. But not all diseases lend themselves to this approach. TB, malaria and AIDS are all conditions which are both preventable and treatable but which call for broadly based progams which are integrated within comprehensive health care. Primary health care In many countries under colonial rule health service development had been largely restricted to the urban centres. This pattern was in many cases continued on after decolonisation, leaving the rural majority poorly served. However, during the 1960s several countries were experimenting with more comprehensive approaches to health care, moving away from hospital and doctor based care in the cities to the provision of basic health services in the rural areas. There was also new attention given to appropriate workforce strategies and more focus on community mobilisation for prevention. This approach, which was pioneered in different ways in Indonesia, China and Sri Lanka, became known as primary health care (PHC) and was formally enshrined in and endorsed by the Alma-Ata Conference and Declaration. Alma-Ata was a reaction against top down vertical programs and urban centred health service development. The Declaration called for greater attention to the needs of rural populations and for greater reliance on practitioners with basic training (health workers, ‘barefoot doctors’) who were accountable to local communities but who were properly supported by clinical and prevention specialists based more centrally. (REFS) The Alma-Ata Declaration went well beyond a narrow medical or disease-centred model, recognising that sustainable economic development was a critical condition for health development in the Third World. Alma-Ata refers explicitly to the 1974 call for a New International Economic Order, one that facilitated the sovereign economic development of poor countries. Alma-Ata was driven in large part by the spirit of the Non-aligned Movement with support and facilitation from the leaderships of the WHO and UNICEF. By this time Dr Halfdan Mahler was the DG at WHO; he was a committed advocate for the PHC approach although there remained divisions within WHO who were still more oriented to the vertical disease focus. (REFS) In some ways Alma-Ata was the last hurrah of the hope and confidence of the Non-Aligned Movement. The Long Boom had petered out, monetarism was on the rise and the conditions were in place for the debt trap. Within a few years many developing countries were facing recession and economic restructuring under the control of the IMF. The IMF did not regard health development as particularly important; the debt had to be serviced and if that mean dismantling health services or termininating food price subsidies then so be it. PHC debates and legitimation crisis However, as early as 1981 there were voices (see in particular Warren and Walsh (REF)) calling for a return to the orthodoxy of narrow vertical programs (now re-named as ‘selective primary health care’); perhaps recognising that in the conditions of the time the resources necessary for the implementation of comprehensive PHC were not going to be available. From the point of view of donors (Western governments and philanthropies) the practical challenge was about getting outcomes for the aid dollar. The choices appeared to be either waiting for basic health system infrastructure to be developed or investing in more limited disease-centred and M&CH programs which at least offered the promise of achievable outcomes. With the rise of AIDS/HIV and the weakening of basic health services associated with structural adjustment the preference of the donors for a return to vertical programs was consolidated. Advocates of vertical programs saw themselves as accepting the real politic that comprehensive PHC was not happening; they saw the advocates of comprehensive PHC as unreal ideologues. The advocates of comprehensive PHC had two problems with this position. Their first objection was that for many diseases narrow vertical programs simply do not work; smallpox was the exception rather than the paradigm case. Effective prevention and management of conditions like TB, malaria and AIDS/HIV require a wide range of generic programs and services which are either not provided under the vertical programs model or are duplicated specifically for this condition. The second issue motivating the advocates of comprehensive PHC was a concern that fraying livelihoods (loss of markets and jobs, malnutrition, loss of access to education, etc) and the decay of services under the pressure of economic restructuring (reduced budgets, user charges, etc) was actually adding to the disease burden of poor people in poor countries; indeed was now one of the most serious threats to health those communities were facing. From this point of view the effect of the arguments for selective PHC and vertical programs was to obscure the damage being done by economic restructuring and to project the view that health could be improved despite these influences; legitimating an unfair regime. It is important to see the debates about PHC at two levels. At one level there is a debate about two different models for health service development. However, the outcomes of this debate also have important implications for the perceived legitimacy of SAPs, of the IMF in imposing SAPs, of the demand for debt repayment and of the wider regime of global economic governance of which the IMF and debt repayment are part. In relation to the legitimacy of SAPs and the IMF the different positions adopted on PHC versus vertical programs may be seen as variously accepting and legitimating or rejecting and seeking to delegitimate the role of the IMF in imposing SAPs. Next

    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 1987 - 2000 SAPs under question By the mid and late 1980s there was a vigorous debate in full swing about harms and benefits of SAPs. Concerns about the effects on health and health services and on other social sectors were important considerations in these debates. There was considerable pressure within the UN system to recognise the damage being done to the social and economic development in many developing countries by the debt crisis and the SAPs which the IMF was putting in place to ensure debt repayment. In 1987 UNICEF sponsored a collection of essays about structural adjustment entitled ‘Adjustment with a human face’, a title which invites the interpretation that the implementation of adjustment hitherto had been inhuman. (REF). In 1992 the WHO published a similar monograph entitled, ‘Health dimensions of economic reform’ which also (in the most gentle way) suggested that there could be health costs associated with the IMF’s policy model (REF). By the late 1980s the WB was becoming more actively involved in structural adjustment providing additional loans to supplement IMF lending, loans that were of course conditional upon adopting the economic policies required by the IMF. The Bank was somewhat more sensitive to the fraying legitimacy of structural adjustment than was the Fund. Despite its rhetoric about economic development, the Fund had always been quite clear that its main role was to enforce repayment of the debt and integration of developing countries within the global economy. However, the Bank was now exploring a new mission which included the abolition of poverty as well as the promotion of economic ‘development’ (and integration). Investing in health For whatever reason the Bank felt obliged to respond to the crticisms of structural adjustment and in particular of its effects on health and in 1993 published a major report, entitled ‘Investing in health’ which argued that structural adjustment (properly designed) was compatible with health development. This was a highly polished report but ultimately self-serving with abundant examples of one-sided arguments and special pleading. A particular example of special pleading, already noted at the beginning of this paper, was the Bank’s ‘virtuous cycle’ approach to the relationships between economics and health. It is too simple to say that better health contributes to economic development and economic development contributes to better health. What the report does not say is that industrialisation in England, the US and in Russia was achieved through converting human health into capital and accepting high morbidity and mortality rates as the cost of development. Occupational injury and appalling living conditions were costs of production which were ‘externalised’ which is to say they are borne by the workers and the environment rather than by the enterprise. This is a dynamic which continues today: occupational injury, loss of livelihood and tobacco-related disease illustrate some of the ways that economic growth is presently based on the ‘consumption’ of people’s health. We should also note the ‘new interventionism’ which forms the crux of the Bank’s health policy in ‘Investing in health’. The report goes beyond the orthodox vertical programs approach to argue for a small number of specific ‘interventions’ which are ranked in terms of cost-effectiveness (using DALYs as the metric of health outcomes associated with each intervention). These interventions are presented as commodities which can be purchased for a price and a volume and which will yield defined measurable health benefits (measured as DALYs averted). No evidence is presented to support the claim that these interventions can be sustainably and effectively implemented without more comprehensive health system development. The economists appear to assume that they will completely bypass existing health system infrastructure and programs in that they use average rather than marginal costs in their cost effectiveness calculations. What is not spelled out clearly in ‘Investing in health’ is how the new health development principles are to be integrated within structural adjustment programs. The report invites images of IMF economists adding the preferred ‘interventions’ to their standard conditionalities. PRSPs The answer to this question was provided in 1999 when the Bank and the Fund unveiled the new machinery for structural adjustment, namely the requirement for Poverty Reduction Strategy Papers (PRSPs). PRSPs are to be produced by the country seeking IMF support. The countries are required to present an integrated set of strategies which will (i) generate the revenues required to pay back the debt; (ii) contribute to economic development (and integration within the global economy which is assumed to be synonymous with economic development); and (iii) reduce poverty. If countries produce acceptable PRSPs they will be provided with the first tranche of loan funds; they will find that the conditions are tightened when they re-present for subsequent tranches. While the links between ‘Investing in health’ and the introduction of PRSPs are indirect we can assume that the kinds of health policies which the Bank and the Fund will expect to see in PRSPs will follow the narrow interventionism of the 1993 report. ‘Investing in health’ can be seen as a major attempt to re-legitimise structural adjustment and the role of the IMF in policing repayment of the debt and economic integration, in particular, in response to the widening concerns that these policies were damaging rather than promoting health. Again we see the significance of the vertical programs approach, now rendered as commodified interventions, in sustaining the claim that structural adjustment can be good for your health. With the emergence of the PRSP we can see that responsibility for the successful design and implementation of the new vertical programs will lie with the applicant countries so it will be their fault if the health gains promised are not realised. WTO Perhaps the main event in economic governance and regulation during the 1987-99 period was the establishment of the WTO in 1995 and the subsequent meetings, statements and disputes associated with the WTO. Two of the agreements administered through the WTO have attracted particular attention in health policy circles. The first of these is the TRIPS agreement, in particular, its implications in relation to pharmaceuticals and in particular, retrovirals for AIDS/HIV. The other agreement which has attracted much comment in the health policy media is the GATS. The role of intellectual property rules in preventing poor countries accessing cheap drugs for AIDS/HIV has been a growing issue from ... when it became evident that drug treatment for AIDS was extending lives. With the introduction of highly active anti retroviral treatments (HART) in .... the need for AIDS patients in developing countries to get access to these drugs at affordable prices became increasingly urgent. Access to expensive drugs The issue of affordable access to modern drugs antedated the establishment of the WTO. As early as 1991 the US Trade Representative (USTR) was putting pressure on Thailand for authorising the manufacture of drugs still under patent through its government production facilities (http://www.cptech.org/ip/health/c/thailand/thailand.html). Thailand had also modified its patent laws to require advanced notice of new drug applications and to make information provided to the regulators available to generic manufacturers in advance of the expiry of the patent so as to accelerate their production. The US pharmaceuticals lobby maintains a global watch over such threats and the USTR acts promptly on the urging of big pharma (which is of course also a big contributor to politicians’ election funds). The USTR threatened Thailand with Super 301, a US trade law which authorises the US to implement trade sanctions against any country which is found to be harming the interests of US corporations. Similarly Brazil has been subject to threats and pressures by the USTR on behalf of big pharma because of its policies of compulsory licensing and local production of anti-retrovirals. Perhaps the most high profile case however was the South African case from 1995-98 where 38 large pharmaceutical companies took the South African government to court (in South Africa) arguing that the legislative provisions for parallel importation of antiretrovirals (sourcing public purchasing in the cheapest market overseas and bypassing authorised local representatives) contravened South African intellectual property laws. The legal issue was never decided. The case created such a storm globally that in April 2001 the companies withdrew their complaints and agreed to pay the costs of the defendant. The defeat of the drug companies in South Africa involved a massive struggle in South Africa (led by the Treatment Action Coalition) and the organisation of a massive global protest (by MSF amongst others). The campaign illustrated the role that the internet now plays in such campaigns with organisations such as CPT playing a key resourcing role. The drug companies withdrew because of they were bringing into disrepute the intellectual property rights upon which they depend and which are integral to the capitalist system itself. This was a battle about legitimacy and they lost. Agriculture While the TRIPS agreement and the GATS are directly and explicitly relevant to health, the agreement which has most impact on the health of people in developing countries is probably the Agreement on Agriculture (AoA) which continues to allow the US, Europe and Japan to protect their domestic markets while forcing agricultural producers in developing countries to open their markets to manufactured and agricultural imports. After several generations of SAPs in which poor countries have all been told to switch to producing the same range of agricultural commodities for export the prices for these products have fallen to below cost leaving the farmers without subsistence and without income. The dumping of subsidised products into the cities of developing countries is a further blow to the farmers of the hinterlands. While the rhetoric of the WTO is about ‘free trade’ it may be more useful to see it as driving towards a slightly different objective, namely the integration of all countries into the global capitalist marketplace without any real expectation of exposing the farmers of Europe, Japan and the US to international competition. In the light of the theory of post-Fordist (or structural) over-production, outlined in the first part of this paper, the forced economic integration of developing countries into a unfair global trading regime is likely to convert billions of small farmers ( ‘uneconomic’ when required to compete with subsidised oil-based industrialised agriculture) into a globalised ‘reserve army of the unemployed’. MAI and the Singapore issues During this decade the push for global economic integration was extended from the realm of trade into the realm of investment also. From 1995-98 the OECD commenced negotiations towards a Multilateral Agreement on Investment which would constrain national policy in regulating foreign investment. Under the MAI it would become illegal to impose conditions on corporations seeking to invest locally that were not required of domestic companies. This would prohibit local content laws for example or local production quotas. The MAI was defeated by a global campaign which was carried by social movements and held together by the internet. However, within two years the campaign for an MAI had been shifted into the WTO under the guise of the ‘Singapore issues’. The four ‘Singapore issues’ deal with investment, government procurement, competition policy and transparency. These were issues which were raised at the Ministerial Meeting of the WTO in Singapore in 1997 but upon which the Ministerial Council did not agree to proceed. Rather, as a compromise measure, the Council authorised the further study of these four issues. Nonetheless the rich world countries, especially Europe, Japan and the US, have continued to drive consideration of these issues within the WTO with a view to getting a binding agreement. At the 2003 Cancun Ministerial Meeting the rich world used the ‘Singapore issues’ as a counter to the pressure from the G21 developing countries to review agricultural protection and subsidy by the rich nations. Undoubtedly the Singapore issues foreshadow a further (and difficult to reverse) step towards global economic integration; integration into an unfair regime of global governance. In the light of the theory of post-Fordist (structural) over-production further integration into the global economy could have the effect of accelerating the transfer of production from widely distributed settings to a smaller zone of most ‘efficient’ producers (where efficiency is determined by access to cheap oil, massive subsidies and domestic protection, extended monopoly protection with respect to intellectual property rights, and tightly restricted labour mobility). The effect of prioritising ‘efficiency’ over livelihood in this way would be likely to have very negative impacts on people’s health. Tamany Hall and the G21+C However, since the 1997 Singapore Ministerial significant changes have been taking place within and around the WTO. Accounts of insiders who participated in the Singapore Ministerial describe the smooth but radical usurpation of the basic rights of small countries to participate and express their views and be consulted about what was going on. The rich countries attempted to repeat their Tamany Hall tactics at the next Ministerial in Seattle in 1999 but we confronted with massive protests outside and firm resistance inside. Tamany Hall was further tamed at Doha in 2001, one consequence of which was that the rich countries had to accept the Doha Statement on Public Health. Finally in Cancun in 2003 the G8 were confronted with a much better organised Third World led by the G21 + China. The result was a stalemate which benefits no-one but which may presage more constructive policy reform in the future. Meanwhile the US has made it clear that it will prioritise regional free trade agreements in the short to medium term rather than work solely through the WTO. The American century? The break up of the Soviet Union in 1989 saw the end of the ‘stability’ of mutually assured destruction and the emergence of unipolar US hegemony. The bullying of Thailand for producing cheap drugs for AIDS patients in 1991 set the tone for the new American Century. However there are limits to US power. In December 2000 at a venue outside Dakha in Bangladesh the first International People’s Health Assembly was held with several thousand delegates representing over 50 countries. The People’s Health Assembly may be taken as a mark of the growing consciousness and resistance among health activists world wide and the growing sense of solidarity and common purpose. Next1987 - 2000 SAPs under question By the mid and late 1980s there was a vigorous debate in full swing about harms and benefits of SAPs. Concerns about the effects on health and health services and on other social sectors were important considerations in these debates. There was considerable pressure within the UN system to recognise the damage being done to the social and economic development in many developing countries by the debt crisis and the SAPs which the IMF was putting in place to ensure debt repayment. In 1987 UNICEF sponsored a collection of essays about structural adjustment entitled ‘Adjustment with a human face’, a title which invites the interpretation that the implementation of adjustment hitherto had been inhuman. (REF). In 1992 the WHO published a similar monograph entitled, ‘Health dimensions of economic reform’ which also (in the most gentle way) suggested that there could be health costs associated with the IMF’s policy model (REF). By the late 1980s the WB was becoming more actively involved in structural adjustment providing additional loans to supplement IMF lending, loans that were of course conditional upon adopting the economic policies required by the IMF. The Bank was somewhat more sensitive to the fraying legitimacy of structural adjustment than was the Fund. Despite its rhetoric about economic development, the Fund had always been quite clear that its main role was to enforce repayment of the debt and integration of developing countries within the global economy. However, the Bank was now exploring a new mission which included the abolition of poverty as well as the promotion of economic ‘development’ (and integration). Investing in health For whatever reason the Bank felt obliged to respond to the crticisms of structural adjustment and in particular of its effects on health and in 1993 published a major report, entitled ‘Investing in health’ which argued that structural adjustment (properly designed) was compatible with health development. This was a highly polished report but ultimately self-serving with abundant examples of one-sided arguments and special pleading. A particular example of special pleading, already noted at the beginning of this paper, was the Bank’s ‘virtuous cycle’ approach to the relationships between economics and health. It is too simple to say that better health contributes to economic development and economic development contributes to better health. What the report does not say is that industrialisation in England, the US and in Russia was achieved through converting human health into capital and accepting high morbidity and mortality rates as the cost of development. Occupational injury and appalling living conditions were costs of production which were ‘externalised’ which is to say they are borne by the workers and the environment rather than by the enterprise. This is a dynamic which continues today: occupational injury, loss of livelihood and tobacco-related disease illustrate some of the ways that economic growth is presently based on the ‘consumption’ of people’s health. We should also note the ‘new interventionism’ which forms the crux of the Bank’s health policy in ‘Investing in health’. The report goes beyond the orthodox vertical programs approach to argue for a small number of specific ‘interventions’ which are ranked in terms of cost-effectiveness (using DALYs as the metric of health outcomes associated with each intervention). These interventions are presented as commodities which can be purchased for a price and a volume and which will yield defined measurable health benefits (measured as DALYs averted). No evidence is presented to support the claim that these interventions can be sustainably and effectively implemented without more comprehensive health system development. The economists appear to assume that they will completely bypass existing health system infrastructure and programs in that they use average rather than marginal costs in their cost effectiveness calculations. What is not spelled out clearly in ‘Investing in health’ is how the new health development principles are to be integrated within structural adjustment programs. The report invites images of IMF economists adding the preferred ‘interventions’ to their standard conditionalities. PRSPs The answer to this question was provided in 1999 when the Bank and the Fund unveiled the new machinery for structural adjustment, namely the requirement for Poverty Reduction Strategy Papers (PRSPs). PRSPs are to be produced by the country seeking IMF support. The countries are required to present an integrated set of strategies which will (i) generate the revenues required to pay back the debt; (ii) contribute to economic development (and integration within the global economy which is assumed to be synonymous with economic development); and (iii) reduce poverty. If countries produce acceptable PRSPs they will be provided with the first tranche of loan funds; they will find that the conditions are tightened when they re-present for subsequent tranches. While the links between ‘Investing in health’ and the introduction of PRSPs are indirect we can assume that the kinds of health policies which the Bank and the Fund will expect to see in PRSPs will follow the narrow interventionism of the 1993 report. ‘Investing in health’ can be seen as a major attempt to re-legitimise structural adjustment and the role of the IMF in policing repayment of the debt and economic integration, in particular, in response to the widening concerns that these policies were damaging rather than promoting health. Again we see the significance of the vertical programs approach, now rendered as commodified interventions, in sustaining the claim that structural adjustment can be good for your health. With the emergence of the PRSP we can see that responsibility for the successful design and implementation of the new vertical programs will lie with the applicant countries so it will be their fault if the health gains promised are not realised. WTO Perhaps the main event in economic governance and regulation during the 1987-99 period was the establishment of the WTO in 1995 and the subsequent meetings, statements and disputes associated with the WTO. Two of the agreements administered through the WTO have attracted particular attention in health policy circles. The first of these is the TRIPS agreement, in particular, its implications in relation to pharmaceuticals and in particular, retrovirals for AIDS/HIV. The other agreement which has attracted much comment in the health policy media is the GATS. The role of intellectual property rules in preventing poor countries accessing cheap drugs for AIDS/HIV has been a growing issue from ... when it became evident that drug treatment for AIDS was extending lives. With the introduction of highly active anti retroviral treatments (HART) in .... the need for AIDS patients in developing countries to get access to these drugs at affordable prices became increasingly urgent. Access to expensive drugs The issue of affordable access to modern drugs antedated the establishment of the WTO. As early as 1991 the US Trade Representative (USTR) was putting pressure on Thailand for authorising the manufacture of drugs still under patent through its government production facilities (http://www.cptech.org/ip/health/c/thailand/thailand.html). Thailand had also modified its patent laws to require advanced notice of new drug applications and to make information provided to the regulators available to generic manufacturers in advance of the expiry of the patent so as to accelerate their production. The US pharmaceuticals lobby maintains a global watch over such threats and the USTR acts promptly on the urging of big pharma (which is of course also a big contributor to politicians’ election funds). The USTR threatened Thailand with Super 301, a US trade law which authorises the US to implement trade sanctions against any country which is found to be harming the interests of US corporations. Similarly Brazil has been subject to threats and pressures by the USTR on behalf of big pharma because of its policies of compulsory licensing and local production of anti-retrovirals. Perhaps the most high profile case however was the South African case from 1995-98 where 38 large pharmaceutical companies took the South African government to court (in South Africa) arguing that the legislative provisions for parallel importation of antiretrovirals (sourcing public purchasing in the cheapest market overseas and bypassing authorised local representatives) contravened South African intellectual property laws. The legal issue was never decided. The case created such a storm globally that in April 2001 the companies withdrew their complaints and agreed to pay the costs of the defendant. The defeat of the drug companies in South Africa involved a massive struggle in South Africa (led by the Treatment Action Coalition) and the organisation of a massive global protest (by MSF amongst others). The campaign illustrated the role that the internet now plays in such campaigns with organisations such as CPT playing a key resourcing role. The drug companies withdrew because of they were bringing into disrepute the intellectual property rights upon which they depend and which are integral to the capitalist system itself. This was a battle about legitimacy and they lost. Agriculture While the TRIPS agreement and the GATS are directly and explicitly relevant to health, the agreement which has most impact on the health of people in developing countries is probably the Agreement on Agriculture (AoA) which continues to allow the US, Europe and Japan to protect their domestic markets while forcing agricultural producers in developing countries to open their markets to manufactured and agricultural imports. After several generations of SAPs in which poor countries have all been told to switch to producing the same range of agricultural commodities for export the prices for these products have fallen to below cost leaving the farmers without subsistence and without income. The dumping of subsidised products into the cities of developing countries is a further blow to the farmers of the hinterlands. While the rhetoric of the WTO is about ‘free trade’ it may be more useful to see it as driving towards a slightly different objective, namely the integration of all countries into the global capitalist marketplace without any real expectation of exposing the farmers of Europe, Japan and the US to international competition. In the light of the theory of post-Fordist (or structural) over-production, outlined in the first part of this paper, the forced economic integration of developing countries into a unfair global trading regime is likely to convert billions of small farmers ( ‘uneconomic’ when required to compete with subsidised oil-based industrialised agriculture) into a globalised ‘reserve army of the unemployed’. MAI and the Singapore issues During this decade the push for global economic integration was extended from the realm of trade into the realm of investment also. From 1995-98 the OECD commenced negotiations towards a Multilateral Agreement on Investment which would constrain national policy in regulating foreign investment. Under the MAI it would become illegal to impose conditions on corporations seeking to invest locally that were not required of domestic companies. This would prohibit local content laws for example or local production quotas. The MAI was defeated by a global campaign which was carried by social movements and held together by the internet. However, within two years the campaign for an MAI had been shifted into the WTO under the guise of the ‘Singapore issues’. The four ‘Singapore issues’ deal with investment, government procurement, competition policy and transparency. These were issues which were raised at the Ministerial Meeting of the WTO in Singapore in 1997 but upon which the Ministerial Council did not agree to proceed. Rather, as a compromise measure, the Council authorised the further study of these four issues. Nonetheless the rich world countries, especially Europe, Japan and the US, have continued to drive consideration of these issues within the WTO with a view to getting a binding agreement. At the 2003 Cancun Ministerial Meeting the rich world used the ‘Singapore issues’ as a counter to the pressure from the G21 developing countries to review agricultural protection and subsidy by the rich nations. Undoubtedly the Singapore issues foreshadow a further (and difficult to reverse) step towards global economic integration; integration into an unfair regime of global governance. In the light of the theory of post-Fordist (structural) over-production further integration into the global economy could have the effect of accelerating the transfer of production from widely distributed settings to a smaller zone of most ‘efficient’ producers (where efficiency is determined by access to cheap oil, massive subsidies and domestic protection, extended monopoly protection with respect to intellectual property rights, and tightly restricted labour mobility). The effect of prioritising ‘efficiency’ over livelihood in this way would be likely to have very negative impacts on people’s health. Tamany Hall and the G21+C However, since the 1997 Singapore Ministerial significant changes have been taking place within and around the WTO. Accounts of insiders who participated in the Singapore Ministerial describe the smooth but radical usurpation of the basic rights of small countries to participate and express their views and be consulted about what was going on. The rich countries attempted to repeat their Tamany Hall tactics at the next Ministerial in Seattle in 1999 but we confronted with massive protests outside and firm resistance inside. Tamany Hall was further tamed at Doha in 2001, one consequence of which was that the rich countries had to accept the Doha Statement on Public Health. Finally in Cancun in 2003 the G8 were confronted with a much better organised Third World led by the G21 + China. The result was a stalemate which benefits no-one but which may presage more constructive policy reform in the future. Meanwhile the US has made it clear that it will prioritise regional free trade agreements in the short to medium term rather than work solely through the WTO. The American century? The break up of the Soviet Union in 1989 saw the end of the ‘stability’ of mutually assured destruction and the emergence of unipolar US hegemony. The bullying of Thailand for producing cheap drugs for AIDS patients in 1991 set the tone for the new American Century. However there are limits to US power. In December 2000 at a venue outside Dakha in Bangladesh the first International People’s Health Assembly was held with several thousand delegates representing over 50 countries. The People’s Health Assembly may be taken as a mark of the growing consciousness and resistance among health activists world wide and the growing sense of solidarity and common purpose. Next

    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 2001-2004 CMH Report During the early 1990s World Bank lending for health projects far eclipsed funding made available through the WHO. As the premier giver of money for health system development the Bank was also becoming as the premier authority on health policy. WHO (under Brundtland) adopted the ‘if you can’t beat them join them’ adage and engaged the Bank in a number of partnerships and collaborations. In 2000 Brundtland (with support from the World Bank and Gates) commissioned a report on Macroeconomics and Health. The terms of reference given to the Commission were all about demonstrating how important population health is as an input to economic development. Presumably the theory was that the IMF might be persuaded to more health friendly policies if they understood that health contributes to economic development. (This further presumes that the IMF includes amongst its purposes economic development rather than simply debt repayment and economic integration.) Or perhaps that the ministers for finance of the rich countries might be persuaded to donate more money to the WHO and the various global funds it was sponsoring if they realised that health is an input to economic development. (Of course, in the light of the theory of post-Fordist structural over-production, the ministers of finance might have good reason for not encouraging the economic development of Third World countries.) In its June 2001 report the Commission (CMH) repeated the virtuous cycle theory from the World Bank’s 1993 report (health contributes to growth contributes to health). It also repeated the focus on specific interventions which had characterised the 1993 report although overlaid with a new jargon, that of ‘scaling up’. The Commission clearly recognised the criticisms of previous vertical programs and intervention-focused reports about the need for comprehensive health system development and presented a new concept, namely ‘close to client’ (or CTC) health system development. How the (presumably comprehensive) CTC model was to interface with the vertical implementation of the selected interventions was nowhere clarified. The Commission says nothing about why poor countries can’t afford to develop comprehensive health systems themselves. It says nothing about the transfer of value from the South to the North associated with repayment of debt, declining terms of trade and a trading regime with structured discrimination against poor countries. The Commission proposes that the funding for the ‘scaling up’ of the selected interventions will come from aid from the rich countries (and discounts from pharmaceutical corporations); ‘crumbs off the rich man’s table’ (Ravi Narayan). The Commission proposes that these funds will be managed through the Global Fund for AIDS, TB and Malaria and will be disbursed through a process based on the WB/IMF PRSP process. Why should the rich countries increase their official development assistance to the very ambitious levels foreshadowed by the CMH? The basic argument of the report is not about health and economic development; it is about health and social stability. In some very prescient passages the authors of the report warn the leaders of the G8 and the leaders of the global corporates that ‘globalisation is on trial’ and warns against violence and insurrection if the immiseration and alienation of millions of Third World peoples is not arrested. Three months later came the bombings of the World Trade Centre and the Pentagon in Washington. Disappointingly, rather than funding the Global Fund as recommended by the CMH, the US launched a War on Terrorism, starting with Afghanistan and Iraq but threatening to invade a long list of ‘rogue states’. It is now history that the US found the invasion of Iraq much more costly than they had first anticipated which appears to have curbed its pre-emptive unilateralism, at least in the short term. The CMH can be read at many levels. At the level of institutional politics there was clearly a degree of manoevering between WHO and the Bank with the Bank endorsing the technical leadership of WHO in return for the WHO endorsing the Bank’s economic pre-eminence. Among the individuals contributing to the work of the Commission there may have been some who were beguiled by the vision of disbursing billions of dollars to cure the world’s ills. However, against an analysis which problematises the legitimacy of the contemporary regime of economic governance the report of the CMH clearly follows precedent in denying (through silence) the role of the contemporary regime in the continued impoverishment and calling on self-interested charity as the principal pathway to succour for the poor. In this respect the report may be represented as the WHO lending its authority to legitimate (perhaps re-legitimate) the contemporary global regime of economic governance on behalf of the Bank and the Fund. Again the vertical interventionist approach and the promise that it offers of practicable improvements in health plays an important role in this legitimation strategy. Big pharma and access to drugs We leave the CMH at this point and return to the issue of access to drugs. We have already noted the defeat of big pharma in South Africa in April 2001 and the role of the TAC in South African and MSF and others leading a global social movement committed to ensuring access to anti-retrovirals for AIDS patients in poor countries. However, even as big pharma was buckling in Johannesburg, the Government of Norway was hosting (April 2001) a meeting which included WHO, UNICEF, the World Bank, the global pharmaceutical giants and a small group of NGOs to discuss strategies to deal with access by poor countries to expensive drugs generally. The meeting considered all options including compulsory licensing but adopted the more conservative pharma-friendly option of differential pricing. This position was to be expected from the World Bank but from the WHO it was disappointing; perhaps a warning to those who might have expected more. The conservatism of this position (differential pricing) was underlined seven months later when the WTO Ministerial Council meeting in November 2001 in Doha adopted the Doha Statement on TRIPS and Public Health. The principle underlying this statement was that public health should take priority over trade rules. The Statement affirmed the legitimacy of compulsory licensing and addressed also the barriers facing small countries who would not be able to use compulsory licensing to meet their own needs because they did not have a domestic generics industry. The Doha meeting commissioned a process which was to work out the detailed rules and arrangements under which poor countries could use compulsory licensing for domestic or export purposes (for small countries without their own generic industry). The US has fought a complex rearguard action against implementing these provisions and continues to do so. Nevertheless the writing was on the wall with regard to the WTO as a compliant vehicle for US economic policy and the alternative strategy of multiple bilateral and regional ‘free trade’ agreements was being implemented at the same time. In Oct 2002 Bristol Myers Squib was defeated in a long running case about the Thai Government’s right to manufacture DDI for local consumption. After a decade of continuing pressure on Thailand the USTR announced in 2000 that the US accepted Thailand’s right to produce DDI within the terms of its own intellectual property laws. However, in Oct 2003 negotiations between Thailand and the US towards a US Thai FTA commenced with compulsory licensing, data access and extended IPRs on the table. We have already noted how the Cancun meeting of the WTO ended in stalemate in November 2003 with a deadlock over agriculture and the so-called ‘Singapore issues’. Part of the significance of the Cancun meeting was that the the G21+China stood up to the G8 in demanding reform of agriculture. However, the stalemate at Cancun also led to a further turn by the US to rely more on bilateral and regional FTAs instead of the multilateral forum of WTO. Even here however, there are limits to US power and at a meeting in Miami in January 2004 to negotiate a free trade of the Americas agreement the US preferred model was defeated by Latin America (leading to so-called FTAA lite). US pre-emptive unilateralism and the need to maintain confidence in the US dollar The Iraqi resistance to the US-led invasion appears to have had a sobering impact on US pre-emptive unilateralism and (at the time of writing) further military adventures look slightly less likely. It may be useful to inquire more deeply into US pre-emptive unilateralism. At one level we can interpret it simply as the predictable behaviour of a superpower with unchallenged hegemony; seeking to discipline unruly states which resist its authority and/or deny free access to US capital. This interpretation is quite consistent with the invasion of Iraq (to ensure a secure access to Iraqi oil) and the bullying of Thailand over IPRs in the context of ‘free trade’ treaty negotiations. However, it is important to keep in mind the financial dimensions of US foreign policy. We have pointed out earlier that the continuing health of the US economy is dependent in part on borrowed dollars; dollars which are borrowed from the circulating pool of international dollars which is maintained because large trading corporations and countries choose to keep their trade surpluses in dollars. This pool of international dollars depends on the confidence of the rest of the world in the US dollar as a store of value. In January 2004 the IMF issued a report which was critical of US twin deficits, the budget deficit and the trade deficit. The budget deficit represents the US government spending more than it receives in revenue and therefore borrowing to do so. Money borrowed by the US government feeds the US economy through wages, contracts and purchases. While there is a huge pool of floating international dollars from which to borrow there is no interest rate risk associated with such massive federal borrowings. The trade deficit represents the US economy buying more from the outside world than it sells to the outside world. Any other country which bought more than they sold would need to sell their own currency to buy foreign currency in order to pay for the excess (the trade deficit). Because of the unique status of the US dollar there are no such disciplines limiting US trade. US traders can borrow from the international pool of dollars to pay for their deficit without any impact on the exchange rate (while the rest of the world’s traders are happy to keep their surplus in US dollars). From the point of view of the theory of post-Fordist (structural) overproduction the borrowing by the US government and by US traders feeds largely into consumption expenditure (the budget deficit feeds consumption expenditure directly; borrowing to support the trade deficit keeps the prices of imports relatively low). This is a key mechanism for deferring the crisis of over-production and given the size of the US economy it represents a major bulwark against the threat being realised. Given the size of the US market for other trading nations it is of critical importance that the US continue to borrow in order to buy. Two questions arise from this picture. Where is the money coming from? What would happen if the traders and trading nations lost confidence in the dollar as a store of value? The money which is being borrowed by the US government and by US traders from the international pool of dollars can be seen, at its simplest, as coming from the profits of traders based outside the US who are selling into the US market. Rather than re-investing their profits in the country of production they are lending them to the banks who are on lending them (in the scenario sketched above) to the US government and US traders. In this scenario the threat of over-production (relative to buying power) is managed by not investing in building additional productive capacity but by converting capital accumulated off-shore into debt powered consumption in the US. These are profits which have been generated through the labour and ingenuity of business people, farmers and workers in other countries including in many developing countries. In the latter case these are profits which are urgently needed in the countries of origin to create the industrial base and public sector infrastructure which may be understood as ‘economic development’. But if governments judge that reduced taxation is the higher priority and if investors judge that they will get a better return by buying shares in banks than by creating new productive capacity then the funds will be available for lending to the US to support continued consumption expenditure. It is a house of cards which depends on the confidence of traders around the world in the strength of the US economy. If these traders anticipated a fall in the value of the dollar and decided to keep more of their reserves in euros or yen and therefore sell off some of their dollars the value of the dollar would certainly fall. From this would flow several consequences. The price of US exports would fall and the cost of imports into the US would rise. This would lead to inflation in the US but would benefit US exporters. As foreign traders shift their surplus out of dollars there might appear to be limits to the pool of international dollars from which the US government and US traders are borrowing. In this case interest rates will rise globally as US borrowers compete with other borrowers from a shrinking pool of international dollars. Increasing interest rates will increase the cost of borrowing for everyone, for real investors, for takeovers and for consumption. Banks and other corporations which are over committed could collapse with consequences which are difficult to conceive. While the world is bemused by the rhetoric of efficiency and free trade poor people will continue to pay for overconsumption in the rich world and the global system will become more unstable. Samir Amin has pointed out that there are alternatives to the worship of efficiency and globalised productivity. Countries and regions could decide to prioritise families, communities, cultures and regions over efficiency and pay a slightly higher cost for these values. Countries and regions could decide to preserve local economies in which some of the elements of the Fordist balance are restored: people with jobs are able to buy the products of their labour. Next 2001-2004 CMH Report During the early 1990s World Bank lending for health projects far eclipsed funding made available through the WHO. As the premier giver of money for health system development the Bank was also becoming as the premier authority on health policy. WHO (under Brundtland) adopted the ‘if you can’t beat them join them’ adage and engaged the Bank in a number of partnerships and collaborations. In 2000 Brundtland (with support from the World Bank and Gates) commissioned a report on Macroeconomics and Health. The terms of reference given to the Commission were all about demonstrating how important population health is as an input to economic development. Presumably the theory was that the IMF might be persuaded to more health friendly policies if they understood that health contributes to economic development. (This further presumes that the IMF includes amongst its purposes economic development rather than simply debt repayment and economic integration.) Or perhaps that the ministers for finance of the rich countries might be persuaded to donate more money to the WHO and the various global funds it was sponsoring if they realised that health is an input to economic development. (Of course, in the light of the theory of post-Fordist structural over-production, the ministers of finance might have good reason for not encouraging the economic development of Third World countries.) In its June 2001 report the Commission (CMH) repeated the virtuous cycle theory from the World Bank’s 1993 report (health contributes to growth contributes to health). It also repeated the focus on specific interventions which had characterised the 1993 report although overlaid with a new jargon, that of ‘scaling up’. The Commission clearly recognised the criticisms of previous vertical programs and intervention-focused reports about the need for comprehensive health system development and presented a new concept, namely ‘close to client’ (or CTC) health system development. How the (presumably comprehensive) CTC model was to interface with the vertical implementation of the selected interventions was nowhere clarified. The Commission says nothing about why poor countries can’t afford to develop comprehensive health systems themselves. It says nothing about the transfer of value from the South to the North associated with repayment of debt, declining terms of trade and a trading regime with structured discrimination against poor countries. The Commission proposes that the funding for the ‘scaling up’ of the selected interventions will come from aid from the rich countries (and discounts from pharmaceutical corporations); ‘crumbs off the rich man’s table’ (Ravi Narayan). The Commission proposes that these funds will be managed through the Global Fund for AIDS, TB and Malaria and will be disbursed through a process based on the WB/IMF PRSP process. Why should the rich countries increase their official development assistance to the very ambitious levels foreshadowed by the CMH? The basic argument of the report is not about health and economic development; it is about health and social stability. In some very prescient passages the authors of the report warn the leaders of the G8 and the leaders of the global corporates that ‘globalisation is on trial’ and warns against violence and insurrection if the immiseration and alienation of millions of Third World peoples is not arrested. Three months later came the bombings of the World Trade Centre and the Pentagon in Washington. Disappointingly, rather than funding the Global Fund as recommended by the CMH, the US launched a War on Terrorism, starting with Afghanistan and Iraq but threatening to invade a long list of ‘rogue states’. It is now history that the US found the invasion of Iraq much more costly than they had first anticipated which appears to have curbed its pre-emptive unilateralism, at least in the short term. The CMH can be read at many levels. At the level of institutional politics there was clearly a degree of manoevering between WHO and the Bank with the Bank endorsing the technical leadership of WHO in return for the WHO endorsing the Bank’s economic pre-eminence. Among the individuals contributing to the work of the Commission there may have been some who were beguiled by the vision of disbursing billions of dollars to cure the world’s ills. However, against an analysis which problematises the legitimacy of the contemporary regime of economic governance the report of the CMH clearly follows precedent in denying (through silence) the role of the contemporary regime in the continued impoverishment and calling on self-interested charity as the principal pathway to succour for the poor. In this respect the report may be represented as the WHO lending its authority to legitimate (perhaps re-legitimate) the contemporary global regime of economic governance on behalf of the Bank and the Fund. Again the vertical interventionist approach and the promise that it offers of practicable improvements in health plays an important role in this legitimation strategy. Big pharma and access to drugs We leave the CMH at this point and return to the issue of access to drugs. We have already noted the defeat of big pharma in South Africa in April 2001 and the role of the TAC in South African and MSF and others leading a global social movement committed to ensuring access to anti-retrovirals for AIDS patients in poor countries. However, even as big pharma was buckling in Johannesburg, the Government of Norway was hosting (April 2001) a meeting which included WHO, UNICEF, the World Bank, the global pharmaceutical giants and a small group of NGOs to discuss strategies to deal with access by poor countries to expensive drugs generally. The meeting considered all options including compulsory licensing but adopted the more conservative pharma-friendly option of differential pricing. This position was to be expected from the World Bank but from the WHO it was disappointing; perhaps a warning to those who might have expected more. The conservatism of this position (differential pricing) was underlined seven months later when the WTO Ministerial Council meeting in November 2001 in Doha adopted the Doha Statement on TRIPS and Public Health. The principle underlying this statement was that public health should take priority over trade rules. The Statement affirmed the legitimacy of compulsory licensing and addressed also the barriers facing small countries who would not be able to use compulsory licensing to meet their own needs because they did not have a domestic generics industry. The Doha meeting commissioned a process which was to work out the detailed rules and arrangements under which poor countries could use compulsory licensing for domestic or export purposes (for small countries without their own generic industry). The US has fought a complex rearguard action against implementing these provisions and continues to do so. Nevertheless the writing was on the wall with regard to the WTO as a compliant vehicle for US economic policy and the alternative strategy of multiple bilateral and regional ‘free trade’ agreements was being implemented at the same time. In Oct 2002 Bristol Myers Squib was defeated in a long running case about the Thai Government’s right to manufacture DDI for local consumption. After a decade of continuing pressure on Thailand the USTR announced in 2000 that the US accepted Thailand’s right to produce DDI within the terms of its own intellectual property laws. However, in Oct 2003 negotiations between Thailand and the US towards a US Thai FTA commenced with compulsory licensing, data access and extended IPRs on the table. We have already noted how the Cancun meeting of the WTO ended in stalemate in November 2003 with a deadlock over agriculture and the so-called ‘Singapore issues’. Part of the significance of the Cancun meeting was that the the G21+China stood up to the G8 in demanding reform of agriculture. However, the stalemate at Cancun also led to a further turn by the US to rely more on bilateral and regional FTAs instead of the multilateral forum of WTO. Even here however, there are limits to US power and at a meeting in Miami in January 2004 to negotiate a free trade of the Americas agreement the US preferred model was defeated by Latin America (leading to so-called FTAA lite). US pre-emptive unilateralism and the need to maintain confidence in the US dollar The Iraqi resistance to the US-led invasion appears to have had a sobering impact on US pre-emptive unilateralism and (at the time of writing) further military adventures look slightly less likely. It may be useful to inquire more deeply into US pre-emptive unilateralism. At one level we can interpret it simply as the predictable behaviour of a superpower with unchallenged hegemony; seeking to discipline unruly states which resist its authority and/or deny free access to US capital. This interpretation is quite consistent with the invasion of Iraq (to ensure a secure access to Iraqi oil) and the bullying of Thailand over IPRs in the context of ‘free trade’ treaty negotiations. However, it is important to keep in mind the financial dimensions of US foreign policy. We have pointed out earlier that the continuing health of the US economy is dependent in part on borrowed dollars; dollars which are borrowed from the circulating pool of international dollars which is maintained because large trading corporations and countries choose to keep their trade surpluses in dollars. This pool of international dollars depends on the confidence of the rest of the world in the US dollar as a store of value. In January 2004 the IMF issued a report which was critical of US twin deficits, the budget deficit and the trade deficit. The budget deficit represents the US government spending more than it receives in revenue and therefore borrowing to do so. Money borrowed by the US government feeds the US economy through wages, contracts and purchases. While there is a huge pool of floating international dollars from which to borrow there is no interest rate risk associated with such massive federal borrowings. The trade deficit represents the US economy buying more from the outside world than it sells to the outside world. Any other country which bought more than they sold would need to sell their own currency to buy foreign currency in order to pay for the excess (the trade deficit). Because of the unique status of the US dollar there are no such disciplines limiting US trade. US traders can borrow from the international pool of dollars to pay for their deficit without any impact on the exchange rate (while the rest of the world’s traders are happy to keep their surplus in US dollars). From the point of view of the theory of post-Fordist (structural) overproduction the borrowing by the US government and by US traders feeds largely into consumption expenditure (the budget deficit feeds consumption expenditure directly; borrowing to support the trade deficit keeps the prices of imports relatively low). This is a key mechanism for deferring the crisis of over-production and given the size of the US economy it represents a major bulwark against the threat being realised. Given the size of the US market for other trading nations it is of critical importance that the US continue to borrow in order to buy. Two questions arise from this picture. Where is the money coming from? What would happen if the traders and trading nations lost confidence in the dollar as a store of value? The money which is being borrowed by the US government and by US traders from the international pool of dollars can be seen, at its simplest, as coming from the profits of traders based outside the US who are selling into the US market. Rather than re-investing their profits in the country of production they are lending them to the banks who are on lending them (in the scenario sketched above) to the US government and US traders. In this scenario the threat of over-production (relative to buying power) is managed by not investing in building additional productive capacity but by converting capital accumulated off-shore into debt powered consumption in the US. These are profits which have been generated through the labour and ingenuity of business people, farmers and workers in other countries including in many developing countries. In the latter case these are profits which are urgently needed in the countries of origin to create the industrial base and public sector infrastructure which may be understood as ‘economic development’. But if governments judge that reduced taxation is the higher priority and if investors judge that they will get a better return by buying shares in banks than by creating new productive capacity then the funds will be available for lending to the US to support continued consumption expenditure. It is a house of cards which depends on the confidence of traders around the world in the strength of the US economy. If these traders anticipated a fall in the value of the dollar and decided to keep more of their reserves in euros or yen and therefore sell off some of their dollars the value of the dollar would certainly fall. From this would flow several consequences. The price of US exports would fall and the cost of imports into the US would rise. This would lead to inflation in the US but would benefit US exporters. As foreign traders shift their surplus out of dollars there might appear to be limits to the pool of international dollars from which the US government and US traders are borrowing. In this case interest rates will rise globally as US borrowers compete with other borrowers from a shrinking pool of international dollars. Increasing interest rates will increase the cost of borrowing for everyone, for real investors, for takeovers and for consumption. Banks and other corporations which are over committed could collapse with consequences which are difficult to conceive. While the world is bemused by the rhetoric of efficiency and free trade poor people will continue to pay for overconsumption in the rich world and the global system will become more unstable. Samir Amin has pointed out that there are alternatives to the worship of efficiency and globalised productivity. Countries and regions could decide to prioritise families, communities, cultures and regions over efficiency and pay a slightly higher cost for these values. Countries and regions could decide to preserve local economies in which some of the elements of the Fordist balance are restored: people with jobs are able to buy the products of their labour. Next

    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 The most striking thing which emerges for me from the review and analysis that I have presented is that there have been some important successes and achievements in recent years and that these successes should be recognised and celebrated. One of the key victories of the late 1980s and early 1990s was the delegitimation of the IMF’s structural adjustment packages. This was achieved through a combination of campaigns, research and street protests. Structural adjustment had been sold by the IMF as repositioning indebted countries on a development trajectory so that they could pay their debts. In fact they became widely recognised as being primarily about forcing repayment of debt, regardless of the damage that was being done to community well-being (including health) and social infrastructure (including health services). Investing in Health (1993) was clearly a response to the criticisms within the health sector of the damage that structural adjustment was doing to health and health care. The Bank went to great trouble to create ‘packages’ of interventions based on dollar per DALY cost-effectiveness as part of projecting the view that health development was compatible with IMF-dictated structural adjustment. The subsequent invention of the PRSP with a more explicit focus on ‘poverty reduction’ was likewise an attempt to retrieve some of the public credibility which was lost because of the damage wrought by structural adjustment. Important victories have also been achieved through the various campaigns against the continuing exsanguination of developing countries through repayment (over and over again) of debt, much of which dates back to the 1970s. One of the leading campaigns here has been Jubilee 2000 which contributed to a broadly based understanding of the origins of much Third World debt and the damage which is done by forcing repayment, over and over again. The MAI-non! and related campaigns against the proposed MAI (from 1995-1998) led the OECD to terminate discussions of their proposal. The provisions of the draft MAI would have greatly limited the ability of national governments to control foreign investment. The MAI was defeated through argument, websites, grafitti and street protest. Other important victories include: TRIPS and access, both in South Africa and at Doha in the form of the statement on TRIPS and Public Health; Cancun 03: advancing the demand for agricultural reform and resisting the Singapore issues; Miami 04 – Latin American resistance to US ambitions for a Free Trade Agreement for the Americas; Iraqi resistance to US occupation (and the opposition to further US adventurism in the UN and G8). None of these victories could be represented as epochal determinations of history; they were all relatively small tactical victories. However, even small tactical victories show us that there are alternatives; that Another World is Possible! There is much we can learn from these small tactical victories. Some of these lessons include the importance of effective use of internet in the MAI and the TRIPS and access campaigns, the benefits of South-South solidarity in Cancun and Miami, and the benefits of South North solidarity in the Jubiliee2000 and fair trade campaigns. NextThe most striking thing which emerges for me from the review and analysis that I have presented is that there have been some important successes and achievements in recent years and that these successes should be recognised and celebrated. One of the key victories of the late 1980s and early 1990s was the delegitimation of the IMF’s structural adjustment packages. This was achieved through a combination of campaigns, research and street protests. Structural adjustment had been sold by the IMF as repositioning indebted countries on a development trajectory so that they could pay their debts. In fact they became widely recognised as being primarily about forcing repayment of debt, regardless of the damage that was being done to community well-being (including health) and social infrastructure (including health services). Investing in Health (1993) was clearly a response to the criticisms within the health sector of the damage that structural adjustment was doing to health and health care. The Bank went to great trouble to create ‘packages’ of interventions based on dollar per DALY cost-effectiveness as part of projecting the view that health development was compatible with IMF-dictated structural adjustment. The subsequent invention of the PRSP with a more explicit focus on ‘poverty reduction’ was likewise an attempt to retrieve some of the public credibility which was lost because of the damage wrought by structural adjustment. Important victories have also been achieved through the various campaigns against the continuing exsanguination of developing countries through repayment (over and over again) of debt, much of which dates back to the 1970s. One of the leading campaigns here has been Jubilee 2000 which contributed to a broadly based understanding of the origins of much Third World debt and the damage which is done by forcing repayment, over and over again. The MAI-non! and related campaigns against the proposed MAI (from 1995-1998) led the OECD to terminate discussions of their proposal. The provisions of the draft MAI would have greatly limited the ability of national governments to control foreign investment. The MAI was defeated through argument, websites, grafitti and street protest. Other important victories include: TRIPS and access, both in South Africa and at Doha in the form of the statement on TRIPS and Public Health; Cancun 03: advancing the demand for agricultural reform and resisting the Singapore issues; Miami 04 – Latin American resistance to US ambitions for a Free Trade Agreement for the Americas; Iraqi resistance to US occupation (and the opposition to further US adventurism in the UN and G8). None of these victories could be represented as epochal determinations of history; they were all relatively small tactical victories. However, even small tactical victories show us that there are alternatives; that Another World is Possible! There is much we can learn from these small tactical victories. Some of these lessons include the importance of effective use of internet in the MAI and the TRIPS and access campaigns, the benefits of South-South solidarity in Cancun and Miami, and the benefits of South North solidarity in the Jubiliee2000 and fair trade campaigns. Next

    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 Where nutrition has been measured it has been shown that structural adjustment is associated with increased levels of under-nutrition. This provides a relatively straightforward ‘bridging issue’ from economics to health. Likewise the impact of TRIPS on access to drugs for AIDS is relatively straightforward and has introduced many activists to the workings of the WTO. Similarly the role of GATS in creating new barriers to building comprehensive primary health care systems provides a clear bridge between the economic sphere and the objectives of health development. Trade generally has been given less attention as a determinant of economic and population health. There is scope for working more closely with the fair trade movement and in particular arguing for the wider use of the provisions for special and differential treatment of developing countries as a way of accelerating economic development (and health development). However, in terms of sheer burden of disease the Agreement on Agriculture (AoA) is probably the single most health-damaging instrument in the whole complex governance structure. Hundreds of millions of small farmers are being driven off their lands through the swamping of gobal markets by industrialised agriculture (heavily subsidised in the case of Europe, Japan and the US). Only a small proportion of these small farmers will find jobs in the cities. The health consequences associated with this loss of livelihood are complex but huge, ranging from under-nutrition, to drug use and violence, AIDS and TB. PHM needs to build alliances with networks which are more focused in this area including with farmers’ organisations and movements. We need to find ways of reducing the complexity to its core elements and reducing the change project to clear practical strategies and campaigns. One continuing avenue for engagement will be the need to challenge glossy policy reports (such as the 2001 CMH) which deny (by obscuring) the need for alternative economic governance regimes to create the conditions for better health. The silence of CMH on the structural barriers to health development and its projection of charity as the appropriate solution provide good opportunities for conscientisation. Another continuing avenue for engagement will be the on-going debates over vertical programming (including ‘global funds’ and the new interventionism) versus health system capacity-building and comprehensive PHC. There are real questions about models for health system development which need to be worked through. However, much of the argument for vertical programming and ‘scaled-up interventions’ is about projecting the possibility that Third World health can be improved, for a relatively modest sum, without changing the economic dynamics of alienation and expropriation. Health activists need new ways of projecting the disease burden of poverty, despair, violence, displacement and conflict and of the underlying economic relations and structures of economic governance. It is misleading to represent the disease burden of Third World countries simply in terms of AIDS, TB and malaria without acknowledging the economic context including theft of livelihood (WTO) and structured extortion (IMF). NextWhere nutrition has been measured it has been shown that structural adjustment is associated with increased levels of under-nutrition. This provides a relatively straightforward ‘bridging issue’ from economics to health. Likewise the impact of TRIPS on access to drugs for AIDS is relatively straightforward and has introduced many activists to the workings of the WTO. Similarly the role of GATS in creating new barriers to building comprehensive primary health care systems provides a clear bridge between the economic sphere and the objectives of health development. Trade generally has been given less attention as a determinant of economic and population health. There is scope for working more closely with the fair trade movement and in particular arguing for the wider use of the provisions for special and differential treatment of developing countries as a way of accelerating economic development (and health development). However, in terms of sheer burden of disease the Agreement on Agriculture (AoA) is probably the single most health-damaging instrument in the whole complex governance structure. Hundreds of millions of small farmers are being driven off their lands through the swamping of gobal markets by industrialised agriculture (heavily subsidised in the case of Europe, Japan and the US). Only a small proportion of these small farmers will find jobs in the cities. The health consequences associated with this loss of livelihood are complex but huge, ranging from under-nutrition, to drug use and violence, AIDS and TB. PHM needs to build alliances with networks which are more focused in this area including with farmers’ organisations and movements. We need to find ways of reducing the complexity to its core elements and reducing the change project to clear practical strategies and campaigns. One continuing avenue for engagement will be the need to challenge glossy policy reports (such as the 2001 CMH) which deny (by obscuring) the need for alternative economic governance regimes to create the conditions for better health. The silence of CMH on the structural barriers to health development and its projection of charity as the appropriate solution provide good opportunities for conscientisation. Another continuing avenue for engagement will be the on-going debates over vertical programming (including ‘global funds’ and the new interventionism) versus health system capacity-building and comprehensive PHC. There are real questions about models for health system development which need to be worked through. However, much of the argument for vertical programming and ‘scaled-up interventions’ is about projecting the possibility that Third World health can be improved, for a relatively modest sum, without changing the economic dynamics of alienation and expropriation. Health activists need new ways of projecting the disease burden of poverty, despair, violence, displacement and conflict and of the underlying economic relations and structures of economic governance. It is misleading to represent the disease burden of Third World countries simply in terms of AIDS, TB and malaria without acknowledging the economic context including theft of livelihood (WTO) and structured extortion (IMF). Next

    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 In summary: Another world is possible! In this paper 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 and for the Peoples’ Health Movement in particular Two of the conclusions in particular are worth repeating: recognise, celebrate and learn from the successes of the social and popular movements keep global economic injustice at the centre of health needs and health policy discussion In summary: Another world is possible! In this paper 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 and for the Peoples’ Health Movement in particular Two of the conclusions in particular are worth repeating: recognise, celebrate and learn from the successes of the social and popular movements keep global economic injustice at the centre of health needs and health policy discussion

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