Redistribution, regulation and rights: The Final Report of the Globalization Knowledge Network, WHO Commission on Social Determinants of Health

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1 Redistribution, regulation and rights: The Final Report of the Globalization Knowledge Network, WHO Commission on Social Determinants of Health Ronald Labonté Canada Research Chair Globalization/Health Equity University of Ottawa Institute of Population Health

2 Knowledge Network Themes Health systems Evidence & Measurement Women/ gender Health Equity Priority Public Health Diseases Early Child Development Globalization Urban Settings Employment conditions Social Exclusion

3 Globalization KN: Focus on the global marketplace

4 Globalization and the SDH SOCIAL AND POLITICAL CONTEXT SOCIAL STRATIFICATION DIFFERENTIAL EXPOSURE DIFFERENTIAL VULNERABILITY DIFFERENTIAL CONSEQUENCES HEALTH OUTCOMES: ILLNESS HEALTH DISPARITIES HEALTH SYSTEM CHARACTER- ISTICS GLOBALIZATION Source: Modified from Diderichsen, Evans & Whitehead, 2001

5 Background Summary Economic benefits have been asymmetrical; globalization s enlarged and deepened markets reward countries that already have productive assets (financial, land, physical, institutional and human capital).

6 Background Summary Economic benefits have been asymmetrical; globalization s enlarged and deepened markets reward countries that already have productive assets (financial, land, physical, institutional and human capital). Global market integration reduced income inequalities between the world s individuals but within and betweencountry income inequalities have risen sharply.

7 Background Summary Economic benefits have been asymmetrical; globalization s enlarged and deepened markets reward countries that already have productive assets (financial, land, physical, institutional and human capital). Global market integration reduced income inequalities between the world s individuals but within and betweencountry income inequalities have risen sharply. Economic growth, in itself, will not improve equity in population health, at least in any acceptable time.

8 Background Summary Economic benefits have been asymmetrical; globalization s enlarged and deepened markets reward countries that already have productive assets (financial, land, physical, institutional and human capital). Global market integration reduced income inequalities between the world s individuals but within and betweencountry income inequalities have risen sharply. Economic growth, in itself, will not improve equity in population health, at least in any acceptable time. Interventions to shift these trends around will need to be based on an ethic of rights, regulation and redistribution.

9 Background Summary Economic benefits have been asymmetrical; globalization s enlarged and deepened markets reward countries that already have productive assets (financial, land, physical, institutional and human capital). Global market integration reduced income inequalities between the world s individuals but within and betweencountry income inequalities have risen sharply. Economic growth, in itself, will not improve equity in population health, at least in any acceptable time. Interventions to shift these trends around will need to be based on an ethic of rights, regulation and redistribution. There is no empirical consensus to the dominant economic story that increased global market integration through trade and financial liberalization improves growth or reduces poverty.

10 The rising tide? Poverty at $1 day down by (perhaps) 414 million since 1981; but most reduction prior to global market integration Poverty at $2 day up by 285 million Excluding China, poverty at $1 day up by 30 million, and at $2 day up by 567 million Ethical poverty line ($3 - $4/day) > 3 billion

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12 1. Globalization policies have reversed trends in health gains except for health technology benefits Worldwide life expectancy at birth (LEB) continued to increase over 1980s 2000s period of rapid global market integration but

13 1. Globalization policies have reversed trends in health gains except for health technology benefits Worldwide life expectancy at birth (LEB) continued to increase over 1980s 2000s period of rapid global market integration but Policy-driven aspects of globalization have slowed trends in health gains and may have reduced worldwide potential LEB gains worldwide by 1.53 years since 1980 (relative to counterfactual continuation of trends), due primarily to increases in income inequalities, economic instability, slower improvements in the provision of health services and stagnation in vaccination coverage and

14 1. Globalization policies have reversed trends in health gains except for health technology benefits Worldwide life expectancy at birth (LEB) continued to increase over 1980s 2000s period of rapid global market integration but Policy-driven aspects of globalization have slowed trends in health gains and may have reduced worldwide potential LEB gains worldwide by 1.53 years since 1980 (relative to counterfactual continuation of trends), due primarily to increases in income inequalities, economic instability, slower improvements in the provision of health services and stagnation in vaccination coverage and By 0.13 years even when accounting for gains through improved health technologies

15 Regional Losses The transition economies (-1.42 LEB years) and the USSR (-3.57 LEB years) where the LEB loss due to recession, rising inequality and volatility was compounded by the lack of access to improvements afforded by health technology

16 Regional Losses The transition economies (-1.42 LEB years) and the USSR (-3.57 LEB years) where the LEB loss due to recession, rising inequality and volatility was compounded by the lack of access to improvements afforded by health technology China (-0.59 LEB years) where health technology and economic growth gains were insufficient to offset globalization policy-related losses due to a rise in income inequality and volatility, and deteriorations in access to health care and female education

17 Regional Losses The transition economies (-1.42 LEB years) and the USSR (-3.57 LEB years) where the LEB loss due to recession, rising inequality and volatility was compounded by the lack of access to improvements afforded by health technology China (-0.59 LEB years) where health technology and economic growth gains were insufficient to offset globalization policy-related losses due to a rise in income inequality and volatility, and deteriorations in access to health care and female education SSA (-8.95 LEB) where slow or negative GDP growth, rising HIV-AIDS incidence, declines in immunization coverage overwhelmed substantial gains in health technology.

18 2. Globalization increases inequalities between skilled/unskilled workers within and across national borders Globalization increases pressures for labour market flexibility, with negative effects on economic security for many workers. Labour s share of global income/wealth (relative to capital s share) in OECD countries has declined with globalization, a disincentive to further global market integration. Since 1975: Wages as share of global GDP fell from 63% to 58% Corporate share of global GDP rose from 11% to 16% Top 1% earner share of wages rose from 8% to 16%

19 2. Globalization increases inequalities between skilled/unskilled workers within and across national borders Women occupy lower paid, less desirable jobs while bearing disproportionate share of responsibility for unpaid work in the household.

20 2. Globalization increases inequalities between skilled/unskilled workers within and across national borders Women occupy lower paid, less desirable jobs while bearing disproportionate share of responsibility for unpaid work in the household. Increased women s employment in export-processing zones has contributed to gender empowerment, but exploitative conditions, unsafe conditions and lack of labour rights compromise potential health gains.

21 At least 25,000 textile workers defied a ban on protests in emergency-ruled Bangladesh on Saturday to demand back-pay and bonuses in one of the country's biggest industrial zones Textile workers in Bangladesh get paid as little as five pence an hour to make cheap clothes for UK companies Tesco, Asda and Primark, a report says.

22 3. Trade liberalization may be health beneficial through effects on economic growth, but requires flanking policies

23 3. Trade liberalization may be health beneficial through effects on economic growth, but requires flanking policies Careful sequencing of liberalization commitments together with expanded, universal and progressively financed social protection policies (particular emphasis on universal childcare to increase women s economic participation) can prevent some of liberalization s health-negative consequences associated with increased insecurity.

24 3. Trade liberalization may be health beneficial through effects on economic growth, but requires flanking policies Careful sequencing of liberalization commitments together with expanded, universal and progressively financed social protection policies (particular emphasis on universal childcare to increase women s economic participation) can prevent some of liberalization s health-negative consequences associated with increased insecurity. Governments should have experience regulating trade in health and other SDH sectors in equity-promoting ways before making binding commitments in trade treaties.

25 3. Trade liberalization may be health beneficial through effects on economic growth, but requires flanking policies Careful sequencing of liberalization commitments together with expanded, universal and progressively financed social protection policies (particular emphasis on universal childcare to increase women s economic participation) can prevent some of liberalization s health-negative consequences associated with increased insecurity. Governments should have experience regulating trade in health and other SDH sectors in equity-promoting ways before making binding commitments in trade treaties. Increase health presence in trade negotiations.

26 3. Trade liberalization may be health beneficial through effects on economic growth, but requires flanking policies High- and middle-income countries should not demand further tariff reductions in bilateral, regional and world trade agreement negotiations with low-income countries until alternative methods of revenue collection, and the institutional capacity to sustain them, are well developed.

27 3. Trade liberalization may be health beneficial through effects on economic growth, but requires flanking policies High- and middle-income countries should not demand further tariff reductions in bilateral, regional and world trade agreement negotiations with low-income countries until alternative methods of revenue collection, and the institutional capacity to sustain them, are well developed. Incorporate oversight of trade disputes by human rights and development experts to determine if non-compliance is essential to meet human rights obligations or MDG targets; increase role of WHO in trade issues affecting health.

28 Estimates of benefits/costs: So-called Doha Development Round Projected to 2015: Benefits: US$79.9 billion to developed (high-income) countries US$16.1 billion to the rest, a figure that amounts to about a penny a day for people in developing countries Costs: NAMA tariffs losses under high-income country proposals US$38 billion for developed nations US$63.4 billion for developing ones

29 4. Financial flows are important to finance the SDH but for many LDCs are insufficient Global financial flows affect the social determinants of health, notably through portfolio investments, foreign direct investments, capital flight and remittances.

30 4. Financial flows are important to finance the SDH but for many LDCs are insufficient Global financial flows affect the social determinants of health, notably through portfolio investments, foreign direct investments, capital flight and remittances. However, the poorest countries of the world, notably in SSA, receive only small portions of these flows and rely heavily on official development assistance (aid) to finance their health and SDH investments.

31 4. Financial flows are important to finance the SDH but for many LDCs are insufficient Global financial flows affect the social determinants of health, notably through portfolio investments, foreign direct investments, capital flight and remittances. However, the poorest countries of the world, notably in SSA, receive only small portions of these flows and rely heavily on official development assistance (aid) to finance their health and SDH investments. Aid is effective in improving health and development (though there is some dissenting opinion and evidence); it remains short-term, unpredictable and inadequate; too often tied or committed to projects rather than general budget support; disbursed less by need than by donor interest; and deducted when debt servicing is cancelled.

32 5. Aid effectiveness for health equity requires aid reform The proliferation of special global health initiatives creates problems in aid predictability and recipient country management, and an internal brain drain from core public health to diseasebased global health initiatives.

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34 5. Aid effectiveness for health equity requires aid reform The proliferation of special global health initiatives creates problems in aid predictability and recipient country management, and an internal brain drain from core public health to diseasebased global health initiatives. In the longer-term, aid coordination and alignment could best be met through globally pooled funds with multi-year stability of donor inputs and recipient receipts: a global approach to SWAPs

35 5. Aid effectiveness for health equity requires aid reform The proliferation of special global health initiatives creates problems in aid predictability and recipient country management, and an internal brain drain from core public health to diseasebased global health initiatives. In the longer-term, aid coordination and alignment could best be met through globally pooled funds with multi-year stability of donor inputs and recipient receipts. In the shorter-term are requirements for increased and sustained levels of untied aid, with increasing amounts disbursed through direct budget support.

36 Development Assistance as % of Gross National Income FY 2003 Anglo-American Source: OECD/DAC Annual Report 2004 Norway Denmark Luxembourg Netherlands Sweden Belgium France Ireland UK Australia Canada New Zealand US

37 How modest? Added annual cost to reach 0.7% target, Big Macs/capita 80 Canada France Germany Italy Japan U.K. U.S. Source: OECD, 2005, Table 4.1; World Bank 2004; Big Mac index from McCurrencies, The Economist, 24 April 2003.

38 5. Aid effectiveness for health equity requires aid reform The proliferation of special global health initiatives creates problems in aid predictability and recipient country management, and an internal brain drain from core public health to diseasebased global health initiatives. In the longer-term, aid coordination and alignment could best be met through globally pooled funds with multi-year stability of donor inputs and recipient receipts. In the shorter-term are requirements for increased and sustained levels of untied aid, with increasing amounts disbursed through direct budget support. Reframe aid: from intermittent charity to normative, legal, political, ethical and pragmatic obligations.

39 Normative: Agreement on MDGs, three directly health related, all indirectly health related, commitment that no country should fail to meet them due to lack of financial resources

40 Normative: Agreement on MDGs, three directly health related, all indirectly health related, commitment that no country should fail to meet them due to lack of financial resources Legal: Human rights treaties (ICESCR) actually obligate wealthier nations to do this

41 Political: federated states, European Union transfers from wealthier/more populous to poorer/less populous for purposes of improving equity in peoples access to essential services/resources ( capabilities )

42 Political: federated states, European Union transfers from wealthier/more populous to poorer/less populous for purposes of improving equity in peoples access to essential services/resources ( capabilities ) Ethical: Pogge s argument of relational justice evidence that global institutional arrangements are disproportionately benefiting some and contributing to poverty of others; those benefiting from/upholding these institutions are duty bound to rectify their inequities

43 Political: federated states, European Union transfers from wealthier/more populous to poorer/less populous for purposes of improving equity in peoples access to essential services/resources ( capabilities ) Ethical: Pogge s argument of relational justice evidence that global institutional arrangements are disproportionately benefiting some and contributing to poverty of others; those benefiting from/upholding these institutions are duty bound to rectify their inequities Pragmatic: Many SSA countries will rely on aid transfers for basic health for years to come

44 6. Debt cancellation provides modest benefit and continues to have too many attached conditions Debt forgiveness/cancellation has enabled some heavily indebted poor countries to increase spending in the SDH (notably education).

45 Was debt a deliberate strategy? Debt: an ingenious substitute for the chain and whip of the slave-driver (The Devil s s Dictionary 1911) My real job was giving loans to other countries huge loans, much bigger than they could possibly repay [and that would be used to employ] a US company to build services [for] a minority of the wealthiest So we make this big loan most of which comes back to the United States, the country is left with the debt plus lots of interest, and they basically become our servants, our slaves. It s s an empire we ve built this way, a huge empire. Interview with John Perkins, author Confessions of an Economic Hit Man (Berret & Koehler, 2005), in CCPA Monitor June 2005.

46 6. Debt cancellation provides modest benefit and continues to have too many attached conditions Debt forgiveness/cancellation has enabled some heavily indebted poor countries to increase spending in the SDH (notably education). As with ODA, the amounts have been inadequate relative to MDG spending requirements, with the value of debt service relief usually deducted from eligibility for new grants or concessional loans.

47 6. Debt cancellation provides modest benefit and continues to have too many attached conditions Debt forgiveness/cancellation has enabled some heavily indebted poor countries to increase spending in the SDH (notably education). As with ODA, the amounts have been inadequate relative to MDG spending requirements, with the value of debt service relief usually deducted from eligibility for new grants or concessional loans. Debt relief conditionalities often include many of the same requirements for liberalization and global market integration as those in earlier structural adjustment programs, the health equity effects of which in many low-income countries (notably in SSA) were negative.

48 6. Debt cancellation provides modest benefit and continues to have too many attached conditions Debt forgiveness/cancellation has enabled some heavily indebted poor countries to increase spending in the SDH (notably education). As with ODA, the amounts have been inadequate relative to MDG spending requirements, with the value of debt service relief usually deducted from eligibility for new grants or concessional loans. Debt relief conditionalities often include many of the same requirements for liberalization and global market integration as those in earlier structural adjustment programs, the health equity effects of which in many low-income countries (notably in SSA) were negative. Attention needs to be given to outright cancellation of odious debts, and to calculating sustainable debt using a minimum ethical poverty line ($3 - $4/day, allowing average LEB of years).

49 One recent study estimates that $726 billion of the current debt of 13 developing countries is odious Loans knowingly made to corrupt officials, for work of no net benefit, for purposes of military repression or without the consent of the eventual debtors and should be cancelled and, further, that 10 countries should actually receive refunds of $383 billion in past payments on such debts.

50 7. Globalization contributes to the asymmetrical migration of health professionals from poor to rich countries Mitigating polices to reduce push/pull include: return migration (minimal impact/high cost);

51 7. Globalization contributes to the asymmetrical migration of health professionals from poor to rich countries Mitigating polices to reduce push/pull include: return migration (minimal impact/high cost); restrict emigration/bonding (minimal impact) or immigration (moderate impact but unpopular);

52 7. Globalization contributes to the asymmetrical migration of health professionals from poor to rich countries Mitigating polices to reduce push/pull include: return migration (minimal impact/high cost); restrict emigration/bonding (minimal impact) or immigration (moderate impact but unpopular); bi- or multilateral agreements (moderate impact but limited in scope);

53 7. Globalization contributes to the asymmetrical migration of health professionals from poor to rich countries Mitigating polices to reduce push/pull include: return migration (minimal impact/high cost); restrict emigration/bonding (minimal impact) or immigration (moderate impact but unpopular); bi- or multilateral agreements (moderate impact but limited in scope); improved domestic HHR self-sufficiency (widely endorsed but not followed);

54 7. Globalization contributes to the asymmetrical migration of health professionals from poor to rich countries Mitigating polices to reduce push/pull include: return migration (minimal impact/high cost); restrict emigration/bonding (minimal impact) or immigration (moderate impact but unpopular); bi- or multilateral agreements (moderate impact but limited in scope); improved domestic HHR self-sufficiency (widely endorsed but not followed); restitution (equitable but not popular with countries accepting HHR émigrés);

55 7. Globalization contributes to the asymmetrical migration of health professionals from poor to rich countries Mitigating polices to reduce push/pull include: return migration (minimal impact/high cost); restrict emigration/bonding (minimal impact) or immigration (moderate impact but unpopular); bi- or multilateral agreements (moderate impact but limited in scope); improved domestic HHR self-sufficiency (widely endorsed but not followed); restitution (equitable but not popular with countries accepting HHR émigrés); bilateral tax transfers from émigrés to home country (potentially most equitable and easiest to administer).

56 8. Globalization has weakened public health system capacities, particularly in LMICs Neoliberal HSR has not fulfilled promise of greater efficiency but has generated greater inequity in access and more fragmented public, private, and PPP systems.

57 8. Globalization has weakened public health system capacities, particularly in LMICs Neoliberal HSR has not fulfilled promise of greater efficiency but has generated greater inequity in access and more fragmented public, private, and PPP systems. High-income countries: First do no harm Cease locking in commercialization of health services in trade treaties Cease promoting through World Bank private financing of health care (recently announced $1 billion program to finance private entrepreneurial health care in LICs)

58 8. Globalization has weakened public health system capacities, particularly in LMICs Neoliberal HSR has not fulfilled promise of greater efficiency but has generated greater inequity in access and more fragmented public, private, and PPP systems. High-income countries: First do no harm Cease locking in commercialization of health services in trade treaties Cease promoting through World Bank private financing of health care (recently announced $1 billion program to finance private entrepreneurial health care in LICs) Low-/middle-income countries Increase portion of public spending to health and other essential health services (e.g. African countries, 15% of public revenue, Abuja accord)

59 9. Improving Global Governance Increase core (regular budget) funding of WHO and other UN agencies with health determinant mandates

60 9. Improving Global Governance Increase core (regular budget) funding of WHO and other UN agencies with health determinant mandates Establish the United Nation s ECOSOC with WHO as lead institutions for coordination of multilateral actions on health determinants

61 9. Improving Global Governance Increase core (regular budget) funding of WHO and other UN agencies with health determinant mandates Establish the United Nation s ECOSOC with WHO as lead institutions for coordination of multilateral actions on health determinants Democratize international institutions by increasing the representation of developing countries, improving their transparency and increasing their openness to civil society organizations

62 9. Improving Global Governance Create a permanent position of UN Special Rapporteur on the Right to Health Evidence of a norm cascade

63 9. Improving Global Governance Create a permanent position of UN Special Rapporteur on the Right to Health Evidence of a norm cascade The post-war system of global governance needs to be reexamined and re-developed in light of post-millennial global conditions

64 Redistribution, regulation and rights [Global] policies [adopted by nations] should provide for: systematic resource redistribution between countries and within regions and countries to enable poorer countries to meet human needs, effective supranational regulation to ensure that there is a social purpose in the global economy, and enforceable social rights that enable citizens and residents to seek legal redress (Deacon et al., 2005)

65 Redistribution, regulation and rights Nancy Birdsall (Center for Global Development) argues for a new global social contract in which high income country transfers for global education, health, social protection and public goods allow all countries to reach the 20 percent of GDP high income countries presently spend domestically for such purposes. It is a relevant comparison to the extent we now have a more and more integrated global economy, creating legitimate new demands for more shared prosperity (Birdsall, 2006).

66 Redistribution, regulation and rights Globalization's future bright: Increased role of China, India, Brazil and other developing countries in global economy Productivity gains from global production chains Diffusion of new technologies Globalization s future bleak: Growing inequality Threats to environmental commons Widening wage inequalities Subsequent social unrest World Bank Global Economic Prospects 2007

67 Towards Health-Equitable Globalization: Rights, Regulation and Redistribution Final Report of the Globalization Knowledge Network gkn_report_06_2007.pdf

68 / All papers developed by the Globalization Knowledge Network will be posted over the next several months