The World Bank: Turning Health into an Investment
The World Bank
Fifty years ago in the village of Bretton Woods, New Hampshire, representatives of 44 nations convened to discuss the international monetary and financial system. What emerged from that meeting was the birth of two new global bureaucracies: the World Bank and the International Monetary Fund (IMF). The purpose of these new institutions was to fix international exchange rates and to provide stability and structure to the international monetary order in the hopes of avoiding a repetition of the economic chaos and disaster of the 1920s and 1930s.
The IMF was given the power to adjust exchange rates to reflect the changing value of different currencies. The International Bank for Reconstruction and Development (the full name of the World Bank) was supposed to finance projects for reconstruction after World War II and to assist in the development of underdeveloped regions. And indeed they did, although most of what they funded were grandiose projects that put more wealth into the hands of the wealthy, while often displacing thousands of poor people from their homes.
Structural Adjustment Programs
By the early 1980s, many poor countries were seriously in debt, and were having difficulty paying even the interest on their loans. As the people at the banks in the wealthier countries realized that they were not going to be repaid on many of the irresponsible loans they had made, they began to refuse to lend additional money, causing many poor countries great economic hardship. As it became clear that some of these countries were going to default on their loans, as Mexico did in 1982, the World Bank and the IMF came to the rescue—of the banks!
The World Bank and the IMF loaned money to struggling countries with strings attached that tied them in knots. As a condition of accepting these new loans, governments had to agree to accept structural adjustment programs (SAPs) as well. The Bank claimed that the SAPs would improve the economic climate in the countries in which they were imposed by reducing the governments expenditures.
Briefly, the SAPs usually include the following components:
cutbacks in public spending (usually on health and education)
privatization of government enterprises
freezing of wages and freeing of prices
increasing taxation (of the poor and middle class)
increasing production for export rather than for local consumption
reducing tariffs and regulations and creating incentives to attract foreign
capital and trade (often resulting in dangerous environmental hazards)
reducing government deficits by charging user fees for social services,
For a long time, the administrators at the World Bank denied that structural adjustment hurt the poor, but more recently it says that such austerity measures (starving children?) are necessary to restore economic growth. They assert that as countries get richer, eventually some benefits will trickle down to the poor. But overwhelming evidence shows that structural adjustment, linked with other conservative trends, have caused major set-backs in the health of poor families. While the Bank shows graphs that have been stripped of their fine detail in order to show that overall health statistics are better now than they were thirty years ago, upon close inspection of the data it is clear that in many countries improvements in health have slowed down or stopped since the 1980s, and even more so in the 1990s.
These structural adjustment programs were tantamount to making the poor pay for the irresponsible lending by the rich banks in Northern countries to the rich elites in the South. Not surprisingly, they have had devastating effects on the health of poor people in the countries to which they have been applied.
The widening gap between rich and poor has been exacerbated by Third World governments' attempts to comply with the World Bank’s policies. Despite development aid from a number of Northern countries, in the 1990s more than $60 billion net flows from the poor countries to the rich each year. Meanwhile, nearly 25% of the world’s people lack adequate food (even though ample food supplies exists) and the gap between rich and poor has grown 30% in the last ten years.
Investing in Health
The World Bank’s 1993 World Development Report is entitled Investing in Health. On first reading, the Bank’s strategy for improving health status worldwide sounds comprehensive, even modestly progressive. It acknowledges the economic roots of ill health, and states that improvements in health are likely to result primarily from advances in non-health sectors. It calls for increased family income, better education (especially for girls), greater access to health care, and a focus on basic health services rather than tertiary and specialist care. It quite rightly criticizes the persistent inequity and inefficiency of current Third World health systems. Ironically, in view of its track record of slashing health budgets, it even calls for increased health spending. Furthermore, it echoes the Alma Ata call for community participation, self-reliance, and health in the people’s hands. . . So far so good.
But on reading further, we discover that under the guise of promoting an equitable, costeffec-tive, decentralized, and country-appropriate health system, the World Bank’s key recommendations spring from the same sort of structural adjustment paradigm that has worsened poverty and further jeopardized the health of the world’s neediest people.
In the report, the Bank introduces a new unit of measure called the Disability Adjusted Life Year (DALY), a method for calculating which maladies governments should allocate funds for, based on a person’s ability to contribute to the country’s productivity (GNP). Here’s how it works. Each disease is given a value, an approximation of how many years of healthy productive life that a person is likely to lose if they are stricken with a particular disease at a given age. This is weighed against how much it costs to prevent or treat that disease. For example, vitamin A supplementation in areas with a high risk of blindness is cost effective because it costs less than $1 per DALY, whereas treating children with leukemia is much less cost effective at $10,000 per DALY.
Because of the way DALYs factor age, children and the elderly have lower value than young adults, and presumably disabled persons who are unable to work are awarded zero value and therefore have little or no entitlement to health services at public expense. (The very term Disability Adjusted Life Years is an affront to disabled persons.The DALY prioritization method which authoritatively deprecates disability has the stench of eugenics. Disabled activists need to join with health rights activists to protest this potentially neo-fascist policy.)
The Bank says that using the DALY “avoids assigning a dollar value to human life,” but nothing could be further from the truth. The Bank takes a dehumanizingly mechanistic marketplace view of both health and health care. When stripped of its humanitarian rhetoric, its chilling thesis is that the purpose of keeping people healthy is to promote economic growth. Were this growth to serve the well-being of all, the Bank’s intrusion into health care might be more palatable. But the “economic growth” which the Bank inflexibly promotes as the goal and measure of “development” has invariably benefitted large multinational corporations, often at great human and environmental cost.
The World Bank tries to convince us that it has turned over a new leaf: that it now recognizes that sustainable development must take direct measures to eliminate poverty. Yet the Bank has so consistently financed projects and policies which worsen the situation of disadvantaged people that we must question its ability to change its course. A growing number of critics suggest that perhaps the most effective step the World Bank could take to eliminate poverty would be to eliminate itself.
According to the Bank’s prescription, in order to save “millions of lives and billions of dollars” governments must adopt “a three pronged policy approach of health reform:
Foster an enabling environment for households to improve health.
Improve government spending in health.
Promote diversity and competition in the promotion of health services.”
These recommendations are said to reflect new thinking. But stripped of their Good Samaritan face lift, and reading the Report’s fine print, we can restate these three prongs more revealingly:
“Foster an enabling environment for households to improve health” means requiring disadvantaged families to cover the costs of their own health care . . . in other words, fee for service and cost recovery through user financing: putting the burden of health costs back on the shoulders of the poor.
“Improve government spending in health” means trimming government spending by reducing services from comprehensive coverage to a narrowly selective, cost-effective approach . . . in other words, a new brand of Selective Primary Health Care.
“Promote diversity and competition” means turning over to private, profit-making doctors and businesses most of those government services that used to provide free or subsidized care to the poor . . . in other words, privatization of most medical and health services: thus pricing many medical interventions beyond the reach of those in greatest need.
In essence, the Bank’s strategy is a market-friendly version of Selective (rather than Comprehensive) Primary Health Care, which includes privatization of medical services and user-financed cost recovery. One reviewer (David Legge) observes that the World Bank Report is “primarily oriented around the technical fix rather than any focus on structural causes of poor health; it is about healthier poverty.”
The commercial medical establishment and some large non-government organizations have celebrated the World Bank’s Investment in Health strategy as a ‘major breakthrough’ toward universal, more cost-efficient health care. But most health rights activists see the report as a master-piece of disinformation, with dangerous implications. They fear that the Bank will impose its recommendations on those poor countries that can least afford to implement them. What makes the new health strategy especially dangerous is that the Bank, with its enormous money-lending capacity, can force poor countries to accept its blueprint by tying it to loans as it has done with structural adjustment.
A Call for Organized Protest of the World Bank’s Intrusion into Health Policy Making
Despite all its rhetoric about alleviation of poverty, strengthening of households, and more equitable and efficient health care, the central function of the World Bank remains the same: to draw the rulers and governments of weaker states into a global economy dominated by large, multinational corporations. Its loan programs, development priorities, and adjustment policies have deepened inequalities and contributed to the perpetuation of poverty, ill health, and deteriorating living conditions for at least one billion human beings.
In various parts of the world, concerned groups are attempting to engender a broad-based protest of the pernicious policies of the World Bank and IMF. Health Action International has put together a packet of writings from a wide variety of sources, criticizing the 1993 World Development Report and alerting health activists to oppose it. Covering a broader critical analysis, “50 Years Is Enough” is an international coalition organized around the 50th anniversary of the World Bank and IMF. Involving scores of environment, development, religious, labor, student, and health groups, it represents an unprecedented worldwide movement to reform these International Financial Institutions. At the same time, many groups and networks around the globe are working on health and development issues from a grassroots perspective, trying to listen and respond to what people want. They are attempting to create broad public awareness of our current global crisis, and to organize a groundswell of pressure from below on the world’s policy making bodies. The Christian Medical Commission has long carried an outspoken voice of conscience in these matters. So have two grassroots coalitions based in the South: the Third World Network with its coordinating body in Malaysia, and the International People’s Health Council, based in Nicaragua.
It is urgent that all of us concerned with the health and rights of disadvantaged people become familiar with the World Bank’s Investing in Health Report. We must speak out clearly about the harm its policies are likely to do, and clarify whose interests those policies serve. Never has the need been greater for a coordinated global effort to demand that world leaders and policy makers be accountable to humanity.
To become better informed about the full range of objections to the Report and the World Bank’s controversial prescription for health, you can write to:
Health Action International— Europe
Jacob van Lennepkade 334 T
1053 NJ Amsterdam
For more information on the “50 Years is Enough” campaign, the groups involved, and a calendar of events, you can contact:
The Bank Information Center
2025 I Street, NW, Suite 522
Washington, DC 20006.
tel. (202) 466-8191
fax. (202) 466-8189.