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Africa: Hazardous to Health, 1
Date distributed (ymd): 020418
Africa Action Document
Africa Policy Electronic Distribution List: an information
service provided by AFRICA ACTION (incorporating the
Africa
Policy Information Center, The Africa Fund, and the
American
Committee on Africa). Find more information for action
for
Africa at http://www.africaaction.org
+++++++++++++++++++++Document Profile+++++++++++++++++++++
Region: Continent-Wide
Issue Areas: +health+ +economy/development+
SUMMARY CONTENTS:
This posting contains the first part of an Africa Action
position
paper released on April 18 at a joint press briefing
in Washington
with the World Bank Bonds Boycott. On the eve of the
press
conference, Africa Action executive director Salih Booker
stated,
"The policies of the World Bank and IMF have eroded
Africa's health
care systems and intensified the poverty of Africa's
people. These
institutions must be made accountable for their role
in causing the
worst health crisis in human history, which Africa now
faces."
Africa Action supports the World Bank Bonds Boycott
Campaign as a
tool to exert pressure on the World Bank to cancel Africa's
debt
and end the imposition of economic policies harmful
to health.
For more information see http://www.africaaction.org
+++++++++++++++++end profile++++++++++++++++++++++++++++++
Hazardous to Health: The World Bank and IMF in Africa
Africa Action Position Paper
By: Ann-Louise Colgan, Research Associate, Africa Action
April, 2002
Part 1
Health is a fundamental human right, recognized in the
Universal
Declaration of Human Rights (1948), and the Constitution
of the
World Health Organization (1946). Health is also an
essential
component of development, vital to a nation's growth
and internal
stability.
Over the past two decades, the World Bank and International
Monetary Fund (IMF) have undermined Africa's health
through the
policies they have imposed. The dependence of poor and
highly
indebted African countries on World Bank and IMF loans
has given
these institutions leverage to control economic policy-making
in
these countries. The policies mandated by the World
Bank and IMF
have forced African governments to orient their economies
towards
greater integration in international markets at the
expense of
social services and long-term development priorities.
They have
reduced the role of the state and cut back government
expenditure.
While many African countries succeeded in improving
their health
care systems in the first decades after independence,
the
intervention of the World Bank and IMF reversed this
progress.
Investments in health care by African governments in
the 1970s
achieved improvements in key health indicators. In Kenya,
for
example, child mortality was reduced by almost 50% in
the first two
decades after independence in 1963 [1]. Across sub-Saharan
Africa,
the first decades after independence saw significant
increases in
life expectancy, from an average of 44 years to more
than 50 years
[2].
In the 1980s and 1990s, however, African governments
had to cede
control over their economic decision-making in order
to qualify for
World Bank and IMF loans. The conditions attached to
these loans
undid much of the progress achieved in public health.
The policies
dictated by the World Bank and IMF exacerbated poverty,
providing
fertile ground for the spread of HIV/AIDS and other
infectious
diseases. Cutbacks in health budgets and privatization
of health
services eroded previous advances in health care and
weakened the
capacity of African governments to cope with the growing
health
crisis. Consequently, during the past two decades the
life
expectancy of Africans has dropped by 15 years [3].
Africa Action calls for an end to World Bank and IMF
policies that
undermine health. This requires canceling the debts
that prevent
African governments from making their full contribution
to
addressing the health crisis. It also requires ending
the
imposition of harmful economic policies as conditions
for future
loans or grants.
This position paper provides a brief background overview
of World
Bank and IMF policies. It focuses particularly on their
impact on
health.
1. The World Bank and IMF in Africa
The World Bank and IMF were created at the Bretton Woods
Conference
in New Hampshire, U.S.A., in 1944. They were designed
as pillars
of the post-war global economic order. The World Bank's
focus is
the provision of long-term loans to support development
projects
and programs. The IMF concentrates on providing loans
to stabilize
countries with short-term financial crises.
The World Bank and IMF became increasingly powerful
in Africa with
the economic crisis of the early 1980s. In the late
1970s, rising
oil prices, rising interest rates, and falling prices
for other
primary commodities left many poor African countries
unable to
repay mounting foreign debts. In the early 1980s, Africa's
debt
crisis worsened. The ratio of its foreign debt to its
export
income grew to 500% [4]. African countries needed increasing
amounts of "hard currency" to repay their
external debts (i.e.
convertible foreign currencies such as dollars and deutschmarks).
But their share of world trade was decreasing and their
export
earnings dropped as global prices for primary commodities
fell.
The reliance of many African countries on imports of
manufactured
goods, which they themselves did not produce, left them
importing
more while they exported less. Their balance of payments
problems
worsened and their foreign debt burdens became unsustainable.
African governments needed new loans to pay their outstanding
debts
and to meet critical domestic needs. The World Bank
and IMF became
key providers of loans to countries that were unable
to borrow
elsewhere. They took over from wealthy governments and
private
banks as the main source of loans for poor countries.
These
institutions provided "hard currency" loans
to African countries to
insure repayment of their external debts and to restore
economic
stability.
The World Bank and IMF were important instruments of
Western powers
during the Cold War in both economic and political terms.
They
performed a political function by subordinating development
objectives to geostrategic interests. They also promoted
an
economic agenda that sought to preserve Western dominance
in the
global economy.
Not surprisingly, the World Bank and IMF are directed
by the
governments of the world's richest countries. Combined,
the "Group
of 7" (U.S., Britain, Canada, France, Germany,
Italy and Japan)
hold more than 40% of the votes on the Boards of Directors
of these
institutions. The U.S. alone accounts for almost 20%
[5].
It was U.S. policy during the Reagan Administration
in the early
1980s, to expand the role of the World Bank and IMF
in managing
developing economies [6]. The dependence of African
countries on
new loans gave the World Bank and IMF great leverage.
The
conditions attached to these loans required African
countries to
submit to economic changes that favored "free markets."
This standard policy package imposed by the World Bank
and IMF was
termed "structural adjustment." This referred
to the purpose of
correcting trade imbalances and government deficits.
It involved
cutting back the role of the state and promoting the
role of the
private sector. The ideology behind these policies is
often labeled
"neo-liberalism," "free market fundamentalism,"or
the "Washington
Consensus." From the 1970s on, this orientation
became the
dominant economic paradigm for rich country governments
and for the
international financial institutions.
The basic assumption behind structural adjustment was
that an
increased role for the market would bring benefits to
both poor and
rich. In the Darwinian world of international markets,
the
strongest would win out. This would encourage others
to follow
their example. The development of a market economy with
a greater
role for the private sector was therefore seen as the
key to
stimulating economic growth.
The crisis experienced by African countries in the early
1980s did
expose the need for economic adjustments. With declining
incomes
and rising expenses, African economies were becoming
badly
distorted. Corrective reforms became increasingly necessary.
The
key issue with adjustments of this kind, however, is
whether they
build the capacity to recover and whether they promote
long-term
development. The adjustments dictated by the World Bank
and IMF
did neither.
African countries require essential investments in health,
education and infrastructure before they can compete
internationally. The World Bank and IMF instead required
countries
to reduce state support and protection for social and
economic
sectors. They insisted on pushing weak African economies
into
markets where they were unable to compete with the might
of the
international private sector. These policies further
undermined
the economic development of African countries.
2. What is Structural Adjustment?
Structural adjustment refers to a package of economic
policy
changes designed to fix imbalances in trade and government
budgets.
In trade, the objective is to improve a country's balance
of
payments, by increasing exports and reducing imports.
For budgets,
the objective is to increase government income and to
reduce
expenses. In theory, achieving these goals will enable
a country to
recover macroeconomic stability in the short-term. It
will also set
the stage for long-term growth and development.
The structural adjustment programs of the early 1980s
were meant to
provide temporary financing to borrowing countries to
stabilize
their economies. These loans were intended to enable
governments
to repay their debts, reduce deficits in spending, and
close the
gap between imports and exports. Gradually, these loans
evolved
into a core set of economic policy changes required
by the World
Bank and IMF. They were designed to further integrate
African
countries into the global economy, to strengthen the
role of the
international private sector, and to encourage growth
through
trade.
Typical components of adjustment programs included cutbacks
in
government spending, privatization of government-held
enterprises
and services, and reduced protection for domestic industry.
Other
types of adjustment involved currency devaluation, increased
interest rates, and the elimination of food subsidies.
The
underlying intention was to minimize the role of the
state.
World Bank and IMF adjustment programs differ according
to the role
of each institution. In general, IMF loan conditions
focus on
monetary and fiscal issues. They emphasize programs
to address
inflation and balance of payments problems, often requiring
specific levels of cutbacks in total government spending.
The
adjustment programs of the World Bank are wider in scope,
with a
more long-term development focus. They highlight market
liberalization and public sector reforms, seen as promoting
growth
through expanding exports, particularly of cash crops.
Despite these differences, World Bank and IMF adjustment
programs
reinforce each other. One way is called "cross-conditionality."
This means that a government generally must first be
approved by
the IMF, before qualifying for an adjustment loan from
the World
Bank. Their agendas also overlap in the financial sector
in
particular. Both work to impose fiscal austerity and
to eliminate
subsidies for workers, for example. The market-oriented
perspective of both institutions makes their policy
prescriptions
complementary.
Adjustment lending constitutes 100% of IMF loans. In
2001,
approximately 27% of World Bank lending to African countries
was
for "adjustment." In the World Bank's total
loan portfolio,
adjustment lending generally accounts for between one-third
and
one-half [7]. The remainder of World Bank loans are
disbursed for
development projects and programs. The project portfolio
of the
Bank covers such areas as infrastructure, agricultural
and
environmental development, and human resource development.
In some
cases, the projects supported by World Bank loans do
make useful
contributions to development. But these occasional successes
must
be weighed against the negative effects of increasing
debt, imposed
economic policies and their consequences.
The past two decades of World Bank and IMF structural
adjustment in
Africa have led to greater social and economic deprivation,
and an
increased dependence of African countries on external
loans. The
failure of structural adjustment has been so dramatic
that some
critics of the World Bank and IMF argue that the policies
imposed
on African countries were never intended to promote
development.
On the contrary, they claim that their intention was
to keep these
countries economically weak and dependent.
The most industrialized countries in the world have
actually
developed under conditions opposite to those imposed
by the World
Bank and IMF on African governments. The U.S. and the
countries of
Western Europe accorded a central role to the state
in economic
activity, and practiced strong protectionism, with subsidies
for
domestic industries. Under World Bank and IMF programs,
African
countries have been forced to cut back or abandon the
very
provisions which helped rich countries to grow and prosper
in the
past.
Even more significantly, the policies of the World Bank
and IMF
have impeded Africa's development by undermining Africa's
health.
Their free market perspective has failed to consider
health an
integral component of an economic growth and human development
strategy. Instead, the policies of these institutions
have caused
a deterioration in health and in health care services
across the
African continent.
3. Poverty and Health Care Cuts
Health status is influenced by socioeconomic factors
as well as by
the state of health care delivery systems. The policies
prescribed
by the World Bank and IMF have increased poverty in
African
countries and mandated cutbacks in the health sector.
Combined,
this has caused a massive deterioration in the continent's
health
status.
The health care systems inherited by most African states
after the
colonial era were unevenly weighted toward privileged
elites and
urban centers. In the 1960s and 1970s, substantial progress
was
made in improving the reach of health care services
in many African
countries. Most African governments increased spending
on the
health sector during this period. They endeavored to
extend
primary health care and to emphasize the development
of a public
health system to redress the inequalities of the colonial
era. The
World Health Organization (WHO) emphasized the importance
of
primary healthcare at the historic Alma Ata Conference
in 1978.
The Declaration of Alma Ata focused on a community-based
approach
to health care and resolved that comprehensive health
care was a
basic right and a responsibility of government.
These efforts undertaken by African governments after
independence
were quite successful. There were increases in the numbers
of
health professionals employed in the public sector,
and
improvements in health care infrastructure in many countries.
There was also some success in extending care to formerly
unserved
areas and populations. Across the continent, there were
improvements in key health care indicators, such as
infant
mortality rates and life expectancy.
In Zambia, the post-independence government expanded
public health
care services throughout the country. The number of
doctors and
nurses was also significantly increased during this
time. Infant
mortality was reduced from 123 per 1,000 live births
in 1965, to 85
in 1984 [8]. In Tanzania, during the first two decades
of
independence, the government succeeded in expanding
access to
health care nationwide. By 1977, more than three-quarters
of
Tanzania's population lived within 5 km of a health
care facility
[9].
While the progress across the African continent was
uneven, it was
significant, not only because of its positive effects
on the health
of African populations. It also illustrated a commitment
by
African leaders to the principle of building and developing
their
health care systems.
With the economic crisis of the 1980s, much of Africa's
economic
and social progress over the previous two decades began
to come
undone. As African governments became clients of the
World Bank
and IMF, they forfeited control over their domestic
spending
priorities. The loan conditions of these institutions
forced
contraction in government spending on health and other
social
services.
Poverty and Health
The relationship between poverty and ill-health is well
established. The economic austerity policies attached
to World
Bank and IMF loans led to intensified poverty in many
African
countries in the 1980s and 1990s. This increased the
vulnerability
of African populations to the spread of diseases and
to other
health problems.
The public sector job losses and wage cuts associated
with World
Bank and IMF programs increased hardship in many African
countries.
During the 1980s, when most African countries came under
World Bank
and IMF tutelage, per capita income declined by 25%
in most of sub-
Saharan Africa [10]. The removal of food and agricultural
subsidies caused prices to rise and created increased
food
insecurity. This led to a marked deterioration in nutritional
status, especially among women and children. In Zambia,
for
instance, following the elimination of food subsidies,
many poor
families had to reduce the number of meals per day from
two to one
[11]. Malnutrition resulted in low birth weights among
infants and
stunted growth among children in many countries. It
is currently
estimated that one in every three children in Africa
is underweight
[12]. In general, between one-quarter and one-third
of the
population of sub-Saharan Africa is chronically malnourished.
The deepening poverty across the continent has created
fertile
ground for the spread of infectious diseases. Declining
living
conditions and reduced access to basic services have
led to
decreased health status. In Africa today, almost half
of the
population lacks access to safe water and adequate sanitation
services [13]. As immune systems have become weakened,
the
susceptibility of Africa's people to infectious diseases
has
greatly increased. A joint release issued by the WHO
and the Joint
UN Programme on HIV/AIDS (UNAIDS) in April 2001 reports
that the
number of cases of tuberculosis in Africa will reach
3.3 million
per year by 2005 [14]. The WHO reported in 2001 that
almost 3,000
Africans die each day of malaria. Each year in Africa,
the disease
takes the lives of more than 500,000 children below
the age of five
[15].
Most devastating of all has been the impact of the HIV/AIDS
pandemic. The spread of HIV/AIDS in Africa has been
facilitated by
worsening poverty and by the conditions of inequality
intensified
by World Bank and IMF policies. Economic insecurity
has reinforced
migrant labor patterns, which in turn have increased
the risk of
infection. Reduced access to health care services has
increased
the spread of sexually transmitted diseases and the
vulnerability
to HIV infection.
(Continued in part 2)
Endnotes for part 1
1. Paul Kieti Kimalu, Debt Relief and Health Care in
Kenya
(Nairobi: Kenya Institute for Public Policy Research
and Analysis,
July 2001).
http://www.wider.unu.edu/conference/conference-2001-2/poster%20pa
pers/kimalu.pdf
2. The World Bank, World Development Indicators (Washington,
2001). See table 8 at:
http://www.worldbank.org/poverty/data/trends/mort.htm
3. Reported from the fourth general assembly of the
African
Population Commission, Addis Ababa, Ethiopia, February
2002. See
http://www.globalpolicy.org/socecon/develop/aids/africa/LifeXpec0
212.htm
4. Kevin Watkins et al, The Oxfam Poverty Report (Oxford,
1995),
p. 74.
5. The U.S. holds 16.45% of the votes at the World Bank,
and
over 17% of the votes at the International Monetary
Fund.
6. Rick Rowden, "Globalization and Protest Against
the Policies
and Outcomes of a Corporate-Led Process", a paper
presented at
the "Poverty and Globalization Conference,"
St. John's
University, Jamaica, NY, April 2001. (Available upon
request
from the author at rowden@action.org)
7. The World Bank, Annual Report 2001 (Washington, 2001),
volume
1, p. 154.
http://www.worldbank.org/annualreport/2001/Bank_splash12.html
8. Meredeth Turshen, Privatizing Health Services in
Africa (New
Brunswick, NJ, Rutgers University Press, 1999), p. 38.
9. John Yudkin, "Tanzania: still optimistic after
all these
years?", in The Lancet (1999; 353: 1519-21).
10. UNICEF, "Balance sheet of human progress in
Africa," posted
beginning in September 2000 at
http://www.unicef.org/miscellaneous/balance.htm
11. Turshen, Privatizing Health Services in Africa, p. 17.
12. UNICEF, The State of the World's Children (New York,
1998),
section on "The Silent Emergency".
http://www.unicef.org/sowc98/silent.htm
13. UNICEF, "Balance sheet of human progress in Africa."
14. Joint UNAIDS/WHO Press Release, "HIV Causing
Tuberculosis
Cases to Double in Africa", April 23, 2001. See
http://www.unaids.org/whatsnew/press/eng/pressarc01/
TB_240401.html
15. "Roll Back Malaria" a partnership of the
World Health
Organization (WHO), UNICEF, UNDP and the World Bank.
See
http://www.rbm.who.int
************************************************************
Message-Id: <200204181201.IAA09130@server.africapolicy.org>
From: "Africa Action" <apic@igc.org>
Date: Thu, 18 Apr 2002 07:47:58 -0500
Subject: Africa: Hazardous to Health, 1
Editor: Ali B. Ali-Dinar
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