International Finance and Health
How does international finance impact on health?
- International finance broadly relates to the flows of money between countries. It has a profound effect on the development prospects of poor countries worldwide, which in turn affects the ability of hundreds of millions of people to escape from poverty and ill health.
- Underlying international finance is a complex set of issues which is not easy for non-experts to understand. However, the current ‘credit crunch’ has begun to reveal the extent to which the international financial system has been mis-managed and corrupted over the last 30 years, with serious impacts on poverty, health, education and employment.
What are the current problems?
- The global economic crisis has made it clear that a fundamental rethink of the entire global financial system is required. How this is tackled will have far-reaching consequences for health on a global scale.
- Some of the most powerful economies have gathered, in the form of the self-appointed G8 and G20 group meetings, to begin discussions on international financial and economic reform. However, this process is fundamentally undemocratic, excluding the most affected countries, lacking accountability and transparency, and without any mandate or legal authority. (See EG4Health’s ’Open Letter to G20′).
- Therefore, these meetings are dominated by the very countries responsible for pushing the principles of ‘neoliberlism’, or free-market fundamentalism (financial deregulation, trade liberalisation, national industry privatisation, private foreign investment as the key to growth), which often disadvantage developing economies and have largely created the current crisis.
- The focus of these countries is on the immediate problems of financial insititutions and corporations, and fails to take adequate account of the primary concerns of people, including poverty, health and climate change.
- ‘Growth by itself, without appropriate social policies to ensure reasonable fairness in the way its benefits are distributed, brings little benefit to health equity’ (Report of the WHO Commission on the Social Determinants of Health, 2008)
- In this arena any proposed changes are likely to be minor and superficial, rather than the radical overhaul required to ensure a system capable of addressing the social determinants of health and health inequity.
What can be done?
There are realistic alternatives to the current financial system which give due consideration to its impacts on the determinants of health. The reforms proposed aim to:
- prevent the recurrent debt and financial crises which have plagued the developing world over the last 30 years
- end the conditionality of aid, debt cancellation and essential financing
- end the flow of financial resources from poorer countries, where they are most needed and can bring the greatest benefits, to the rich world
- end banking secrecy and tax havens, which facilitate tax evasion by transnational companies and promote corruption and capital flight.
EG4Health, along with many other civil society organisations throughout the world, are calling for the establishment of a genuinely democratic, transparent and accountable system of global economic governance. This would ensure that all decisions which are taken reflect the interests of the world population as a whole, and not only the financial and commercial interests and the ideological and geopolitical agendas of a small global elite.
For anyone interested in reading further, we suggest:
- Report of the WHO Commission on the Social Determinants of Health
- Statement on the proposed “Global Summit” to reform the international financial system
- New Economics Foundation (An independent ‘think and do’ tank: “we believe in economics as if people and the planet mattered”)
- “Drowning by numbers- The IMF, the World Bank and North-South Financial Flows“ by David Woodward
- Neoliberalism Article (Source: Wikipedia)
- ‘Protecting the Global Poor’ Ha-Joon Chang article, Prospect, July 2007
- Tax Justice Network
- Guardian series on tax justice and reform
- Dear Gordon: can we discuss the G20? The Lancet editorial, March 2009
- Engaging the health community in global economic reform The Lancet comment, March 2009