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Africa: Hazardous to Health, 1
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
See the full report in one file, including linked endnotes, at
http://www.africaaction.org/action/sap0204.htm
+++++++++++++++++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 subSaharan
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)
This material is distributed by Africa Action (incorporating the
Africa Policy Information Center, The Africa Fund, and the
American Committee on Africa). Africa Action's information
services provide accessible information and analysis in order to
promote U.S. and international policies toward Africa that advance
economic, political and social justice and the full spectrum of
human rights.
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