Macroeconomic Policies
Macroeconomic policies are the actions and adjustments by governments to influence the economic health and stability of an entire country.
Today, macroeconomic policies imposed as part of loan conditions constrain many developing countries and have a direct impact on people's health.
It is essential to understand the relationship between macroeconomic policy and health, and what we can do to lift these crushing restrictions and allow governments to invest in their health system.
The history of macroeconomic policies and development
Following the oil crisis in the 1970s, the initiation of aggressive lending by commercial banks, and the increase in interest rates in the U.S. and other wealthy countries, the developing world faced mounting debts. In response, the International Monetary Fund (IMF) implemented structural adjustment programs to ensure that countries would pay back their creditors, regardless of the legitimacy of these loans. Structural adjustment programs included a series of government policy changes that were especially harmful for the poor including cuts to subsidies on basic food products, fuel, water and sanitation, public transportation and medicines.
Health systems in poor countries were hard hit by the reduction in public spending. In many countries, as a result of structural adjustment programs, fees were implemented in public hospitals and clinics that had previously offered care free of charge. These user fees reduced access to care, especially for the most vulnerable.
While the IMF and World Bank have publicly stated that they are no longer in favor of user fees, the charges persist in many countries that now rely on this revenue as one of the only dependable forms of income in the context of permanently strapped budgets. The quality of care and the morale of health workers also suffered as salaries were slashed and limits were placed on the number of health care workers that can be hired.
The situation today
While there have been some improvements, macroeconomic policies continue to play a critical role in influencing what resources are available for ministries of health.
One area of particular concern is the severe shortage of health care workers in low-resource countries. In 2006, the World Health Organization estimated that there is a need for 4 million additional health care workers. Despite this, the International Monetary Fund has imposed restrictions such as salary caps so that poor countries can't hire more health workers, even if they have the funds to do so.
We support a number of campaigns led by global economic justice advocates, and recommend them for more information or to get involved.
- Debt cancellation for low income countries -- one of the most persistent groups working on the campaign to reduce the debt of poor countries is Jubilee USA Network.
- Increased voice for low-resource countries in global economic policy decision-making -- the Third World Network offers global economic policy options that give more voice and representation to low income countries.
- Increased civil society capacity to conduct social auditing of public resources -- a number of groups such as Action Aid International and the International Budget Partnership are working with civil society in low-resource countries to increase their capacity to hold public institutions accountable for the use of resources made available through debt cancellation and foreign assistance.
- Global financial transactions tax -- this would be a modest tax on the trades of stock, currency, options, and other derivatives. Such a tax would generate billions of dollars that could be used for needed health and development programs worldwide and also would be a disincentive for the rampant speculation that has contributed to the global economic crisis. Rethinkingfinance.org has more information.