Globalisation and health
BMJ 2002; 324 doi: https://doi.org/10.1136/bmj.324.7328.44 (Published 05 January 2002) Cite this as: BMJ 2002;324:44All rapid responses
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Looking at the arguments of many proponents of a critical position on
globalisation I am sometimes amazed by the lack of consideration for even
the most basic principles of (international) economics. Most of us seem
to accept the free exchange of goods and services (free markets and
division of labour) as standard operating procedure for our national
economies and also within the EU as the most efficient allocation
mechanism for scarce resources. Why does a trade regime become unfair if
it tries to promote these very same principles internationally? If it is
better to set the prices for goods by benign agreement rather than by
supply and demand (Colin Butler) why don’t we introduce this principle
into our national economic policies? David Ricardo’s theory of comparative
advantage describes a static position and does not guarantee an even /
fair distribution of the gains from trade (strategic trade policies could
take into account shifting comparative advantage, but let’s put this aside
for the moment). But why should developing countries not reap the benefits
of trade even if these benefits are unevenly distributed? What is really
the alternative for Uganda. Will it be able to develop a flourishing IT-
industry by closing it’s border’s to imports of Microsoft products? India
did not develop it’s IT-industry through protectionism, but through
investing into education.
“Trade and industry are the sectors where wealth is produced” (David
Legge) but it will be the political sphere which will determine how this
wealth shall be distributed. Nobody disputes that there will be winners
and losers. Inequalities are on the rise and this should be a source of
concern (but leaving aside sub-Saharan Africa most Developing Countries
are still better off in absolute terms than 10, 20 years ago). But if
mainstream economists including critics like Rudi Dornbusch agree that on
balance Globalisation will be beneficial why do some of us want to hold up
or revert Globalisation instead of trying to reap the benefits and to use
these benefits to the advantage of those who have not benefited from these
gains. However economic and trade policy are a rather unfit instrument for
distributional policies as these are highly susceptible to special
interest influence and rent seeking to the detriment of all of us. It
would make much more sense to address disadvantages and inequalities
through other measures such as international development policy,
environmental policy and health policy.
Competing interests: No competing interests
Rao (1) argues that trade between unequal partners is better for
everyone than no trade at all, since it is not a zero sum game. This
argument dates from the 19th century British economist, David Ricardo.
However, while specialisation and free trade will lead to increased total
production, the benefits between unequal partners, as Rao implicitly
admits, are rarely shared equally. Despite increased production, it is not
even certain that the population of the weaker economy will benefit; an
oversupply of goods produced by that and similar economies may lead to
lower wages. This is because the price of such goods is not set by benign
agreement, but by supply and demand.
As well, the doctrine of comparative advantage being of mutual
benefit holds only for a static position. (2) Uganda may have a
comparative disadvantage in software design, but if it produces only
coffee then its software industry can never develop. Furthermore, over-
specialisation in coffee will always leave it vulnerable to shifts in
fashion and bad weather, as well as over-supply.
While an oversupply of goods produced by the stronger economy is also
possible that economy’s strengths generally cushion it better from
adversity. These cushions include the flow of interest from poor to
wealthy populations, the leverage afforded to creditor populations over
the economic and social policies of indebted populations, and the
selective and self-serving use of tariffs and subsidies by more powerful
economies. For these reasons relative inequality remains very important.
Feacham admits that there are many failings with recent and current
global economic policy, but laments the naïveté of the health community
for going further than he will in its criticism. He claims that the health
community uses no, or only circular, citations to support their critique.
But Feacham again claims that globalisation has reduced poverty and
inequity. (3) In absolute terms, the number of calorie-deficient people in
the world has declined marginally in recent decades, but there are several
plausible explanations: “globalisation” is only one. In any case this is
hardly a record to boast of.
In terms of hard, tradeable currency, such as US dollars, the
evidence that global inequality has become more extreme in recent decades
is unequivocal. No authority disputes this, though some obfuscate by
referring instead to the slippery concept of income adjusted for
“purchasing power parity”. (4-5) In fact, the global Gini co-efficient
(using foreign exchange-adjusted currency) increased from an already high
value of 71% in 1964 to peak at 80% in 1995, before falling, very
slightly, to 79% in 1999. (5) In comparison Brazil, a country normally
considered to be extremely unfair, has a Gini coefficient of little more
than 60%.
It is the widening of the gap between rich and poor that so many of
the medical profession find unsettling, and so many activists find
outrageous. The “mainstream” view on globalisation and development that
Feacham identifies, (3) profits from and supports this inequality; power
allows it to become mainstream. To paraphrase Virchow, those concerned
with health have to find the courage to continue to challenge power.
1. Rao JN Globalisation should be supported BMJ 2002 324: 44 (5
January) [Full Text].
2. Mehmet O. 1999. Westernizing the Third World: the Eurocentricity
of economic development theories. Routledge, London, New York, NY, USA.
3. Feachem RGA Globalisation and health (author’s reply) BMJ 2002
324: 44 (5 January ) [Full Text].
4. Melchior A, Telle K, and Wiig H. 2000. Globalisation and
inequality. World income distribution and living standards, 1960-1998,
Rep. No. 6B. Royal Norwegian Ministry of Foreign Affairs; Norwegian
Institute of International Affairs (NUPI), Oslo [Full Text].
http://odin.dep.no/ud
5. Butler CD Inequality, global change and the sustainability of
civilisation. Glob Chge Humn Hlth 2000 1, 156-172 [Full Text].
http://www.baltzer.nl/kaphtml.htm/GLOB1
Competing interests: No competing interests
For poor people in poor region Globalisation is a desease
Like any other process, globalisation also affects different strata
of people differently. Feachem's article candidly admits this proposition.
However, the moot issue which needs to be elaborated empirically is how
and to what extent the forces of globalisation affect a range of people.
While working in one of the most backward regions of the world, i.e.,
north region of the state of Bihar in India, I have witnessed the health
services currently being provided to the majority of people, are entrapped
by old exloitative forces and unwittingly, the forces of globalisation are
helping the cause. Let me elaborate it.
In India, following independence, a large network of Primary Health
Centres (PHCs) was put in place which, in congruence with the notion of
welfare state, was intended to cater to the health demands of rural and/or
poor people. It showed promises beyond even few euphoric years but like
other sectors, health department also suffered from a work ethics devoid
of accountability and effeciency. By 1980s public health services were in
complete disarray and governemnt was coming under acute pressure to revive
it or undertake health policy reforms. At this critical juncture the
notion of globalisation with its cherished idea of letting market forces
work unhindered, provided much needed reprieve to the dwindling and
ineffecient health department of the state. As a result, the government
readily complied with the idea and private health sector encouraged by the
winds of globalisation became active.
At present the health service arena of rural Bihar is infested with
private doctors, quacks and all other paramedics who are cheerfully
filling the vaccum created by a retreating state. And the sole looser in
this saga is poor people who continue to languish without any immediate
prospect of improvemnet. Mushrooming of private clinics, medical stores
and other health related paraphernelia is largely attributed to the local
wealthy people who seized the opportunity to exploit underprivileged
class.
Hence globalisation has enveloped that region and many similar
underdeveloped regions with full force and by all accounts a qualitatively
compromised and deteriorated health service is the outcome. Without any
choice, sick people are infected with this hitherto unknown disease, that
is, globalisation and sadly its dignosis is not described in any medical
book.
Competing interests: No competing interests