Health Care Policies Affecting Third World Countries

Katherine Cook

By the end of the day today, three thousand people will have died from malaria, twenty-five thousand people will have been infected with tuberculosis, and over twenty-six thousand children will have died from AIDS. What is causing this epidemic to grow so intensely? The policies of the World Bank and International Monetary Fund are deteriorating the health conditions in Sub-Saharan Africa. Problems with these policies and pharmaceutical companies are two reasons why the battles of health care problems in third world countries are getting worse. Between Structural Adjustment Policies, the International Monetary Fund, and the World Bank, severe measures are being put into action in order to save the lives of millions. The vicious cycle of accruing and paying off debt has the African governments in a whirl-wind of financial crisis. Help is being given by the United States, yet selfishness is blinding rich and powerful companies from offering sufficient aid to Africa. The Africans have to depend on these countries for support and survival. Sub-Saharan Africa is desperate for sufficient aid.

Malnutrition

Malnutrition is a major world-wide health problem. Africa, the most impoverished and devastated region of the world, suffers the most from malnutrition.  Characterized by inadequate or excess intake of protein, energy, and micronutrients, malnutrition is the leading cause of diseases (WHO, 2008). The most impactful diseases include tuberculosis, malaria, and AIDS. Together, these diseases are killing more than 6 million people each year (Pharma, 2008). While TB and malaria are curable, AIDS is not.  According to Suneetha Kadiyala, an International Food Policy Research Institute scientist, malnutrition is linked to AIDS through a brutal cycle, declaring that “insufficient intake [of calories] can enhance the progression of the virus” (Porter, 2006).  Already compromised by a presence of HIV, the immune system becomes less effective at defending against infections (Porter, 2006). The link between diseases and malnutrition are growing stronger as the demands for cures are getting higher.

Unhealthy lifestyles are adding to the malnutrition problems.  Because of their lack of education, African women are vulnerable with receiving proper nutrients and maintaining a healthy nutritional status for themselves as well as their children. Women are experiencing difficulties with breasting-feeding and child-rearing techniques. Babies are running the risk of developing mental problems, such as social developmental skills, and physical problems such as low birth weight (Shah, 2008).

Because they are being born into this world of undernourishment, children are becoming easily susceptible to contracting diseases. Dr. Kevin De Cock, WHO chief official, believes that “the fact children aren’t getting treated is a sign of the frailty of health systems” (Rosenthal 2006). The two leading causes of death in children are pneumonia and diarrhea. Infectious diarrhea is caused by many different viruses, bacteria and parasites that strip the body of hydrating and retaining nutrients (Dictionary.com).  Meanwhile, pneumonia is defined as a severe disease characterized by fever, a cough with blood-tinged phlegm, and difficult breathing (Dictionary.com). These diseases are causing serious mortality. The mortality rate in Africa is the highest in the world; one in every five children die before the age of five. These preventable diseases are impacting the future of Africa, as the loss of children means the loss of future workers, communities, and leaders.

World Bank and International Monetary Fund

The World Bank and International Monetary Fund are the main companies behind controlling the financial and economical circumstances in developing countries. The World Bank and IMF consist of the world’s largest public lenders and are directed by the governments of the world’s richest countries (Colgan, 2002). These international institutions are working closely together to reduce poverty and promote economic development. Through offering loans to countries, these corporations had hoped to structure and fix the broken economies. Conversely, these promises became broken as policies only worsened Africa’s health. 

 The World Bank and IMF make up the backbone of many poor nations’ economic decisions.  Due to a worldwide collapse in commodity prices that developing countries’ export and high interest rates in the 1980s, poor countries were unable to make payments (CorpWatch, 2000). The countries were left to depend on World Bank and IMF.  As African governments became clients of the World Bank and IMF, they had to forfeit control over their domestic spending priorities (Colgan, 2002). African governments had to first agree to follow specific conditions set by IMF and World Bank through a set of policies known as the Structural Adjustment Policies, or SAPs, before they were allowed to borrow money (Colgan, 2002).  The conditions attached to the loans required African countries to submit to economic changes that favored “free markets” (Colgan, 2002). The “free market” idea demanded that countries keep their wage levels low and prescribed the countries to open up and allow more imports in and more exports of their commodities (Shah, 2008). 

Structural Adjustment Policies

Structural Adjustment Policies provide guidelines for formatting the health care system. Created by the IMF and World Bank, SAPs are loans designed to promote economic growth, to generate income, and to pay off the debt which the countries have accumulated (Wikipedia, 2008).  The policies were originally made to provide temporary financing but because there was such a desperate need that could last a lifetime, the structural adjustment programs have evolved into a core set of economic policy changes required for poor countries (Colgan, 2002). The SAPs offered loans to countries in order to restructure their economy yet as a result their economies structure became less stable and more prone to downfalls.

Mary-Louise Colgan, a Research Assistant with Africa Action group, claims “the ideology behind these policies is labeled ‘neo-liberalism’”(Colgan, 2002). Neoliberalism is “a political movement that blends traditional liberal concerns for social justice with an emphasis on economic growth” (Wikipedia, 2008). The main ideas of neoliberalism are proposed in a four step program which includes deregulation, privatization, reduction of public expenditure for social services, and free trade. Deregulation includes eliminating tariffs and helping countries compete with domestically-produced goods (Global Exchange, 2008).  By privatization, the control of economic activities would be taken away from the government and instead placed in the hands of private enterprises (Global Exchange, 2008). As a result, countries would compete for foreign investments by offering low wages and tax breaks (Global Exchange, 2008).  The goal of reducing health and education expenditures is more repaid debts. The ideals presented within this model revolve maintaining money and control, two factors that greatly contribute to determining the health status of a country. However, this model isn’t the only hindrance for Africans.

Drug Companies

Other corporations that are affecting health care in Africa are the drug companies. The drugs being sold by pharmaceutical companies are available though they come with a hefty price. Many African people live on $1 a day and the average annual family incomes are well below $1,000 a year (Insider, 2008). As a result, people are unable to purchase effective drugs due to the high cost. Characterized by having a small per capita gross national profit, African governments are hoping to obtain generic, cheaper drugs. What is keeping people from getting the drugs they need? 

The pharmaceutical companies offering the drugs want governments to protect their interests instead of the interests in Africa.  By the “enforcement of strict patent laws on medicines, allowing companies to monopolize their products, and charging high prices for medicines,” that many depend on in Sub-Sahara Africa, companies wish to gain profit (Shah, 2008). The firms view local manufacturers as a threat for their copycat drugs and cheaper prices that more people are buying (McGeary, 2001).

Patent rights are one of the main reasons why Sub-Saharan Africa is unable to receive cheaper, generic drugs. One agreement that is hindering use of these drugs is TRIPS, Trade- Related Aspects of Intellectual Property Rights Agreement.  TRIPS is an agreement that prevents other countries from producing the same product of another company without any license. TRIPs give the government the right to grant a license to a domestic manufacturer of a generic drug, provided that they pay the patent holder (Hink, 2008). While both companies are making money, the competition often causes for drastically lowers prices (Hink, 2008). Because of this patent, countries are unable to produce generic drugs, especially drugs for AIDS.  South Africa raised their voice in disagreement with TRIPS, insisting the drugs were overpriced and deemed it harder for them to gain access to the drugs.  Nonetheless, the US government threatened and forced them to back down. “Prices of AIDS drugs could be reduced by an astonishing 95% if the pharmaceutical multinationals did not have the monopoly on drugs export, a monopoly to be tried in South Africa, importing cheaper, generic drugs” (Mutum, 2001). Though World Bank and IMF may view patents as beneficial, people are viewing it as anything but an aid to their health.

Another reason people are not receiving proper drugs is because of marketing. Because of this, drug companies are losing focus on providing proper health care. “Multinational pharmaceutical companies neglect the diseases of the tropics…because there is…no market” (Shah, 2008).  Drug companies sell to make profit but because little money is circulated throughout Sub-Saharan region, companies feel it’s unnecessary to reach out. Instead, markets for pharmaceutical companies are more focused on finding wealthy people to purchase their products (Shah, 2008).  The very little purchasing power of African people is causing supply of medicine to be limited.

Critics are calling some “new” drugs anything but innovative. Instead, drug companies are barely altering the present drugs instead of researching and finding new drugs. Nathan Ford, of Médicins Sans Frontiéres believes “we are getting more and more drugs of less and less use, including Me Too drugs; the tenth headache pills; the 15th Viagra.”  No new medicines are coming out and people are left with old drugs that aren’t working.  With all the treatments coming out, less than 1% are for tropical diseases (Shah 2008).  Of that 1%, pharmaceutical companies have developed a one-a-day, anti-retroviral cocktail, taken to treat the virus that causes AIDS (Hink, 2008). The pill combines three widely used AIDS drugs into a single dose and has been distributed in fifteen countries (Harrison, 2008). However, difficulties have risen from this drug. Treatment comes with the price of $15,000, which is the amount a person must pay for a year’s supply of the medicine (Hink, 2008). Senegal is lowering prices 75% to 80%, yet the therapy is still costing at $1,200 a year for people who earn $510 a year (Hink, 2008). Drugs are being manufactured yet access to receiving them comes with difficulty. It’s no wonder the poor aren’t getting healthier.            

Effect: Disease & Debt

The effects of World Bank and International Monetary Fund’s policies are consequentially impacting health of Africans. Global Exchange (2001) notes that “the Sub-Saharan debt crisis and IMF-mandated structural adjustment policies have helped spread AIDS.”  Global Exchange furthers their belief by revealing  that “ the fact that Africans are dying in horrendous numbers is because they are poor…and that poverty has been greatly exacerbated by the policies of the IMF and the World Bank, two institutions controlled by the world’s wealthy nations” (Global Exchange, 2001). By providing ground for the spread of HIV/AIDS and other infectious diseases, World Bank and IMF are only causing more problems to rise (Colgan, 2002).

By promoting the SAPs and free trade, “these two institutions have forced cuts in health care, education, and other social services for millions” (Global Exchange, 2001). The 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 this health emergency (Colgan, 2002). As government spending on health care is being cut back, the amounts being paid by African governments to foreign creditors continues to increase (Shah, 2008). Meanwhile, health care privatization is focusing on individual support rather than strong public support, which is exactly what Africa needs. Despite these devastating consequences, the World Bank and IMF have continued to push for the privatization of public health services.

The conditions attached to these loans undid much of the progress achieved in public health and instead left people to suffer more in this health crisis (Colgan 2002). None of the countries have emerged from their debt problems and instead most countries now have much higher levels of debt than when they first accepted IMF/World Bank (World Bank, 2008). The debt problem have the governments in a vicious financial cycle, causing African governments to put more focus on repaying their debts, rather than on providing funding for their own people.

Effect: Rich and Poor Gap

The SAPs are benefiting the rich and harming the poor. “The basic assumption behind structural adjustment was that an increased role for the market would bring benefits to both poor and rich” (Colgan, 2002). However, this assumption is proven inaccurate. Developed countries grow rich by selling cheap products for a high price and buying expensive products for a low price, causing a significant imbalance between the two groups (Shah, 2008). Eliminating tariffs is also another reason why the gap is growing. By stopping the tax collection on imports, domestic producers have to compete, with great difficulty, against rich foreign suppliers (Global Exchange, 2008). The result is closed businesses and layoffs (Global Exchange, 2008). The closed businesses and competitive producers are causing people to forfeit their money and crops, leaving them for very little for live off of. The health care decreases as taxes grow, as businesses close, and as foreign suppliers dominate over African nations. Originally established for three to five years, the short-term goals of the SAPs have left a lasting impact.

The World Bank and IMF have steered away from enhancing African health systems and have placed value on fiscal gaining. The rich countries are providing resources best for themselves, including the cheap hiring process of medical staff from different countries and using people in poorer countries as test dummies for drugs.  Ultimately, these people’s health is suffering because of the actions from the World Bank and the IMF.

Solutions

According to Global Exchange (2001), twenty-five million HIV positive people in Sub-Saharan African are “living with a death sentence not because the drugs to treat them do not exist but because government officials in the world’s wealthy countries don’t have the political will to put human life above corporate profit.” Because of the lack of political will from corporations, Africa is suffering more than should.  More people are getting sick as a result of drug companies actions. The patents, high prices, and enforcements are making it difficult for people to obtain the drugs they need. Alternatives and easier access for cheaper drugs would clarify some of the questions of power that are being seen between the policy-holders and the Africans. Furthermore, canceling debts and raising wages are just two measures that could be taken. The government policies and procedures being practiced today are inadequate and need change.

By prioritizing their goals, the World Bank and IMF could fulfill their promises. Public health expert Ramanan Laxminarayan stresses that “having a single, unified picture on what the country wants for its health would actually be a good way on focusing resources on its priorities,”  instead of concentrating on financial gain (Block, 2008).  Another priority to alter is through maintaining the flow of money.  Companies are causing the poor to divert money away from essential items, such as food, and are adding money to paying for expensive, patented medicines, thereby adding to problems of malnutrition (Shah, 2008). The cost of proper medicine is hindering the less fortunate from buying and allowing the more powerful companies to sell.

The corporations have committed themselves to a “poverty reduction” goal in recent years through Poverty Reduction Strategy Papers. The PRSPs make governments outline their development ideas and strategies for the future. By globally prioritizing health, all countries would be on the same track. As a result of PRSPs, a more flexible and creative approach to policy creation has been implemented at the IMF and World Bank (Wikipedia, 2008).

Conclusion

According to the Universal Declaration of Human Rights, health is a fundamental human right. The right for people to receive food, education, and health care are vital for any country Furthermore, health is crucial for a nation’s growth and solidity (Colgan, 2002). Because they are subordinated to the IMF and World Bank, many third world countries are not receiving this right of health. Global Exchange claims that IMF and World Bank’s “erosion of basic human rights and their perversion of the democratic process have made the institutions a clear and present threat to the well being of hundreds of millions of people worldwide” (World Bank, 2008). If conducted and sought out properly, these policies could positively affect the health care in third world countries. The reforming of the policies and actions of WB and IMF could change the course of economies and financial situations, which would affect the lives of millions.