Macroeconomic policies are the actions and adjustments by governments – either on the local or the international level – 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. The long-term effects of these policies can be quite severe and can impair a country’s ability to build effective health systems or respond to health emergencies, such as Ebola.
International trade agreements, which are often negotiated in secret and without the presence of civil society at the table, often include policies that favor multinational corporations (such as pharmaceutical companies) at the expense of affordable, easy access to medications for the poor and most vulnerable people.
It is essential to understand the relationship between macroeconomic policy, trade, and health, as well as what we as concerned citizens 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 cuts to subsidies on basic food products, fuel, water and sanitation, public transportation and medicines, which were particularly harmful to poor and vulnerable communities.
Health systems in poor countries were hard hit by the reduction in public spending and by the increased debt and interest rates that came along with loans. In many countries, structural adjustment programs implemented fees in public hospitals and clinics that had previously offered care free of charge. These user fees reduced access to care, especially for the marginal communities.
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. 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. The outbreak of several public health emergencies, such as Ebola, have underlined the urgent need for further reform and debt cancellation. Recent opposition to trade agreements have included the people’s voice against unfair regulations that would increase the cost of life-saving medicines.
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. We also partner with Seattle based partners, such as Community Alliance for Global Justice and Washington Fair Trade Coalition, to work for more just macroeconomic policies and fair trade policies.