Global Economic Crisis and the Health of the Region

1
Global Economic Crisis and the Health of the
Region
Closing GapsProtecting achievements Facing new
challenges
Dr. Mirta Roses Periago Director
Ottawa, Canada. Official Visit March 30th
April 3rd, 2009
2
Global Economic Crisis

• The three Fs fuel, food, and
  finances--financial crisis, fuel and food
  prices, plus combined and mutually reinforcing
  environmental threats
• Global recession Spillover from developed
  economies into emerging economies
• Consequences in terms of poverty, malnutrition,
  and impact on the most vulnerable groups
• Risk of becoming a social and political crisis
• Cutbacks in domestic investment and international
  development assistance
• Threat to the real, not simply statistical,
  achievement of the MDGs

3
Global Economic Crisis

• THEREFORE.
• Avoid errors of previous structural adjustment
  programs, leading to disinvestment in the social
  sectors and reduction of the regulatory capacity
  of the State
• Call to maintain and increase investment in
  health/social sector and labor intensive programs
  in times of crisis
• Generate and strengthen protective/safety nets
  for poor and vulnerable groups and avoid more
  middle income groups to fall back into poverty
• Significant repercussions on global health and
  the work of PAHO/WHO

4
A DIFFERENT CRISIS All countries will be
affected, but to a different degree
GDP GROWTH IN THE DEVELOPED ECONOMIES In annual
variation rates
5
The private sector is the most exposed
LATIN AMERICA AND THE CARIBBEAN (SELECTED
COUNTRIES) VARIATION IN THE FOREIGN DEBT,
2006-JUNE 2008 (As a percentage of GDP)
6
In 2008 the Region completed six consecutive
years of growth
LATIN AMERICA AND THE CARIBBEAN RATES OF
VARIATION IN GROSS DOMESTIC PRODUCT 2008 (In
percentages)
GDP per capita of L.A. and the Caribbean grew at
over 3 annually for the fifth consecutive year
7
Between 2003 and 2007 poverty and extreme poverty
fell substantially...
LATIN AMERICA TRENDS IN POVERTY AND EXTREME
POVERTY 1980-2007
Millions of people
Percentage of people
Source Economic Commission for Latin America and
the Caribbean (ECLAC), based on special
tabulations from the household surveys of the
respective countries. a/Estimate corresponding
to 18 countries of the Region plus Haiti. The
figures placed on the upper part of the bars
represent the percentage and total number of
poor people (Indigent plus poor but not indigent).
8
This reduction is due to economic growth and
better income distribution
Source Economic Commission for Latin America and
the Caribbean (ECLAC), based on special
tabulations from the household surveys of the
respective countries. a/ Guatemala (in extreme
poverty) and the Dominican Republic are excluded
because the results of the disaggregation are not
significant. b/Urban areas.
9
Political and Economic Situation
Region in search of self-sufficiency and
self-determination
Health at the center of the political agenda
How to reconcile equity and stability
Crisis in traditional political parties
Relevance of human rights approach
Binational/Border conflicts, but no war
Heightened violence and insecurity
Demographic bonus investment in youth
10
Political and Economic Situation
Lower economic growth but a better prepared
Region

• Improved fiscal situation, better balance of
  trade (surplus), lower external debt, and higher
  international reserves

• Years of prudent policies have given us greater
  room to maneuver to deal with the financial
  crisis

ECLAC, IDB, IMF, and World Bank agree about

• Significant growth in 2008 (estimates range from
  3 to 4.5)

• Lower growth in 2009 (estimate 2)

• But persisting lower economic growth than other
  regions of the world

• Inequity remains unchanged and it is more
  concentrated

11
Substantially lower economic growth
12
In 2009 a sharp deceleration in regional growth
is expected
LATIN AMERICA AND THE CARIBBEAN RATES OF
VARIATION IN GROSS DOMESTIC PRODUCT 2009 (In
percentages)
Latin America and Caribbean
20 MILLION PER POINT OF DECLINE?
13
Political and Economic Situation
Significant impact, especially in the social
sector

• Tight fiscal situation with pressures on social
  investment

• Higher unemployment, informal employment, and
  unpaid family employment

• Shrinking remittances affecting both the families
  that receive them and the local economy

• Increase in poverty - approximately 15 million
  people, due to a combination of lower economic
  growth and higher energy and food prices

14
LATIN AMERICA(18countries) UNEMPLOYMENT RATEin
the over-15 population, urban areas, by income
deciles.2002-2006
Unemployment Rate
15
DROP IN REMITTANCES
LATIN AMERICA AND THE CARIBBEAN CURRENT
TRANSFERS (CREDIT), 2007 As a percentage of GDP
and in millions dollars
57 cover health expenditures?
16
Political and Economic Situation
Impact varies by subregion and country

• Mexico and Central America more affected

• South America less affected (ECLAC estimates
  growth for 2009 around 2)

• Countries net fossil fuel and food importers
  (some Caribbean and Central America) very
  affected by price variations

• Countries net fossil fuel and food exporters see
  fiscal revenues impacted by price variations.
  (soybean prices decline of almost 50 in recent
  months mining products and fossil fuels)

17
Private health expenditure - direct out of
pocket (remains the most important component of
national health expenditure) Central Government
Health Expenditure-includes Ministry of Health
expenditure (it is less than one-quarter of
total National Health Expenditure)
Changes in the composition of national health
care expenditure over time. Latin America and
the Caribbean, 1990-2005.
Source Pan American Health Organization.
Health Systems Strengthening Area. National
health expenditure database.
18

• Public health investment in the Latin American
  and Caribbean countries is much lower than in
  other countries and regions of the world, with
  the exception of Africa

Source See HINTZ, Jorge - Latin America the
world region with worse poverty-inequality
relation. Virtual Library TOP
www.top.org.ar/publicac.htm
19
Health expenditure has the greatest
redistributive impact (But the redistributive
impact of public expenditure does not always
benefit the poorest sectors of society)
Quintile I - Poorest
20
A great deal can be done to cushion the impact of
the financial crisis

• Solidarity in times of crisis safeguard progress
  through commitments
• among donor governments and the countries that
  require their support maintain promised levels
  of development assistance
• among governments and their citizens promote an
  ethical dimension in public policy, and, in
  particular, the maintenance of essential social
  and health services and
• among citizens share risks and responsibilities
  as the foundation for strong health systems.

21
Protect health expenditure
Protect the health expenditure
22
Social protection nets to support the poor will
be a priority

• IMPORTANCE OF SOCIAL PROTECTION
• Expanding income support programs can be more
  effective and with FASTER impact than creating
  new ones.
• Income protection i.e. temporary employment
  programs with a social impact, such as
  construction of schools and clinics, water and
  sanitation, waste disposal.
• Focalizing is critical for guaranteeing that
  expenditure through programs reaches those who
  need it.
• Conditioned transfers and more rapidly without
  conditions, given to women, there is data that
  show that they will be used in healthy choices.
• Policy coordination from several sectors
  stabilize prices, cut food prices, reduce out of
  pocket expenditures, transportation vouchers,
  support health insurance payments, and keep
  children in school.

23
Social public expenditure has a major influence
on the well-being of the poorest in society
LATIN AMERICA REDISTRIBUTIVE IMPACT OF SOCIAL
PUBLIC EXPENDITURE BY PRIMARY INCOME QUINTILES
(Percentages)
Source ECLAC, based on national studies. a/18
countries. Average weighted by the significance
of spending in the primary income of each
country.
24
A five-point framework for action

• Public expenditure for the poor, with a positive
  health impact

2. Leadership 3. Monitoring and analysis 4.
New ways of doing business in international
health 5. Health Sector Policy(Health systems
reforms based on Primary Health Care and Health
in all policies)
25
A five-point framework for action
A five-point framework for action
1. Public expenditure for the poor, with a
positive health impact
General agreement about
counter-cyclical public spending as a means to
reactivate economyKey role in the push needed
by many low income countries, since they have no
capacity or fiscal space to finance these
measures themselves. The challenge is to
guarantee that the spending will really favor the
poor and have a positive impact on health .
26
A five-point framework for action
A five-point framework for action
1. Public expenditure for the poor, with a
positive health impact
27
Public expenditure is procyclical. The
challenge today is that it be countercyclical
Latin America and the Caribbean (21 countries)
ANNUAL VARIATION IN TOTAL SOCIAL EXPENDITURE
AND GDP
Source ECLAC, Social expenditure and national
accounts database. a/Weighted average of the
countries. b/Provisional data.
28
Achieve Good Health Outcomes for ALL
PRIMARY HEALTH CARE



TACKLE DETERMINANTS
AND STRENGTHEN HEALTH SYSTEMS

• Political Action Framework
• Convergence and harmonization of institutional
  agendas at different levels of intervention
• Cross-cutting issues to articulate health systems
  and health determinants

29
Millennium Declaration
Political Action Framework
189 countries committed to the MDGs
1st Global Meeting on HD, Chile
Declaration of Mexico on Health Promotion
Strategic Plan 2008- 2012
Bangkok Charter for Health
PHC Declaration of Montevideo
HEALTH AGENDA FOR THE AMERICAS 2008- 2017
2000 2001
2002 2003 2004
2005 2006
2007 // 2008
Reg. Goals for HR 2007-2015 (CD 47.R19)
PH, health res.,
prod. of essential medicines and Access
(CD47.R7)
30
Convergence and Articulation of Institutional
Agendas
LEVELS OF INTERVENTION
ART I CULATION OF AGENDAS
U N
Network of Collaborating Centers


TCC -cooperation
among Countries
Global Work Program
GLOBAL
W H O
REGIONAL
SUBREGIONAL TRANSNATIONAL
People, Families, and Communities
Health Agenda for the Americas






CCS - Country-/focused
Cooperation
PARTNERSHIPS
Resolutions
NATIONAL
MDG HFA
P A H O
SUBNATIONAL
Strategic Plan
MUNICIPAL COMMUNITY
Other Cooperation and Financing Agencies
Decentralized technical cooperation
31
Potential impact of the international crisis on
the priorities of the Health Agenda for the
Americas (HAA) 2008-2017 and Strategic
Objectives of the Regional Strategic Plan (SP)
2008-2012

• Context
• From 2007 to January 2009 the LAC commodities
  index fell 60
• Demand for Latin American exports falling
• the terms of trade are also deteriorating
• Access to external financing becoming
  increasingly difficult
• Climate of uncertainty undermining the labor
  market and negatively affecting consumption and
  investment
• Response of the countries in LAC has been uneven
• Broad array of policies being implemented in each
  country in LAC (which is related to country
  ability to finance these policies and establish
  the institutional framework)

32
Priorities of the Health Agenda for the Americas
(HAA) 2008-2017 and Strategic Objectives of the
Regional Strategic Plan (SP) 2008-2012
Two basic scenarios for the HAA and the SP

• Business as usual approach (most likely
  expenditures in the social sector and
  particularly in health are likely to decrease) 
• This will have a major effect on the countries
  ability to deliver their contribution to the HAA
  and achieve MDGs. 
• The SP is currently funded at about 50 by
  voluntary contributions, the most important
  partners being the US, Spain, and Canada. Current
  expenditures still based on previous year's
  budgets, but in future years may be reduced.

33
Priorities of the Health Agenda for the Americas
(HAA) 2008-2017 and Strategic Objectives of the
Regional Strategic Plan (SP) 2008-2012
Two basic scenarios for the HAA and the SP

• Alternative scenario
• (take advantage of the crisis fostering higher
  investment in health, or at least protect
  current status)
• Considerations
• Health is labor intensive, considered a critical
  component for successful fiscal interventions
• Given the likely high unemployment impact of
  economic downturns, there will be a need to
  reduce social impact. Health always a very
  powerful tool
• Long-term effect of decreasing health investments
  will be much more expensive to correct, plus the
  obvious ethical impact.

34
HEALTH FOR ALL
LINKAGE BETWEEN SYSTEMS AND DETERMINANTS
Healthy Public Policies
Emphasis on Equity
PHC-based Health Systems
Health Determinants
Intersectoral Approach
LEADERSHIP
SOCIOECONOMIC

• Health Promotion and Participation

POLITICAL
FINANCING AND INSURANCE
Social Protection
ENVIRONMENTAL
CULTURAL AND LIFESTYLE
Human Rights
SERVICE DELIVERY
Gender, Ethnicity and Intercultural
BIOLOGY HEREDITY
HUMAN RESOURCES
MDGs
RESULTS-BASED MANAGEMENT
35
Health Determinants
PHC-based Health Systems
LINKAGE OF SYSTEMS AND DETERMINANTS
Healthy Public Policies
Develop integrated public policies among
multiple sectors, Health in all policies
36
Health Determinants
PHC-based Health Systems
LINKAGE OF SYSTEMS AND DETERMINANTS
Healthy Public Policies
Emphasis on Equity
Prioritize equity in health within developmental
policies, plans and programs
37
Health Determinants
PHC-based Health Systems
LINKAGE OF SYSTEMS AND DETERMINANTS
Healthy Public Policies
Emphasis on Equity
Intersectoral Approach
Strengthen health sector leadership to manage
intersectoral processes
38
Health Determinants
PHC-based Health Systems
LINKAGE OF SYSTEMS AND DETERMINANTS
Healthy Public Policies
Emphasis on Equity
Intersectoral Approach

• Health Promotion and Participation

Make health promotion a core in Government and
Civil society action
39
Health Determinants
PHC-based Health Systems
LINKAGE OF SYSTEMS AND DETERMINANTS
Healthy Public Policies
Emphasis on Equity
Intersectoral Approach
Health Promotion and Participation
Social Protection
Introduce universal approaches and mechanisms
for social protection in health
40
Health Determinants
PHC-based Health Systems
LINKAGE OF SYSTEMS AND DETERMINANTS
Healthy Public Policies
Emphasis on Equity
Intersectoral Approach

• Health Promotion and Participation

Social Protection
Human Rights

Make enjoyment of the
highest attainable level of health a reality for
all
41
Health Determinants
PHC-based Health Systems
LINKAGE OF SYSTEMS AND DETERMINANTS
Healthy Public Policies
Emphasis on Equity
Intersectoral Approach

• Health Promotion and Participation

Social Protection
Human Rights
Gender, Ethnicity and Intercultural
Mainstream the gender, ethnic, and intercultural
approach in all interventions
42
Convergence of thought and action
Eliminate and eradicate diseases that affect
neglected populations, encouraging a local
development approach and citizenship-/building
Strengthen health systems based on primary care
and build a workforce capable of meeting the
challenges of the MDGs
Move from the risk approach to the construction
of health and quality of life gear action to
social, political and environmental determinants
Guarantee the benefits of science and technology,
closing equity gaps
Global health security and the application of new
rules for relations between countries Synergies
and maximum results through partnerships for
health for all and with all
43
Convergence of thought and action
Timely, complete, and shared health surveillance
Immunization as a regional public resource,
maintaining equity and universal coverage
Middle-income countries positioned in the
global health scenario
Access to timely, quality health goods and
services without exclusion
Access to reliable, validated, evidence-based
health information
44
Mandates for the period 2008-2012
Country Cooperation Strategies (CCS)
PASB Program budget 2008-2009 (and 2010- 2011,
and 2012-2013)
General Program of Work of WHO 2006-2015 (Global
Agenda)
Subregional health agendas
PASB Strategic Plan 2008- 2012
Health Agenda for the Americas 2008-2017
45
Public Health Policies toward HEALTH FOR ALL
HEALTH FOR ALL
MILLENNIUM DEVELOPMENT GOALS
Primary Health Care
Social Protection
HealthPromotion

Information and Knowledge
Human Rights