Global recession is likely to damage our health as well as our wealth, but it also offers an opportunity to build a more equitable economic model.
by Sir Michael Marmot Director of the International Institute for Society and Health and Chair of the WHO Commission on Social Determinants of Health and Dr Ruth Bell senior research fellow, Department of Epidemiology and Public Health, University College London
This article was published in the British Medical Jounal (BMJ), 11 April 2009, Volume 338, and it is reproduced with permission from the BMJ Publishing Group.
|photo: WHO/Togrim Halvari|
The financial crisis intrudes daily from the newspapers. The breakfast table is littered with quantitative easing and credit-default swaps, stimulus packages, and bank bailouts. But is there a link between the financial crisis dominating the front page and the health stories on the inside? The Commission on Social Determinants of Health certainly believed so. Its starting point was that the economic and social features of society are closely linked to the distribution of health within and between countries.1 The social determinants of health are the circumstances of daily life — the conditions in which people are born, grow, live, work, and age—and the structural drivers of those conditions (unfair distribution of power, money, and resources). Both the conditions of daily life and the structural drivers will be influenced by the financial crisis.
Will there be no money?
We cannot improve the living conditions of people who are disadvantaged without money. Globally, nearly 1 billion people live in slums.1 In the Indian city Ahmedabad, it cost $500 (£350; €380) a household to make minimal improvements for people living in slums.2 Scaling up, it would cost $100bn to upgrade the world’s slums.1 A few months ago we wondered who would find such an outlandish figure for anything? But more than $5 trillion has been found to bail out the financial sector in rich countries. Clearly there is money for investments judged to be important.
The crisis started in the high income countries but has not stopped there. Five billion people in low and middle income countries are at risk. Nancy Birdsall, president of the Center for Global Development, estimates that developing countries will need $1 trillion over the next couple of years to pay for bank rescues, fiscal stimuli, and to maintain minimal social safety nets.3 The financial crisis can be taken as giving no options other than to cut back on all spending.
President Obama, acting in the tradition of John Maynard Keynes and Franklin Delano Roosevelt, has taken the opposite view. It is time to provide liquidity and to stimulate the economy. But not just that. The economy can be stimulated by investing in measures that improve quality of life.
The financial crisis is hitting the real economy with great force.4 Will that matter for health? It might. In the English Longitudinal Study of Ageing wealth, apart from income, was a potent predictor of ill health.5 How much this association between wealth and health has to do with absolute levels of economic
wellbeing and how much to relative position is debatable. If it is relative position, there will be winners and losers with consequent effect on health; if it is absolute level, people close to the poverty margin are likely to suffer most.
The effects on health of an economic downturn can be rapid. In South Korea during the Asian monetary crisis of the late 1990s there was a sharp rise in suicide, although overall mortality continued to decline.6 In Russia, after the collapse of the Soviet Union, life expectancy fell steeply, and it fell again with the rouble crisis of 1998.
|photo: WHO/Togrim Halvari|
Unemployment, job insecurity, and the lack of a living wage all have an important effect on health.1 The International Labour Organisation
predicts that the global unemployment rate will rise from 5.7% in 2007 to somewhere between 6.1% and 7.1% in 2009.7 This corresponds to an increase in the numbers of unemployed by between 18 million and 51 million people.6 Studies on unemployment and mortality in Britain in the1970s and 1980s showed that unemployed people had a mortality rate 20% to 25% higher than average for people of the equivalent socioeconomic group. 8 9
In rich countries unemployed people are protected from absolute deprivation by social safety nets. Not so in developing countries. No work means starvation and destitution. People scrabble for any work no matter how appalling the working conditions or how low the remuneration. The economic crisis will therefore show up not only in a rise in unemployment but also in the numbers of working poor and vulnerable workers (self employed or unpaid contributing family workers). The estimates again vary depending on the degree of pessimism about future projections of the economic downturn. Taking the new World Bank definition of extreme poverty as $1.25 a day, globally the number of working poor is set to rise to between 700 and 800 million workers, an increase of 200 million workers
The economic downturn means that, increasingly, work will not be the route out of extreme poverty and consequent ill health. The losses in cognitive, emotional, and physical development for children growing up in extreme poverty and the consequent effects on health and wellbeing across the lifecourse are potentially enormous.10 11
The proportion of people globally in vulnerable employment has been falling. The economic crisis is likely to reverse this decline, with more than half of workers predicted to be in vulnerable employment in 2009.7 These vulnerable workers are more likely to lose employment and be left in poverty than other workers. The mere presence of job insecurity worsens health in addition to the effects of unemployment.12
External events have greatest effect on those who are most disadvantaged. Whether war and conflict, a tsunami, heat waves in Europe, or the general impact of climate change, the degree of effect seems to be related to people’s socioeconomic position. In Britain, in the early 1980s mass unemployment affected manual workers more than those with more education in white collar jobs. It seems likely to be the same this time. It is not difficult to predict whether the former banker or the former Woolworths employee will find it hardest to meet basic needs. Globally, the effects are even more plain. It is workers in low and middle income countries whose lives are likely to be most affected by the economic downturn. What can we do?
New global model
Apologists for the global economic order in place since the 1980s pointed to global economic growth, the fall in the global poverty head count (mainly made up of a fall in China), and rapid economic growth in China, India, and many middle income countries. It was assumed that markets need to be set free, and their beneficial effects would trickle down to the most vulnerable. Critics pointed to the shortcomings in this model. Globalisation has its discontents but can be made to work if operated differently from the model that puts unregulated markets, privatisation, and less public action at the centre.13 14
Markets, though crucial, need to be regulated, and their failure to deliver global public goods and protect the environment must be addressed.1 We cannot afford to go back to the situation we were in before the crisis. There are three interconnected problems that need solutions: growing inequalities within many countries, global inequities in social conditions and health, and the urgent problem of climate change and environmental degradation.
A model predicated on global economic growth with consequent rise in greenhouse gases and the obscene income inequalities we have seen within and between countries cannot be justified on moral grounds. Given the current state of affairs, globally, it cannot be justified on pragmatic grounds. It is time for a new plan that has equity at its heart.
Take trade. The way global trade arrangements have been organised has adversely affected poor and vulnerable people.15 But the global decline in trade has also had disastrous effects on those dependent on trade.7 The solution to the problems of unfairness caused by trading arrangements is not protectionism, with each country going its own way. It is a set of trading arrangements that take all countries’ interests into account — that have health equity impact assessments. As a starting point G20 looks a better bet than G8 as a global forum, but that still leaves more than 170 countries not represented. The financial crisis gives us the opportunity to bring social justice and environmental concerns to bear on the kind of new global economic order that must be put in place.
In its communique, released after the London 2 April meeting, the G20 said that “major failures in the financial sector and in financial regulation and supervision were fundamental causes of the crisis”. This is a direct repudiation of the Washington Consensus foisted on the world in the 1980s and 90s by the rich countries and the International Monetary Fund — deregulation, and liberalisation, as well as privatisation, were at the heart of economic and financial policy. This recanting is welcome.
The G20 leaders say that they start from the belief that the global plan for recovery must have at its heart the needs and jobs of hard working families in emerging markets and the poorest countries. If true, this is a radical break with the past, and would be a step towards the new economic order that is necessary to achieve the fair distribution of power, money, and resources.
1 Commission on Social Determinants of Health. Final report: closing the gap in a generation: health equity through action on the social determinants of health. Geneva: World Health Organization, 2008.
2 WHO Regional Office for South East Asia. Tackling social and economic determinants of health through women’s empowerment: the SEWA case study. New Delhi: WHO Regional Office for South East Asia, 2008.
3 Birdsall N. How to unlock the $1 trillion that developing countries urgently need to cope with the crisis. Washington DC: Center for Global Development, 2009. www.cgdev.org/content/general/detail/1421143.
4 International Monetary Fund. World economic outlook update: global economic slump challenges policies. 2009. www.imf.org/external/pubs/ft/weo/2009/update/01/pdf/0109.pdf.
5. McMunn A, Nazroo J, Breeze E. Inequalities in health at older 5 ages: a longitudinal investigation of the onset of illness and survival effects in England. Age Ageing 2009;38:181-7.
6 Khang Y, Lynch JW, Kaplan GA. Impact of economic crisis 6 on cause-specific mortality in South Korea. Int J Epidemiol 2005;34:1291-301.
7 International Labour Organization. 7 Global employment trends 2009. Geneva: ILO, 2009.
8 Moser K, Goldblatt P, Fox J, Jones D. Unemployment and 8 mortality. In: Goldblatt P, ed. Longitudinal study: mortality and social organisation, England and Wales, 1971 -1981. London: Stationery Office, 1990:81-108.
9 Bethune A. Unemployment and mortality. In: Drever F, 9 Whitehead M, eds. Health inequalities. London: Stationery Office. 1997:156-67.
10 Grantham-McGregor SM, Cheung YB, Cueto S, Glewwe P, 10 Richter L, Strupp B. Development potential in the first 5 years for children in developing countries. Lancet 2007;369:60-70.
11 Early Child Development Knowledge Network of the Commission on Social Determinants of Health. Early child development: a powerful equalizer. Geneva: WHO, 2007.
12 Ferrie JE, Shipley M, Stansfeld S, Marmot MG. Effects of 12 chronic job insecurity and change in job security on self reported health, minor psychiatric morbidity, physiological measures and health related behaviours in British civil servants: the Whitehall II study. J Epidemiol Community Health 2002;56:450-4.
13 Stiglitz JE. 13 Globalization and its discontents. London: Allen Lane, 2002.
14 Stiglitz JE. 14 Making globalisation work. New York: W W Norton, 2006.
15 Globalisation Knowledge Network of the Commission on 15 Social Determinants of Health. Towards health-equitable globalisation: rights, regulation and redistribution. Geneva: WHO, 2007. Cite this as: BMJ 2009;338:b1314
Visitors at the Mapparium in the Mary Baker Eddy Library in Boston, Massachusetts. This was the site to launch Dr. Jean Watson's Million Nurse Project—during the 2010 International Year of the Nurse—to radiate heart-centered Love, Caring and Compassion through individual and collective global meditations. Photo Courtesy of the Mary Baker Eddy Library.