issues in global trade and finance

a study of the global nature of our economy and the effects of the global economy

Monday, February 28, 2005

Essential Action

The article entitled Essential! Action focuses on health care being provided in Third World countries and the prevention of HIV/AIDS. Third World countries that are in debt has a significant impact on whether or not these countries will be able to provide their citizens with the proper health care. This article talks about the two destructive ways this debt can afect health care and HIV/AIDS prevention. The first reason is believed to be that the more debt that the government owes from foreign trade interactions the more cutbacks that have to occur in health care facilities and programs that were designed to help educate and prevent the spread of HIV/AIDS. I feel that there should be some other way to allow the countries that owe debts to pay off their debts without competely cutting out funding. The earnings that are made from the exporting of various services to other countries goes towards lowering the debt that has accumulated. Without the ability to use this money that is being made pharmaceuticals, equipment and products that are detrimental to HIV/AIDS prevention and treatment cannot be imported. Structural adjustment policies only add to these already unsolved problems. The International Monetary Fund and World Bank are required to acknowledge programs that fall within structural adjustment in order for them to continue receiving loans. These programs are ones that seem to contain signs of self denial from these organizations. Their key proposals were to make institutions and services that were funded by the government private, cutting back on government spending, instructing economies to promote free export trade, raising interest rates, eliminating subsidies on food, fuel, and medicines that are considered consumer items and raising taxes. There are many different opinions as to why funding for health care and education have been cut. The IMF and World Bank firmly stand behind their claim that structural adjustment programs implemented call for anything that is considered a social service to be removed from mandated budget cuts. These programs have only contributed further to the "gaps" in economic growth. Unequal distributions in income and wealth continue to grow further apart. This results in poverty becoming worse off that before. Charging people for health care deters many from going to see doctors when sick. There are various schemes that the IMF and World Bank encourage in their programs. One of these is the user fee scheme which promotes user fees that people have to pay to have access to health care. Njoki Njoroge Njehu a Kenya native, director of the 50 Years is Enough campaign, says from personal experience that structural adjustment has only magnified problems that were somewhat present but not as great as before the implementing of these programs. The ratio of doctors to hospital beds has only increased as the percentage of low birth weight babies has also increased due to structural adjustment programs. Dr. Peter Lurie states in the journal,AIDS, that HIV/AIDS epidemics are increasing because structural adjustment programs leave men no other choice but to migrate to big cities or mines to find work to support their families. In doing so the men engage in sexual acts with casual partners or sex workers and in turn contract HIV/AIDS bringing it home to their spouses and spreading the disease. Women and children migrating to the big cities inreases the number of prostitutes therefore increasing HIV/AIDS rates. Loss of proper health care leads to procedures that are generally used for screening blood used for transfusions being limited, testing for HIV not being offered and people being more likely to reuse disposal syringes repeatedly. There are three solutions that have been proposed to help eliminate these problems: 1. Countries that are considered among the poorest must have their debts eliminated 2. Scrapping the structural adjustment package, allowing countries the ability to seek programs that are designed to focus on strengthing the local economy and sustaining the governments role in providing health care and other need based programs 3.The World Bank and the International Monetary Fund must delete their ideas to make health care facilities private and charge individuals for services provided to them. The countries that are owed increasely high debts by poor countries should be able to work something out with the IMF, World Bank and the country (debtor) that would be of benefit to all parties involved. How can the International Monetary Fund state that they were created to promote the health of the world economy, balance the expansion of world trade and stabilize exchange rates, avoid competitive devaluations and correct the balance of payment problems when at the same time they emloy various schemes to get money out of the very citizens who cannot afford it. It seems to me that the IMF and World Bank have lost the initial vision that these two organizations were founded on. You have people in countries living below poverty but you expect them to be able to pay for health care services and become educated on HIV/AIDS prevention. I don't see how this would be be possible. You can't have the best of both worlds when it seems that money is the only concern here. Whenever money is involved there are bound to be problems because you are always going to have people who are not going to manage it in the best interest of everyone. I do not agree with the claim that the IMF and World Bank are cutting funding for social services due to requirements for their structural adjustment program implementation. I think that it is because they want to use these funds to help fund their various programs and make a profit off of them.

2 Comments:

  • At 6:15 PM, songbird said…

    I know how you feel on this issue because I have always wondered why these countries that are wealthy beyond imagination cannot provide enough help for these that are in desporate need. I agree with your proposals on what the IMF and World Bank should do in order for this to happen. Especailly the one that calls for them to cut their own budget for their programs. Me feeling is that too many officals look at some of these countries and say, "well your going to die anyway so why waste our time." If they get rid of this "stinkin' thinkin'" then maybe this world would turn out better.

     
  • At 12:01 PM, Sean said…

    These countries have borrowed from other countries and then find themselves unable to repay the loans. This causes financial problems for both the borrower and lender. Because the lender is often more wealthy, we do not see their loss of wealth.

    "Unequal distributions in income and wealth continue to grow further apart. This results in poverty becoming worse off that before."

    Too much income inequality can cause major problems.

    The first statement does not always lead to the second. Assume prices are constant: If person A is rich and initially makes $100k and the second is not and makes $20k per year, initially there is a $80k per year difference.

    Assume that the rich person's income increases by 50% to 150k and the poor persons only increases by 20%, resulting in an income 22k. The income difference is now 123k. So the income difference is greater.

    However, is the poor person better or worse off? They may be worse of relative to the rich person, but they are abosolutley better off with 22k than with 20k. This did not lead to the poorer person falling into poverty.

     

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