Global Effects of Economy of Health-Care

Global Effects of Economy of Health-Care

Question #2

While looking at the effects of the global economy on world health-care, we must first explore some of the key terms dealing with this issue. Neo-Liberalist policies are a key determinant in global health care. These policies are a type of economic philosophy adopted by industrialized, developed nations such as the United States. The key to Neo-Liberalist policies is that much of the negatives that come from the advances in the global economy far outweigh the positives. Free trade and capitalism are the two driving forces behind what is known as the “Neo-Liberalist Machine” (class notes). The average person may ask why the spread of large, multinational companies, in order to globalize the economy, is harmful. They might wonder what the downside to capitalism and free trade are. I will attempt to clarify such issues in the following discussion of these topics.

i. Discuss general Neo-Liberalist/Washington Consensus policies and in general what they require and provide for “developing” countries as well as what they require and provide for “developed” countries.

In looking at the Neo-Liberalist/Washington Consensus perspective, the idea is based on the “trickle down” effect which the economy has when it allows businesses and the markets to thrive. As business thrives it allows the middle class higher wages which trickles down to the lower class and ultimately brings everyone’s standard of living up. As we cut into the topic though, we find some fundamental difficulties that expose glaring weaknesses in this philosophy.

In theory, globalization provides developing countries a chance to “right the economic ship” by creating jobs and businesses which stabilize the economy of the developing countries. What does the developing nation require from these businesses? The nations need capital and infrastructure which they may not otherwise afford. Large companies provide jobs and financial backing which developing nation’s governments cannot provide. As we can see in the following examples, there are too many flaws in this system which initiates many injustices to the inhabitants of these struggling nations. Before we take a look at the effects of globalization on health-care in these countries we will examine the effects on the economy. Robert Pollin summarizes the neoliberal record. “Excluding the Peoples Republic of China, which did not follow the neoliberal lead, the era of the "developmental state" (1961-80) saw a per capita growth rate of real GDP that averaged 3.2 percent per year. On the other hand, during the neoliberal era (1981-99) this growth rate fell to 0.7 percent per year, slowing both absolutely and relative to the wealthier countries of the OECD China, which shifted from pure state planning to state-guided export promotion, saw its per capita growth rate rise from 2.5 to 8.4 percent between these periods”(See Robert Pollin, Contours of Descent, p. 131). This example shows the descent of the growth rate during the Neo-Liberal years. These large companies that originate in the developed nations often strip the developing nations of sought after resources which are irreplacable. In a sense, they are raping them of any

usable natural resources in order to supply a small group of elites in other countries, meanwhile depriving the developing nations of future sources of sustainance which could last generations if otherwise untouched. The pro Neo-Liberal may say that it is creating jobs and infrastructure that didn’t already exist but the opponent would show you that the type of jobs created are of far less quality and pay than that of the developed nations. For example, in a recent trip to Mexico, I observed the environment and economic conditions of the country as seen through an outsider’s eyes. Yes jobs were created by auto makers and many other manufacturing companies but were they improving the economy of the nation or robbing them of resources and cheap labor? The reason why these jobs do not create a vast improvement for the nations economy is because they do not signifcantly increase the average salary for these workers. The jobs brought in thousands of workers and those looking for work creating a slum city which fostered poor living conditions, disease and an overall desperate situation. The locals described the situation of the city before this group of manufacturing facilities moved in. It was a clean spacious and liveable city with a low crime. Since the facilities arrived it has been nothing but the opposite.

ii. How effective is current neo-liberalist policies in addressing issues of health-care in developing countries?

In the developing countries, the economic base in which