PHA-Exch> Savage arithmetic or tame neoliberal analyses ?

[Claudio Schuftan]

From: Alison Katz katz.alison at gmail.com

 The "savage arithmetic" (see Ted Schrecker's message of 22 November) is
that presented in the Report of the Commission on Macroeconomics and Health
(known as the Sachs Report). It is based on an astonishingly superficial
grasp of the international economic and political order. Many of us will be
dismayed if WHO's Commission on Social Determinants has in any way been
inspired by such  "arithmetic ".

The main recommendation of the Sachs report is to "to scale up access of the
world's poor to essential health services including a focus on specific
interventions". The plan is predicated on "donor financing which creates the
financial reality for a greatly scaled up, more effective health system."  *19
of the world's most eminent economists under Sachs' leadership suggest that
there is no means of distributing income and assets between countries other
than through international aid.  *

The Sachs report encourages medico-technical solutions to public health
problems; it ignores macroeconomic determinants and other root causes of
both poor health and poverty; it reverses public health logic and history;
it is based on a set of flawed assumptions; it reflects one particular
economic perspective to the exclusion of all others; and it recommends
greater amounts of charity while preserving the status quo of a deeply
unjust and irrational, international economic order.*

**

The essential question in the area of macroeconomics and health that
requires an answer is this: Should development efforts aim for millions
through "charity" or billions and trillions through a fair international
order (*recognising health and the conditions for health as human rights)?*

There is a striking disproportion between the sums that could reasonably be
raised through international "aid" – usually not exceeding millions - and
the sums that would be released through simply macroeconomic measures –
billions and trillions.

The Sachs report estimates US$ 360 billion in economic gains per year
between 2015-2020, if donors contributed US$ 27 billion each year until 2015
(and thereon, US$ 37 billion per year) towards a set of basic medical
interventions.

To assess the value of this approach, this US$ 360 billion (gain) must be
balanced against the sums that are currently lost to poor countries every
year in grossly unjust South to North international transfers and that
conversely, would be released to poor countries, if macroeconomic reforms
were implemented and a new international economic order (NIEO) established.
These international transfers (South to North) include debt, unfair terms of
trade and Northern protectionism, tax havens and capital flight, free trade
zones, SAPs and PRSPs, foreign direct investment, intellectual property and
TRIPS, the brain drain, aid itself and a practice which is enjoying renewed
popularity in Anglosaxon circles, invasion of sovereign states for the
forcible appropriation of resources.

Estimates of losses vary but here are a few:

Unfair trade, 700 billion

Illegal, immoral, impossible debt : 382 billion

Tax havens and capital flight: 160 billion

Foreign direct investment: (see Argentina on how a rich country's assets can
be bought out (gutted) by foreigners through FDI)

Foreign aid: on average brings one and half times more to the donor country
than was "donated"  to the beneficiary country, but with debt repayment,
locks the poor country into further long term exploitation.

Financial flows: 1.5 trillion daily, untaxed. If taxed would bring 250
billion annually.*

Now, given a choice between 27 (or 37) billion in international aid per year
or 700 + 382 + 160 + 250 + billion per year released through macroeconomic
reform for use by populations in developing countries, with sovereign states
providing for their people's needs without foreign interference, (and basing
myself on savage arithmetic), I know which one I would choose.

There will always be a need for genuine international aid, on a very small
scale, as there always is for genuine charitable action, but only when it
does not form part of an exploitative structure (not imminent).

I recommend (again) as essential reading on the inherent and current fatal
flaws of international aid, Thomas Sogge., *Give and Take. What is the
matter with international aid. *Zed Books, 2002.

In answer to the throw away comment about "aid is one dimension of the
obligations of the international community, if there is such a thing)",
there is indeed and it is enshrined in human rights covenants and their
general comments, see for example the Right to Development.

Alison Katz

*Katz, Alison. The Sachs Report: *Investing in Health for Economic
Development – or increasing the size of the crumbs from the rich man's
table?* International Journal of Health Services, Vol 34 (4) 2004
p.751-773and Vol 35 (1) 2005
p.171-188.
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://phm.phmovement.org/pipermail/phm-exchange-phmovement.org/attachments/20071122/f181b1dc/attachment-0001.html>