Ben Heine Art and Music Blog: Economy

Global Crisis

Global Recession,
Is it Possible?

“The world economy is now entering a major downturn in the face of the most dangerous shock in mature financial markets since the 1930s,” claims the International Monetary Fund (imf.org).

It appears that the IMF, the European Union, and World Bank have been quite busy bailing out one country or another. The latest $25 billion financing package for Hungary comes on the heels of two other financing packages distributed as emergency loans to Iceland and the Ukraine. These countries are dealing with their own problems of oversees borrowing and rapid credit growth.

The IMF has a $200 billion loanable fund and other resources from which to draw to stem the fallout from the global financial turmoil. The IMF works by parachuting in when a member country faces extenuating circumstances that threaten its financial stability. A rapid response is needed to contain the damage to the country or the international monetary system. Judging by all the money loaned out so far, there’s indication that some countries are either in a recession or tipping into one. In early October, the world’s central banks administered emergency measures, including a round of coordinated interest rate cuts.

If that weren’t enough, the financial turmoil is already beginning to slow growth in some emerging markets, such as China. When emerging and developing economies are feeling the impact of the global financial crisis, it is an indicator of a major slowdown in the global economy. This, coupled with global growth slowing down sharply, all point to a global recession. The following are some of the factors that can cause crises in emerging countries:

- collapse of export prices
- drastic increase in import prices
- anemic foreign investments and capital flows
- large depreciation or devaluation of the currency of a close trading partner. In this case, the U.S.
- sharp increase in interest rates in world markets

>>> Read the full article

The Poorest of the Poor...

(Ben Heine © Cartoons)

Ending Extreme Poverty,
Improving the Human Condition
.
By M. J. Friedrich

Eradicating extreme poverty and hunger is an ambitious goal, to say the least. But this is the aim of the UN (United Nations) Millennium Project, a global plan to meet a set of 8 targets to improve the human condition. These targets, called the Millennium Development Goals (MDGs), include halving, between 1990 and 2015, the proportion of people living on $1 a day.

Economist Jeffrey Sachs, PhD, developed the plan for the UN Millennium Project and served as its director and as Special Advisor to the United Nations Secretary-General, Kofi Annan, from 2002 to 2006. His plan is being studied in several villages in 10 African countries through the UN Millennium Villages Project, which seeks to help people transform their lives through tools and interventions that promote clean water, sanitation and other essential infrastructure, education, food production, basic health care, and environmental sustainability.

Sachs has served as an international economic advisor throughout the world and has helped address the economic, political, environmental, and social challenges of some of the poorest regions, work that he detailed in his bestselling book, The End of Poverty. He is currently the director of Columbia University's Earth Institute, which describes its mission as helping to "achieve sustainable development primarily by expanding the world's understanding of Earth as one integrated system."

In a recent interview with JAMA, Sachs discussed his thoughts on these issues and the progress being made toward eradicating poverty.

JAMA: Those living in extreme poverty are the "poorest of the poor." How many people are believed to be living in this condition?

Dr Sachs: The World Bank technically describes extreme poverty as a person who lives under $1 a day. In my opinion, a better definition is the inability to meet basic needs, such as adequate nutrition, access to safe water, access to basic education, having a livelihood that can generate an income to meet these basic needs, and access to primary health services. By either definition about 1 billion people live in extreme poverty.

This number, determined mainly by household survey, is a pretty rough estimate. It's an area where a major effort could and should be made, but of course this is not the only area where we underinvest in the poor. When the world is capable of leaving millions of people to die for lack of access to the most basic things, it's also capable of not making the effort to measure [their numbers], as well.

JAMA: What are some of the specific challenges that poor countries face in trying to improve conditions, such as providing primary health services?

Dr Sachs: In most of tropical Africa, about 75% of the population lives in villages, in rural areas, as subsistence farmers. These communities typically lack so much that is basic—electricity, running water, nearby clinics, public transport. The basics used for malaria control, such as bed nets, are lacking. There may be 5 doctors per 100 000 people—or no doctors at all.

The challenges in these places are to build a basic health structure almost from scratch. This has to be addressed systematically. This challenge of scaling up basic health services is the core challenge of public health.

JAMA: What steps can be taken to begin scaling up health services?

Dr Sachs: A lot can be done, perhaps surprisingly. First, it's possible to build clinics at very low cost; physical construction is simply not a problem. Getting the drug supplies for the basic medicines—the antibiotics, the antimalarials—is really not a problem if we put our mind to it, and some countries have been able to do a wonderful job in a short period of time.

Often a significant number of nurses and post–secondary-trained clinical officers are available who can do a tremendous amount of things to treat the basic disease conditions, meaning that more doctors aren't required. We can train community health workers—meaning 1 year of training after secondary school—to reach out to households to monitor, to help households get to clinics or local hospitals. This can make a phenomenal difference.

We also now have cell phone coverage, wireless Internet coverage, and the potential for transport to create an emergency response system. This is something I’m trying to promote in the villages in Africa where we're working. We have connectivity and communications that make it possible—even in a very poor setting—to create an emergency response and referral system from a local clinic to a hospital.

If we can bring these powerful technologies to bear they can make a very large difference. It still won't be the comprehensive quality health system one would like, but it can sharply reduce the enormous disease burden.

In addition, there is a mass chemotherapy approach being introduced in a number of countries to treat or prevent tropical parasites such as schistosomiasis. Drug companies are ready to partner with the poorest countries to bring down the burden of these parasites.

JAMA: Can you describe 1 or 2 examples of successes in which a region adopted a program to improve health?

Dr Sachs: In low-income settings, a great deal of the disease burden results from a small number of conditions—infection, undernourishment, and unsafe childbirth—for both the mother and the neonate. Countries that have introduced primary health care to address these 3 main categories of disease burden have been able to do very well.

Campaigns of immunization, control of vector-borne diseases like malaria, fluoridation, iodinization of salt, vitamin A, deworming, and school feeding programs are all examples of basic interventions that can be applied on a population scale that can dramatically reduce the burden of disease.

Throughout the Americas there have been big successes. These countries are not utterly impoverished and the government has been able to afford to introduce basic primary health care. The results are astounding. The mortality rates of children under the age of 5 years can come down from 150 or 200 deaths per 1000 to 20 to 30 in a relatively short period of time.

Successes have been widespread in Asia and Latin America and other parts of the developing world, with the really crucial exception being sub-Saharan Africa and war-torn places like Afghanistan and Iraq, which stand out as having absolutely horrendous rates of mortality still—not only because of the violence, but because of the complete breakdown of public health systems.

JAMA: Can you provide an example of a failed health program that taught an important lesson—one that didn't take off but that you learned something from?

Dr Sachs: There are a couple different kinds of lessons. One is that rising incomes don't necessarily address health conditions. Simply being aware of the problem isn't enough. What is needed are specific targeted interventions, clinics and hospitals. So many lower-middle–income countries such as those in Central America that have public health systems still have high maternal mortality rates because the system hasn't made the effort to improve the safety of birth.

Another kind of failure is that of rich countries that fail to recognize what can be done to save lives and improve health conditions among the poor. The most glaring failure is malaria, with about half a billion clinical cases and between 1 million and 3 million deaths each year.

Malaria is largely preventable by simple technologies such as insecticide-treated bed nets and treatable by appropriate first-line medicines. Yet in many cases, the medicines don't get to the children in time and they die. The US championed what's called social marketing of bed nets, meaning that the bed nets are sold at discounted prices. Although only a dollar or two, many people simply can't afford this.

This is perhaps the most dramatic example of where we’ve failed miserably to act with some basic decency to address the problem. It's a shocking part of modern neglect that I hope is coming to an end.

JAMA: How do you evaluate and measure the success of programs in the face of variables such as unexpected political, environmental, and medical events?

Dr Sachs: Often evaluation and data collection and feedback are simply not built appropriately into these systems. And yet with the advent of the Internet and cell phones and computer servers that can automatically register public health information from community health workers, we should be able to do a much better job of monitoring disease surveillance and evaluation of programs.

In our own work in Millennium Villages, we weren't collecting much of the critical information needed to ensure properly functioning health care—we were building clinics and getting training going and so forth. But now we're getting reliable vital statistics information month by month and will pursue that in much greater detail.

The information systems we have can be used not only to evaluate the programs but to help the health system to function. These technologies are going to prove to be incredibly powerful in this area and in many other areas of development.

JAMA: Money is a big issue. You’ve talked about a global compact between rich and poor countries—the responsibility of rich countries to contribute monetary assistance and the responsibility of poor countries to be ready for change. Can you comment on this?

Dr Sachs: Many countries already have clear, ambitious programs for development. Most of these countries, however, are too poor to finance the investments on their own.

This financial gap is where we come in. Malawi, for example, can maybe spend $8 to $10 per capita on its health system. But it's not going to reach the $40 to $50 needed for an even rudimentary system. Malawi will get out of poverty over time, but not all at once and not if these disease burdens remain as high as they are.

I don't accept that we don't have the money to do it. We can decide to allocate a tenth of 1% of our income to make it possible to save millions of lives every year—and I believe firmly that we should be doing that for our own well-being as well as for the lives that we save.

JAMA: You believe that extreme poverty can be eradicated by 2025. How do you respond to critics who say you're too optimistic?

Dr Sachs: The first thing I say is stop criticizing and come up with solutions.

The tools for change are very powerful. We just have to decide to use them against these problems that deserve our attention.

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--> This interview appeared on jama.ama-assn.org
.