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Global Economic Crisis and the Health of the Region Closing Gaps Protecting achievements Facing new challenges Dr. Mirta Roses Periago Director Ottawa, Canada. Official Visit March 30 th – April 3 rd , 2009 Global Economic Crisis

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slide1

Global Economic Crisis and the Health of the Region

Closing GapsProtecting achievements Facing new challenges

Dr. Mirta Roses Periago

Director

Ottawa, Canada. Official Visit

March 30th – April 3rd, 2009

slide2

Global Economic Crisis

  • The three Fs: “fuel, food, and finances”--financial crisis, fuel and food prices, plus combined and mutually reinforcing environmental threats
  • Global recession; Spillover from developed economies into emerging economies
  • Consequences in terms of poverty, malnutrition, and impact on the most vulnerable groups
  • Risk of becoming a social and political crisis
  • Cutbacks in domestic investment and international development assistance
  • Threat to the real, not simply statistical, achievement of the MDGs
slide3

Global Economic Crisis

THEREFORE….

  • Avoid errors of previous structural adjustment programs, leading to disinvestment in the social sectors and reduction of the regulatory capacity of the State
  • Call to maintain and increase investment in health/social sector and labor intensive programs in times of crisis
  • Generate and strengthen protective/safety nets for poor and vulnerable groups and avoid more middle income groups to fall back into poverty
  • Significant repercussions on global health and the work of PAHO/WHO
a different crisis all countries will be affected but to a different degree
A DIFFERENT CRISISAll countries will be affected, but to a different degree

GDP GROWTH IN THE DEVELOPED ECONOMIES

In annual variation rates

the private sector is the most exposed
The private sector is the most exposed

7.9%

Peru

-1.3%

1.2%

Mexico

-1.4%

1.0%

Colombia

2.5%

9.0%

Chile

2.0%

4.3%

Brazil

-1.5%

3.8%

Argentina

2.0%

-3%

-2%

-1%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

External public debt

External private debt

LATIN AMERICA AND THE CARIBBEAN (SELECTED COUNTRIES): VARIATION IN THE FOREIGN DEBT, 2006-JUNE 2008

(As a percentage of GDP)

in 2008 the region completed six consecutive years of growth
In 2008 the Region completed six consecutive years of growth

Uruguay

11.5

Peru

9.4

Panama

9.2

Paraguay

7.0

Argentina

6.8

Ecuador

6.5

Brazil

5.9

South America

5.9

Bolivia

5.8

Venezuela

4.8

Latin America and Caribbean

4.6

Dominican Republic

4.5

Central America

4.4

Cuba

4.3

Honduras

3.8

Chile

3.8

Guatemala

3.3

Costa Rica

3.3

Nicaragua

3.0

El Salvador

3.0

Colombia

3.0

Caribbean

2.4

Mexico

1.8

Haiti

1.5

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

11.0

12.0

LATIN AMERICA AND THE CARIBBEAN: RATES OF VARIATION IN GROSS DOMESTIC PRODUCT2008

(In percentages)

GDP per capita of L.A. and the Caribbean grew at over

3% annually for the fifth consecutive year

slide7

300

60

48,3

250

50

221

43,8

44,0

43,5

211

204

40,5

200

193

184

200

40

36,3

34,1

136

Millions

150

30

Percentage

22.5

97

19.4

93

89

18.6

89

19.0

18.5

100

20

68

71

62

13.3

12.6

50

10

0

0

1980

1990

1997

1999

2002

2006

2007

1980

1990

1997

1999

2002

2006

2007

Indigent

Poor but not indigent

Indigent

Poor but not indigent

Between 2003 and 2007 poverty and extreme poverty fell substantially...

LATIN AMERICA: TRENDS IN POVERTY AND EXTREME POVERTY

1980-2007

Millions of people

Percentage of people

Source: Economic Commission for Latin America and the Caribbean` (ECLAC), based on special tabulations from the household surveys of the respective countries.

a/Estimate corresponding to 18 countries of the Region plus Haiti. The figures placed on the upper part of the bars represent the percentage and total number of poor people (Indigent plus poor but not indigent).

slide8

This reduction is due to economic growth and betterincome distribution

Source: Economic Commission for Latin America and the Caribbean (ECLAC), based on special tabulations from the household surveys of the respective countries.

a/ Guatemala (in extreme poverty) and the Dominican Republic are excluded because the results of the disaggregation are not significant. b/Urban areas.

slide9

Political and Economic Situation

Region in search of self-sufficiency and self-determination

Health at the center of the political agenda

How to reconcile equity and stability

Crisis in traditional political parties

Relevance of human rights approach

Binational/Border conflicts, but no war

Heightened violence and insecurity

Demographic bonus: investment in youth

slide10

Political and Economic Situation

Lower economic growth but a better prepared Region

  • Improved fiscal situation, better balance of trade (surplus), lower external debt, and higher international reserves
  • Years of prudent policies have given us greater room to maneuver to deal with the financial crisis

ECLAC, IDB, IMF, and World Bank agree about:

  • Significant growth in 2008 (estimates range from 3% to 4.5%)
  • Lower growth in 2009 (estimate 2%)
  • But persisting lower economic growth than other regions of the world
  • Inequity remains unchanged and it is more concentrated
in 2009 a sharp deceleration in regional growth is expected
In 2009 a sharp deceleration in regional growth is expected

Peru

5.0

Panama

4.5

Uruguay

4.0

Cuba

4.0

Venezuela

3.0

Bolivia

3.0

Argentina

2.6

South America

2.4

Brazil

2.1

Central America

2.1

Paraguay

2.0

Nicaragua

2.0

Honduras

2.0

Guatemala

2.0

Ecuador

2.0

Colombia

2.0

Chile

2.0

1.9

Dominican Republic

1.5

Haiti

1.5

Caribbean

1.4

El Salvador

1.0

Costa Rica

1.0

Mexico

0.5

0.0

1.0

2.0

3.0

4.0

5.0

6.0

LATIN AMERICA AND THE CARIBBEAN: RATES OF VARIATION IN GROSS DOMESTIC PRODUCT 2009

(In percentages)

Latin America and Caribbean

20 MILLION PER POINT OF DECLINE?

slide13

Political and Economic Situation

Significant impact, especially in the social sector

  • Tight fiscal situation with pressures on social investment
  • Higher unemployment, informal employment, and unpaid family employment
  • Shrinking remittances affecting both the families that receive them and the local economy
  • Increase in poverty - approximately 15 million people, due to a combination of lower economic growth and higher energy and food prices
slide14
LATIN AMERICA(18countries): UNEMPLOYMENT RATEin the over-15 population, urban areas, by income deciles.2002-2006

Unemployment

Rate

drop in remittances
DROP IN REMITTANCES

LATIN AMERICA AND THE CARIBBEAN: CURRENT TRANSFERS (CREDIT), 2007

As a percentage of GDP and in millions dollars

57% cover health expenditures?

slide16

Political and Economic Situation

Impact varies by subregion and country

  • Mexico and Central America more affected
  • South America less affected (ECLAC estimates growth for 2009 around 2%)
  • Countries net fossil fuel and food importers (some Caribbean and Central America) very affected by price variations
  • Countries net fossil fuel and food exporters see fiscal revenues impacted by price variations. (soybean prices decline of almost 50% in recent months; mining products and fossil fuels)
slide17

Private health expenditure - direct out of pocket

(remains the most important component of national health expenditure) Central Government Health Expenditure-includes

Ministry of Health expenditure (it is less than one-quarter of total National Health Expenditure)

Changes in the composition of national health care expenditure over time. Latin America and the Caribbean, 1990-2005.

Source: Pan American Health Organization. Health Systems Strengthening Area. National health expenditure database.

slide18

Public health investment in the Latin American and Caribbean countries ismuch lower than in other countries and regions of the world, with the exception of Africa

Source: See HINTZ, Jorge - Latin America: the world region with worse poverty-inequality relation.

Virtual Library TOP www.top.org.ar/publicac.htm

slide19

Health expenditure has the greatest redistributive impact (But the redistributive impact of public expenditure does not always benefitthe poorest sectors of society)

Quintile I - Poorest

slide20

A great deal can be done to cushion theimpact of the financial crisis

  • Solidarity in times of crisis: safeguard progressthrough commitments;
  • among donor governments and the countries that require their support: maintain promised levels of development assistance;
  • among governments and their citizens: promote an ethical dimension in public policy, and, in particular, the maintenance of essential social and health services; and
  • among citizens: share risks and responsibilities as the foundation for strong health systems.
slide21

Protect health expenditure

Protect the health expenditure

slide22

Social protection nets to support the poor will bea priority

  • IMPORTANCE OF SOCIAL PROTECTION
  • Expanding income support programs can be more effective and with FASTER impact than creating new ones.
  • Income protection i.e. temporary employment programs with a social impact, such as construction of schools and clinics, water and sanitation, waste disposal.
  • Focalizingis critical for guaranteeing that expenditure through programs reaches those who need it.
  • Conditioned transfers and more rapidly without conditions, given to women, there is data that show that they will be used in healthy choices.
  • Policy coordination from several sectors: stabilize prices, cut food prices, reduce out of pocket expenditures, transportation vouchers, support health insurance payments, and keep children in school.
slide23

(Ingreso total del Quintil V = 100)

100

9%

Social expenditure

90

Primary income

80

70

60

Percentage

91%

50

40

16%

30

22%

20

30%

84%

78%

10

51%

70%

49%

0

Quintile I

Quintile II

Quintile III

Quintile IV

Quintile V

Social public expenditure has a major influence on the well-being ofthe poorest in society…

LATIN AMERICA: REDISTRIBUTIVE IMPACT OF SOCIAL PUBLIC EXPENDITURE

BY PRIMARY INCOME QUINTILES (Percentages)

Source: ECLAC, based on national studies.

a/18 countries. Average weighted by the significance of spending in the primary income of each country.

slide24

A five-point framework for action

  • Public expenditure for the poor, with a positive health impact

2.Leadership

3. Monitoring and analysis

4. New ways of doing business in international health

5.Health Sector Policy(Health systems reforms based on Primary Health Care and Health in all policies)

slide25

A five-point framework for action

A five-point framework for action

1. Public expenditure for the poor, with a positive health impact

General agreement about counter-cyclical public spending as a means to reactivate economyKey role in the push needed by many low income countries, since they have no capacity or fiscal space to finance these measures themselves.

The challenge is to guarantee that the spending will really favor the poor and have a positive impact on health .

slide26

A five-point framework for action

A five-point framework for action

1. Public expenditure for the poor, with a positive health impact

slide27

16

14

12

10

8

Annual rate of variation (%)

6

4

2

0

-2

-4

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

b/

Annual variation in Gross Domestic Product

Annual variation in Total Social Expenditure

… Public expenditure is procyclical. The challenge today is that it be countercyclical

Latin America and the Caribbean (21 countries):

ANNUAL VARIATION IN TOTAL SOCIAL EXPENDITURE AND GDP

Source: ECLAC, Social expenditure and national accounts database.

a/Weighted average of the countries. b/Provisional data.

slide28
Political Action Framework

Convergence and harmonization of institutional agendas at different levels of intervention

Cross-cutting issues to articulate health systems and health determinants

Achieve Good Health Outcomes for ALL

PRIMARY HEALTH CARE: TACKLE DETERMINANTS AND STRENGTHEN HEALTHSYSTEMS

slide29

ReportMacroeconomic s and Health; Investing in Health for Economic Development

Global Reporton the Health of PHC (IMS)

Launch ofFaces, Voices, and Places of MDGs

CDS Report

Financ. ofuniversal Access to health services (WHA 58.33)

MDGs andHEALTH (CD45.R8)

Strengthening of HR Management in the health services (CD43.R6)

Renewal of PHC,25 years since Alma-Ata (CD 44.RD)

Extension ofSocial Protection in Health (CSP26/12)

MillenniumDeclaration

Political Action Framework

189 countriescommitted to the MDGs

1st GlobalMeeting on HD, Chile

Declaration ofMexico on Health Promotion

StrategicPlan 2008- 2012

BangkokCharter for Health

PHCDeclaration of Montevideo

HEALTHAGENDA FOR THE AMERICAS2008-2017

2000 2001 2002 2003 2004 2005 2006 2007 // 2008

Reg. Goals for HR2007-2015 (CD 47.R19)

PH, health res., prod. of essential medicines and Access (CD47.R7)

slide30

Convergence and Articulation ofInstitutional Agendas

LEVELS OFINTERVENTION

ART I CULATION OF

AGENDAS

UN

Network ofCollaborating Centers

GlobalWork Program

TCC -cooperationamong Countries

GLOBAL

WH O

REGIONAL

SUBREGIONALTRANSNATIONAL

People, Families, andCommunities

HealthAgenda

for the

Americas

CCS - Country-/focused Cooperation

PARTNERSHIPS

Resolutions

NATIONAL

MDGHFA

PA H O

SUBNATIONAL

StrategicPlan

MUNICIPALCOMMUNITY

OtherCooperation and Financing Agencies

Decentralizedtechnical cooperation

slide31

Potential impact of the international crisis on the priorities of the Health Agenda for the Americas (HAA) 2008-2017 and Strategic Objectives of the Regional Strategic Plan (SP) 2008-2012

Context:

  • From 2007 to January 2009 the LAC commodities index fell 60%
  • Demand for Latin American exports falling
    • the terms of trade are also deteriorating
  • Access to external financing becoming increasingly difficult
  • Climate of uncertainty undermining the labor market and negatively affecting consumption and investment
  • Response of the countries in LAC has been uneven
    • Broad array of policies being implemented in each country in LAC (which is related to country ability to finance these policies andestablish the institutional framework)
slide32
Priorities of the Health Agenda for the Americas (HAA) 2008-2017 and Strategic Objectives of the Regional Strategic Plan (SP) 2008-2012

Two basic scenarios for the HAA and the SP:

  • “Business as usual” approach (most likely expenditures in the social sector and particularly inhealth are likely to decrease) 
    • This will have a major effect on the countries’ ability to deliver their contribution to the HAA and achieve MDGs. 
    • The SP is currently funded at about 50% by voluntary contributions, the most important partners being the US, Spain, and Canada. Current expenditures still based on previous year's budgets, but in future years may be reduced.
slide33
Priorities of the Health Agenda for the Americas (HAA) 2008-2017 and Strategic Objectives of the Regional Strategic Plan (SP) 2008-2012

Two basic scenarios for the HAA and the SP:

  • Alternative scenario

(take advantage of the crisis fostering higher investment inhealth, or at least protect current status)

Considerations:

    • Health is labor intensive, considered a critical component for successful fiscal interventions
    • Given the likely high unemployment impact of economic downturns, there will be a need to reduce social impact. Health always a very powerful tool
    • Long-term effect of decreasing health investments will be much more expensive to correct, plus the obvious ethical impact.
slide34

HEALTH FOR ALL

LINKAGE BETWEEN SYSTEMS AND DETERMINANTS

Healthy Public Policies

Emphasis on Equity

PHC-based Health Systems

Health Determinants

Intersectoral Approach

LEADERSHIP

SOCIOECONOMIC

  • Health Promotion and Participation

POLITICAL

FINANCING AND INSURANCE

Social Protection

ENVIRONMENTAL

Human Rights

CULTURAL AND LIFESTYLE

SERVICE DELIVERY

Gender, Ethnicity and Intercultural

BIOLOGY & HEREDITY

HUMAN RESOURCES

MDGs

RESULTS-BASED MANAGEMENT

slide35

Health for ALL

Social Justice

Equity

Solidarity

State Responsibility

Right to Health

Universality

Participation

Health Determinants

PHC-based Health Systems

LINKAGE OF SYSTEMS AND DETERMINANTS

Healthy Public Policies

Developintegrated public policiesamong multiple sectors,“Health in allpolicies”

slide36

Health for ALL

Social Justice

Equity

Solidarity

State Responsibility

Right to Health

Universality

Participation

Health Determinants

PHC-based Health Systems

LINKAGE OF SYSTEMS AND DETERMINANTS

Healthy Public Policies

Emphasis on Equity

Prioritize equity in health within developmentalpolicies, plans and programs

slide37

Health for ALL

Social Justice

Equity

Solidarity

State Responsibility

Right to Health

Universality

Participation

Health Determinants

PHC-based Health Systems

LINKAGE OF SYSTEMS AND DETERMINANTS

Healthy Public Policies

Emphasis on Equity

Intersectoral Approach

Strengthen health sector leadership tomanage intersectoral processes

slide38

Health for ALL

Social Justice

Equity

Solidarity

State Responsibility

Right to Health

Universality

Participation

Health Determinants

PHC-based Health Systems

LINKAGE OF SYSTEMS AND DETERMINANTS

Healthy Public Policies

Emphasis on Equity

Intersectoral Approach

  • Health Promotion and Participation

Make health promotion a core in Government and Civil society action

slide39

Health for ALL

Social Justice

Equity

Solidarity

State Responsibility

Right to Health

Universality

Participation

Health Determinants

PHC-based Health Systems

LINKAGE OF SYSTEMS AND DETERMINANTS

Healthy Public Policies

Emphasis on Equity

Intersectoral Approach

Health Promotion and Participation

Social Protection

Introduce universal approaches and mechanisms for socialprotection in health

slide40

Health for ALL

Social Justice

Equity

Solidarity

State Responsibility

Right to Health

Universality

Participation

Health Determinants

PHC-based Health Systems

LINKAGE OF SYSTEMS AND DETERMINANTS

Healthy Public Policies

Emphasis on Equity

Intersectoral Approach

  • Health Promotion and Participation

Social Protection

Human Rights

Make enjoyment of the highest attainable levelof health a reality for all

slide41

Health for ALL

Social Justice

Equity

Solidarity

State Responsibility

Right to Health

Universality

Participation

Health Determinants

PHC-based Health Systems

LINKAGE OF SYSTEMS AND DETERMINANTS

Healthy Public Policies

Emphasis on Equity

Intersectoral Approach

  • Health Promotion and Participation

Social Protection

Human Rights

Gender, Ethnicity and Intercultural

Mainstream the gender, ethnic, and interculturalapproach in all interventions

slide42

Convergence of thought and action

  • Eliminate anderadicate diseases that affect neglected populations, encouraging a local development approach and citizenship-/building
  • Strengthenhealth systems based on primary care and build a workforce capable of meeting the challenges of the MDGs
  • Guarantee thebenefits of science and technology, closing equity gaps
  • Move from therisk approach to the construction of health and quality of life; gear action to social, political and environmental determinants
  • Global healthsecurity and the application of new rules for relations between countries
  • Synergies andmaximum results through partnerships for health for all and with all
slide43

Convergence of thought and action

  • Immunizationas a regional public resource, maintaining equity and universal coverage
  • Timely,complete, and shared health surveillance
  • Middle-incomecountries positioned in the global health scenario
  • Access toreliable, validated, evidence-based health information
  • Access totimely, quality health goods and services without exclusion
slide44

Results-based Management

Mandates for the period 2008-2012

CountryCooperation Strategies (CCS)

GeneralProgram of Work of WHO 2006-2015 (Global Agenda)

PASBProgram budget

2008-2009(and 2010- 2011, and 2012-2013)

Subregionalhealth agendas

PASBStrategic Plan

2008-2012

HealthAgenda for the Americas

2008-2017

slide45

Public Health Policies toward HEALTH FOR ALL

HEALTH FOR ALL

MILLENNIUM DEVELOPMENT GOALS

PrimaryHealth Care

SocialProtection

HealthPromotion

Information and Knowledge

Human Rights