GLOBAL ECONOMIC CRISIS & HEALTH CHALLENGES FOR OUR YOUNG PEOPLE

1. GLOBAL ECONOMIC CRISIS & HEALTH CHALLENGES FOR OUR YOUNG PEOPLE Assoc Prof. Dr. Nabilla Al-Sadat bt. Abdul Mohsein MBBS (UM), MSc. HPF(Lon), MPH (UM), PhD (Aust) Centre for Population Health (CePH) and Department of Social and Preventive Medicine (SPM), University of Malaya

2. Presentation Outline: • The Global Economic Crisis • Impact of crisis on: • Health and social outcomes • Health utilization and expenditures • Health issues in our young people • Health challenges for our youths • Policy options for Malaysia • Leverages to mitigate crisis implications

3. Global economic crisis • In most basic terms, the Globalization of the world economy is the integration of economies through out the world through trade, financial flows, the exchange of technologies, information and the movement of people. • Above explains why Asian financial markets traditionally track those of the USA and other developed countries

4. The “Perfect Storm” has passed but leaving behind a trail of destruction across the global economies Total wealth of USD36 trillion (66% of global GDP or >2.5x of US GDP) was wiped out • USD30 trillion loss in market capitalisation • USD1 trillion write offs/downs & credit losses • > USD50 billion loss in commodity markets • > USD5 trillion loss in real estate sectors

5. The leading economies are in recession and may drag the whole world down with them … No country is spared: • US, EU, S’pore, UK, Japan, India, ASEAN, China, Russia, Brazil Recession -10 year cycle : • 1974, 1980, 1991 , 1998 and 2007 We should brace ourselves for a protracted recovery of the economy (a ‘long U’)

6. How Does the Current Crisis Compare? • Previous Crisis • Originated in developing countries • Many countries had large fiscal & • external deficits • Current Crisis • Originated in developed countries – • Contagion effect • Countries with better fiscal positions not spared • Importance of FDI has increased in most developing countries. • Poor countries, especially in Africa are Aid dependent for financing • government expenditure and Remittances are important source of foreign exchange and direct support to household

7. Inflation - Number 1 concernnow Some inflation numbers : Rate in May/June 08 vs. (2007) • U.S. - 5.2% (2.7%) worst in 17 years • China - 7.7% (4.8%) • India - 7.8% (4.4%) • Europe - 3.7% (2.0%) • Malaysia - 7.7% as of June 08, (2.0%) • Vietnam - 25.2% (8.3%) • Singapore - 7.5% worst in 26 y

8. Currencies may be “competitively devalued” to prop up exports (Fiscal Policies) Source: World Bank (2008), “Weathering the Storm: Economic Policy Responses to the Financial Crisis.”

9. The World is in Deep Economic Turmoil

10. NO end insight… • The current global economic crisis started in 2007 and peaked in 2008. • There is at the moment decreased momentum but global economy still remain in recession • Malaysia like many other WPR countries is not immuned as we can see in equity index losses of 2007/8

11. Asia Pacific equity index losses: July 2007-December 2008

12. How Severe is the Crisis in Malaysia? Latest IMF growth projections for 2009 • World 0.5% • USA -1.5% • Eurozone -2% • UK -2.8% Malaysian Economy contracted by 3.5% in 4th quarter Projection of global job losses = 51m Sharp deterioration in projections as crisis continues

13. Impact of the economic crisis on health

14. Health and GDP

15. Impact of Current Crisis • Strong link between economic growth, household incomes and poverty rates. – Estimates suggest that a 1 (one) % decline in developing country growth rates could trap an additional 20 million people into poverty (World Bank, 2008). • Current crisis may last longer as developed countries are likely to import less from export-dependent developing countries – Global trade is expected to decline by 2.5 % in 2009 (World Bank, 2008). •

16. Framework for analysing the effects of economic crisis on health (1) Capital flight / ↓ Foreign exchange / Currency devaluation (8) ↑ Govt debt / ↓Public financing (3) ↑ Private debt / ↑ Bankruptcies (2) ↑ Inflation / ↑ Price health inputs (6) ↓ Real wages (4) ↑ Unemployment 9) ↓ Supply health services (5) ↓ Social protection (incl health insurance and OOP) (11)↑ Food prices (7) ↓ Household purchasing power (10) ↓ Health service use (12) ↓ Nutrition (13) ↓ Health status

17. Impact on Health Outcomes • Children and women tend to bear the brunt of crises as households economize on food consumption. – Infant Mortality Rates (IMR) and Nutrition levels usually worsen during and after a crisis. • Severe undernourishment increased from 24% from 1990-94 to 27.2% from 1997-98 in East Asia and the Pacific (UNICEF, 2009). • Elasticity of infant mortality with respect to per capita GDP is approximately -0.56 (Schady and Friedman, 2007). • Elasticity of child malnutrition with respect to per capita GDP is between 0.3 to 0.5. (Haddad et al).

18. Evidence from Asia Indonesia • Increased prevalence of micro-nutrient deficiencies (esp. vitamin A) in children and women of reproductive age. (Macfarlane Burnet Centre for Medical Research, 2000) • Increase in the numbers of women (by 25% in 1998) whose body mass index is below the level at which risks of illness and death increase (World Bank, 2001) Thailand • 22 % increase in anemia amongst pregnant women (Knowles et al, 1999)

19. Evidence from Latin America Latin American crises in the 1980s showed decline in average Infant Mortality Rates (IMR) (Lustig, 1995) • Peru – 2.5 %age point increase in infant mortality for children born in 1989 and 1990. (Paxson & Schady, 2005) • Mexico – Average of 7-10 % increase in child mortality during crises years. (Ferreira & Schady, 2008)

20. The Global economic crisis no doubt posed grave negative impact in the income generating potentials of the most vulnerable groups in most third world economies (youths, Elderly and the widowed) • Adolescence- the transitional period separating childhood and adulthood. • Not a girl..not yet a woman • It is the phase of life when certain specific anatomical, physiological and psychological changes occur in the body.

21. Defining the Young • Adolescents 10-19 years • Early adolescence 10-14 years • Late adolescence 15-19 years • Youth 15-24 years • Young People 10-24 years There are about 1.2 billion adolescents worldwide and one in every five people in the world is an adolescent

22. Malaysia: Demographics at 2008 • Total Population – 27, 728 700 • 8, 875 957 (32.0%) are below the age of 15 years • 17, 621 589 (63.6 %) are aged 15-64 years • 1, 231 154 (4.4 %) are 65 years or older Young people aged 15-24 form 18.3% of the population

23. Distribution of young people in Malaysia over the years:

24. Distribution of young people in Malaysia by gender

25. Global economic crisis & health of young • WHO reports have provided yellow light warning on the effects of global economic crisis on young people’s health. • Studies by WHO Regional office for the Western Pacific expressed concern on rising unemployment and shrinking work opportunities for the young people - being unable to afford medical treatment. • Last one in, first one out. • Young people – vulnerable segment of the population

26. Vulnerable populations are expected to increase substantially as the impact of the financial crisis continues. • Current data indicates crisis will worsen the already serious poverty and social health protection issues in Asia and the Pacific, where more than 900 million people live on less than US$ 2 a day. • International Labour Organization (ILO) indicate that unemployment in the Asia Pacific region could rise by more than 23 million this year

27. Overall poverty: Reversals of the gains in poverty reduction?

28. Governments are under pressure to cut health budgets due to the financial crisis, further aggravating access, equity, quality and utilization of health services • Any cut in health budget expenditure will further worsen the condition of the vulnerable groups(youth) • Malaysian Health care Financing is largely out-of-pocket (73.1%) followed by private health insurance (13.8%).

29. Global economic crisis & health of young In Europe the HBSC studies have related inequality between and within countries due to economic disparities with adolescents development • Adolescents in wealthier countries, and countries with less unequal distribution of family affluence are found to have better health • Economic inequality is shown to be associated with an increased prevalence of exposure to bullying among young people with subsequent detrimental effects to their health

30. Unemployment rising, exacerbating income insecurity • Up to 24.8 million people could lose their jobs • As the crisis unfolds, it is estimated that as many as 24.8 million people, particularly young women employed in the manufacturing sector could lose their jobs in 2009. Many millions more will experience rising income insecurities.y 30% of our elderly receive pensions • Only 20% of the region’s people have access to health-care coverage

31. Social and health consequences of the economic crisis to the young people • Increased poverty • Reduced social supports • Food insecurity • Reduced ability to live a healthy life style • Reduced access to quality health care • Premature death and morbidity

32. In effect what is worse, is the young people will be the building blocks of our next generation and society…. • Negative effect on sense of belonging • Social exclusion • Difficulties in attaining yearnings and aspirations • Increased social disparities • Increased mental health outcomes • Increased social vices and crimes • Decreased productivity

33. Crime Rates in Malaysia 2000-2004 Crime rate in Malaysia 1980-2004

34. Crime Rates in Malaysia 2000-2008

35. Crimes in Malaysia The Crime Index worsened from 156,315 cases in 2003 to 224,298 cases in 2007 (45% rise over past four years), increasing 13.4% in 2007 alone. • Violent crime increased by 85% from 2003 to 2006. • Selangor is the state with the highest crime rates for both petty and violent crimes. • Most of the crime takes place in high-density population areas like Petaling Jaya (Selangor) where the police to population ratio is 1: 1154. POVERTY RELATED! • Studies show that 95% of our prisoners were earning below Malaysian income per capita

36. A ray of hope……

37. Womb to tomb/ Sperm to worm programmes

38. AREAS FOR ACTION • Investing in Preventive Services can save lives • Most of the health problems we experience throughout the lifecycle can be prevented • Awareness for the needs of young people including nutritional and other needs

39. Consequences of improved nutrition at various stages of the life-cycle

40. Conclusion-1 • There is the need to see health as an integral part of human capital development and target it as part of any well meaning development effort and in such a way to cushion and contain any economic instability that may be unfolding in the foreseeable future.

41. Conclusion-2 • The vulnerable groups (youth) should be subjected to special capacity building and empowerment programmes with the explicit purpose of improving their caring as well as income generating potentials.

42. Crisis to opportunity in health policy • Crisis provides impetus to reform health spending • Stimulus packages should prioritize health and the social sector • Ensure policy coherence in all sectors impacting health • Integrated economic and social policy framework • Need to build social foundation for sustainable economic development

43. Take home message The global economic crisis has serious social implications and could reverse the precious gains made in the 2000s Job losses/earnings and loss of other incomes are the main channels of transmission of the crisis Pay attention to risks of difficult-to-reverse consequences: School attendance, healthcare utilization, nutrition, etc

44. Terima Kaseh Thank you for your attention nabilla@ummc.edu.my

45. References • AusAID. 2000. 'The Impact of the Asian Financial Crisis on the Health Sector in Indonesia‘ • Ferreira, F. Schady, N. 2008. 'Aggregate Economic Shocks, Child Schooling and Child Health'. Development Research • Group. Poverty & Human Development and Public Services Teams. World Bank. • International Monetary Fund (IMF). 2008. 'World Economic Outlook'. October 2008. • Knowles, J. Pernia, E. Racelis, M. 1999. 'Social Consequences of the Financial Crisis in East Asia'. Asian Development • Bank. • Mold, A. Olcer, D. Prizzon, A. 2008. 'The Fallout from the Financial Crisis (3): Will Aid Budgets Fall Victim to the Credit • Crisis?'. OECD Development Center • Ravallion, M. 2002. 'Who is Protected? On the Incidence of Fiscal Adjustment'. World Bank. • Roodman, D. 2008. 'History Says Financial Crisis Will Suppress Aid'. Center for Global Development. • Schady. N. Friedman, J. 2007. Infant Mortality Over the Business Cycle in the Developing World. World Bank Policy Research Working Paper No. 4346 • World Bank. 1999. 'Coping with the Crisis in Education and Health'. Thailand Social Monitor, July 1999 • World Bank. 2003. 'The Health Sector in Argentina: Current Situation and Options for Improvement'. Human Development • World Bank. 2007. 'Indonesia Public Expenditure Review 2007'. • World Bank. 2008. 'Trade Is Key to Overcome Economic Crisis‘ • World Bank. 2008. 'Global Financial Crisis and Implications for Developing Countries'- G-20 Finance Ministers' Meeting Sao Paulo, Brazil. November 8, 2008 • World Bank. 2008. 'Lessons from World Bank Research on Financial Crises‘. Development Research Group • World Bank. 2008. 'Weathering the Storm'. PREM Network • WHO. 2009. 'Impact of the Economic Crisis on Children'. Draft Working Paper