Globalization and health effects in SAARC region, evolving a framework of analysis.

• Author: Arora, Guljit K.
• Position: South Asian Association for Regional Cooperation - Report

Abstract

Globalisation has evolved out of a gradual progress of progressive integration of the world economies through falling trade barriers, greater exchange and mobility of capital and labour. The process further facilitated by a number of developments in international cooperation, emergence of international institutions and the continued advances in information and communication technologies also paved the way for global governance. The new globalisation environment has driven several developing countries with a sizeable public sector to adopt policy reforms including macroeconomic and financial stabilization policies, creation of market-oriented environment and more space for the private sector. This goes hand in hand with increasing internationalization of goods, services, labour and capital, and exchange and exposure of human beings for development oriented programmes. However, such a process is likely to have far reaching effect on health--both direct and indirect particularly in developing countries, where health attainments are low and majority of population lacks resources to finance their healthcare needs. The dynamics, mechanism and pathways through which the process of globalisation affects the health sector is not yet clear as their linkages are complex and influenced by several key set of endogenous and exogenous factors.

This paper while focusing on the SAARC region (South Asian Association for Regional Cooperation), discusses different channels and their dynamics through which the process of globalisation affects the health sector. An attempt is made to evolve an analytical framework for assessing the health effects in a comparative basis and explore both direct and indirect effects of globalisation on health. The SAARC region is selected as globalisation induced policies particularly in these countries are being questioned on grounds of - rising healthcare cost, WTO compliance costing too high to the domestic industry and economy, and increasing infectious diseases associated with international travel and migration. These issues are further discussed in the light of accessibility, efficiency, and quality of healthcare delivery, geographical inequalities, heavy burden of private healthcare financing, and fiscal stress faced by governments in these countries. This analysis assumes importance if health objectives set forth in the Millennium Development Goals (MDG) have to be realized in the SAARC region.

1. The Context

   Globalization seen in the historical perspective has evolved out of a gradual process of progressive integration of the world economy through falling barriers to trade, enhanced exchange, and greater mobility of capital and labour. These trends while providing market-orientation were further facilitated by the emergence of economic co-operation among various countries and international institutions, the economic collapse of the former Soviet Union, the macroeconomic imbalances in several countries particularly in the 1980s, and the emergence of the European Union (EU). The rapid advances in information and communication technologies (ICTs) and their digital convergence has also complemented the globalisation process by cutting down drastically the delay and distance along with providing a far greater access to information, which is not only rapid and cheap, but 'symmetrical' too, that is more and more people can access vast information, whenever and wherever they need it.

   Globalization is neither a simple economic phenomenon nor a traditional concept of internationalization. It is a process of integration, which enables an intermeshing of social groups in almost all spheres, be it economic, social, religious, political, legal and cultural. Economic integration involving an increasing interaction of inputs, factors and final product markets across countries enhances the role of multinational corporations (MNCs) in international economy (1).

   In fact globalization requires conscious human decisions to bring in a general direction of change towards market-oriented environment (Petras and Veltmeyer, 2001). It works out by bringing the world together through socio-economic integration, and changes in the 'mindset', initially, at the key decision-making level among those who matter in influencing attitudes and orientations, and then gradually percolating down at the grass root level paving the way for an evolution of a 'global mindset' (Arora 2002).

   Globalization is also different from the usual notion of internationalization as it works towards crossing the boundaries of national economies to establish a single global economy. The interactions decisively affect national economic activity beyond the power of the national government, usually without even its knowledge. In such a situation action becomes a matter of complex negotiation rather than simple flat while making politics widely dispersed and complex. The old agenda of planning becomes entirely utopian (Harris 1999).

   Globalization has prompted the developed countries to claim that the world has become a global village requiring regular interactions, and de-politicized institutions with harmonized and universalized rules and standards, and changes in developmental trajectories suggesting globalization path as the only successful development model. In addition, the different facets of globalization including world wide media coverage, expansion of trade, foreign direct investment (FDI) and financial markets, migration, rise of internet, crime and terror, and globalization of environmental problems have created a greater demand for international coordination and also the legitimacy of international organizations. The use of globalization as an instrument of multilateralism has further created a basis for global policies and governance frameworks needed in the areas of trade, development, finance and international peace and security, as well as in other social and technical fields. Declarations and covenants arising out of this multilateral system legitimise global governance, which no individual state, however powerful, can match. Thus, as global integration trends grow, the need for changes in the policy framework and their internal coordination and management both at the national and international levels paving the way for global governance not necessarily under UN flag simultaneously grow.

   This background of globalization helps us to derive the following key points worth considering in the context of evaluating its impact on the health sector:

   (i) Globalization is a reality now and it is being demonstrated as more or less the necessary foundation for productivity, growth and development.

   (ii) Globalization process, world governance, and changes in nation-state development policies and allied institutions, all go together.

   (iii) The national economic environment has to be changed by making conscious efforts towards market-orientation by launching policy changes at all levels to realign the forces of market versus state in order to create market oriented environment and more space for the private sector over the period. This requires state's quantitative withdrawal from all economic spheres to give more space to the private sector. This will have serious impact on the political economy structure of the country.

   (iv) Domestic business have come under strong pressures as the pattern of competitiveness has undergone a serious change with non-price factors like product quality, brand name, packaging, and delivery, and after sales services. Firm's performance if not more have become equally important consideration as the price is (2). Comparative advantage has become the necessary condition of business sustenance whether it is for the domestic economy or exports (3).

   Such a process of globalization, no doubt, has promoted open societies and open economies along with encouraging a relatively freer exchange of goods, ideas and knowledge, and creativity and entrepreneurship in some parts of the world along with contributing towards awareness of rights and identities enabling social movements to strengthen democratic accountability. According to World Development Report 2003, over 200 million people came out of poverty in a single decade in East Asia. Global conscience, at least theoretically speaking, is emerging more than ever before to the income inequities, poverty, gender discrimination, child labour, health hazards and environmental degradation.

   During the course of globalization, general economic risks of the developing countries have become more real. The fundamental problems of poverty, unemployment, exclusion, inequality and corruption are still widespread. The future of open markets is increasingly in question with global terrorism rising and global governance reaching a critical juncture. At present, the process of globalization lacks means to keep the balance between democracy and markets, because market success and failure have tended to become the ultimate standard of behaviour, and promotes the attitude of 'the winner takes all'. This in turn, weakens the fabric of communities and societies.

   This process of globalization is likely to have far reaching impact on the health sector in developing countries, particularly the SAARC region. Determinants of health range widely to include income and wealth, education, peace and security, and environmental conditions are likely to be influenced during the globalization process especially in public sector dependent economies. In addition, globalization induced policies, as stated above, are in question due to their likely adverse effect on the poor, the domestic industry and economy, and burdening the health systems with infectious diseases associated with international travel and migration particularly if the existing problems with respect to accessibility, efficiency, quality of healthcare delivery and inter-regional inequalities in healthcare financing continue to...