26 Nov 2015

Globalization, growth and adverse health outcomes in sub-Saharan Africa

Dilara writes*

In the 1980´s economic globalization has been largely taken up by international monetary organizations like the IMF to the newly independent states in the post colonial ear in the form of trade liberalization, growth and poverty reduction programs. These programs were often set out as conditional loans to be given to developing countries with the terms of a restructuring in domestic policies particularly on the grounds of domestic economy. The loan programs also known as structural adjustment (SALs) are applied when cuts in government spending, privatization of government enterprises, and promotion of free trade, foreign investment and ownership were introduced. Since 1985, application of conditional loans has increased and had varied impacts on the economies of some of the states. A very common critique towards the SAL/SAPs has ben its limitations to civil well-being Zimbabwe for example, experienced a radical growth in the mid 1980s and was used an an example of successful implementation of SALs by the IMF.

Despite Zimbabwe’s financial leap, social sectors like health and education deteriorated, mostly due to cuts in government spending between 1991-1996. With the introduction of the cost-sharing system, healthcare expenditure increase and limited proper access for low-income populations. This impact was not only limited to Zimbabwe´s case but also to counties like Tanzania where healthcare turned into a commodity rather than a right [pdf]. The crippling of the healthcare and education systems was problematic especially because caused stagnations in state development. One could argue that implementation of Structural Adjustment Loans/Programs were driven by economic growth but lowered the social well-being which had an adverse outcome on the overall development of the state.

Bottom Line: While SAL/SAPs were aimed to promote economic globalisation in developing countries through liberalised, trade and conditional loans to reduce poverty, it crippled healthcare systems through cuts in government spending. This had an adverse effect on the well-being of the civil society.

* Please comment on these posts from my microeconomics / growth & development economics students, to help them with unclear analysis, other perspectives, data sources, etc.