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 30th – April 3rd, 2009
 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

 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

GDP GROWTH IN THE DEVELOPED ECONOMIES

In annual variation rates

4.0 4.0

3.5 3.5

3.0 3.0

2.5 2.5

2.0 2.0

1.5 1.5
1.0 1.0

0.5 0.5

0.0 0.0
06:Q1 Q2 Q3 Q4 07:Q1 Q2 Q3 Q4 08:Q1 Q2 Q3 Q4 09:Q1
-0.5 -0.5

-1.0 -1.0

-1.5 -1.5

United States Euro Zone Japan

The private sector is the most exposed
LATIN AMERICA AND THE CARIBBEAN (SELECTED COUNTRIES): VARIATION IN THE
FOREIGN DEBT, 2006-JUNE 2008
(As a percentage of GDP)

Peru 7.9%
-1.3%
1.2%
Mexico -1.4%

Colombia 1.0%
2.5%
9.0%
Chile 2.0%

Brazil 4.3%
-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

 In 2008 the Region completed six
consecutive years of growth
LATIN AMERICA AND THE CARIBBEAN:
RATES OF VARIATION IN GROSS DOMESTIC PRODUCT 2008
(In percentages)
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

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

3% annually for the fifth consecutive year
 Between 2003 and 2007 poverty and
extreme poverty fell substantially...

LATIN AMERICA: TRENDS IN POVERTY AND EXTREME POVERTY

1980-2007

Percentage of people Millions of people

60 300
48,3
50 43,8 44,0
250 221
43,5
40,5 200 204 211 193
40 36,3 34,1 200 184
Percentage

Millions
30 150 136
22.5 97
18.6 19.0 18.5 19.4 93 89 89
20 100 71 68
13.3 12.6 62
10 50

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

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).
 This reduction is due to economic
growth and better income 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.
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

 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
Substantially lower economic growth
 In 2009 a sharp deceleration in regional
growth is expected
LATIN AMERICA AND THE CARIBBEAN: RATES OF VARIATION IN GROSS DOMESTIC PRODUCT
2009
(In percentages)

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
Latin America and Caribbean 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

20 MILLION PER POINT OF DECLINE?

 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
LATIN AMERICA(18countries): UNEMPLOYMENT RATE
in the over-15 population, urban areas, by income deciles.
2002-2006

U
n
e
m
p
l
o
y
m
e
n
t
R
a
t
e
 DROP IN REMITTANCES
LATIN AMERICA AND THE CARIBBEAN: CURRENT TRANSFERS (CREDIT), 2007
As a percentage of GDP and in millions dollars

8,000 40

7,000 35

6,000 30

Porcentajes del PIB

Millions dollars

5,000 25

4,000 20

3,000 15

2,000 10

1,000 5

0 0

México
Guyana

Guatemala

R. Dominicana
El Salvador

Nicaragua

Argentina

Venezuela
Granada

Uruguay
Jamaica
Haití

Costa Rica
Honduras

Bolivia

Paraguay

Colombia

Panamá
Ecuador
Belice

Brasil
Chile
Perú
Millions dollars Percentage of the GDP

57% cover health expenditures

 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)
 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.
Public health investment in the Latin American and Caribbean countries is
much 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
 Health expenditure has the greatest redistributive impact

(But the redistributive impact of public expenditure does not always benefit
the poorest sectors of society)

Quintile I - Poorest
 A great deal can be done to cushion
the impact of the financial crisis

• Solidarity in times of crisis: safeguard progress through

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.
Protect health expenditure
Protect the health expenditure
Social protection nets to support the poor
will be a 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.

• Focalizing is 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.
Social public expenditure has a major influence
on the well-being of the poorest in society…
LATIN AMERICA: REDISTRIBUTIVE IMPACT OF SOCIAL PUBLIC EXPENDITURE
BY PRIMARY INCOME QUINTILES (Percentages)
(Ingreso total del Quintil V = 100)

100 9%
Social expenditure
90

80 Primary income

70
Percentage

60
91%
50

40
16%
30
22%
20
30% 84%
10 51% 78%
70%
49%
0
Quintile I Quintile II Quintile III Quintile IV Quintile V

Source: ECLAC, based on national studies.

a/18 countries. Average weighted by the significance of spending in the primary income
of each country.
 A five-point framework for action

1. 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)
 A five-pointframework
A five-point framework for
foraction
action
1. Public expenditure for the poor, with a positive health impact

General agreement about counter-cyclical public

spending as a means to reactivate economy

Key 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 .
 A five-pointframework
A five-point framework for
foraction
action
1. Public expenditure for the poor, with a positive health impact
 … 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

16

14

12
Annual rate of variation (%)

10

-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

Source: ECLAC, Social expenditure and national accounts database.

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

Achieve Good Health Outcomes for ALL

PRIMARY HEALTH CARE:

TACKLE
DETERMINANTS AND STRENGTHEN HEALTH SYSTEMS

• Political Action Framework

• Convergence and harmonization of

institutional agendas at different levels of
intervention

• Cross-cutting issues to articulate health

systems and health determinants
 Millennium
Declaration
189 countries Political Action Framework
committed to
the MDGs

Declaration of 1st Global

Meeting on HD,
Mexico on
Chile
Health
Promotion Strategic Plan
Bangkok Charter 2008- 2012
Report for Health Global Report
Macroeconomic s on the Health
Launch of HEALTH
and Health; PHC Declaration Faces, Voices, of PHC (IMS)
AGENDA FOR
Investing in
of Montevideo and Places of THE
Health for
Economic MDGs CDS Report
AMERICAS
Development
2008- 2017

2000 2001 2002 2003 2004 2005

2006 2007 // 2008

Reg. Goals for HR

Strengthening of Renewal of PHC,
MDGs and Financ. of
Extension of PH, health res.,
2007-2015 (CD
HEALTH universal Access
HR Management in Social Protection 25 years since 47.R19)
to health services
the health services in Health Alma-Ata (CD (CD45.R8)
(WHA 58.33)
(CD43.R6) (CSP26/12) 44.RD) prod. of
essential medicines
and Access
(CD47.R7)
 Convergence and Articulation of
Institutional Agendas
A LEVELS OF
R INTERVENTION
U T Network of
I Collaborating
Centers
N Global C GLOBAL
Work U
Program L TCC
A
W c
- ooperation
T among Countries
REGIONAL
H I SUBREGIONAL People, Families,
O O TRANSNATIONAL
ions
Health and Communities
N
Agenda
olut

NATIONAL
for the O MDG
P
Res

F
Americas HFA
A A
H SUBNATIONAL
G
O E CCS -
Strategic N Country-/focused
Other Cooperation
D Decentralized MUNICIPAL
Plan
Cooperation A technical COMMUNITY
and Financing S cooperation
Agencies
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 and establish the
institutional framework)
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:

1. “Business as usual” approach

(most likely expenditures in the social sector and particularly in
health 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.
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:

2. Alternative scenario

(take advantage of the crisis fostering higher investment in health,

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.
 Healthy Public Policies

Emphasis on Equity
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
 Health for ALL
Right to Equity Solidarity Social Justice
Health
Universality t at e R esp onsibility
Participation S

Healthy Public Policies

Develop integrated public policies among

multiple sectors, “Health in all policies”
 Health for ALL
Right to Equity Solidarity Social Justice
Health
Universality t at e R esp onsibility
Participation S

Healthy Public Policies

Emphasis on Equity
Prioritize equity in health within
developmental policies, plans and
programs
 Health for ALL
Right to Equity Solidarity Social Justice
Health
Universality t at e R esp onsibility
Participation S

Healthy Public Policies

Emphasis on Equity
Intersectoral Approach
Strengthen health sector leadership to
manage intersectoral processes
 Health for ALL
Right to Equity Solidarity Social Justice
Health
Universality t at e R esp onsibility
Participation S

Healthy Public Policies

Emphasis on Equity
Intersectoral Approach
Health Promotion and Participation
Make health promotion a core in
Government and Civil society action
 Health for ALL
Right to Equity Solidarity Social Justice
Health
Universality t at e R esp onsibility
Participation S

Healthy Public Policies

Emphasis on Equity
Intersectoral Approach
Health Promotion and Participation
Social Protection
Introduce universal approaches and
mechanisms for social protection in health
 Health for ALL
Right to Equity Solidarity Social Justice
Health
Universality t at e R esp onsibility
Participation S

Healthy Public Policies

Emphasis on Equity
Intersectoral Approach
Health Promotion and Participation
Social Protection
Human Rights
Make enjoyment of the highest attainable level
of health a reality for all
 Health for ALL
Right to Equity Solidarity Social Justice
Health
Universality t at e R esp onsibility
Participation S

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
intercultural approach in all interventions
 Convergence of thought and action

Move from the Guarantee the Eliminate and Strengthen Global health
risk approach benefits of eradicate health systems security and the
to the science and diseases that based on application of new
construction of technology, affect primary care rules for relations
health and closing equity neglected and build a between countries
quality of life; gaps populations, workforce
gear action to encouraging a capable of
Synergies and
social, political local meeting the
development maximum results
and challenges of
approach and through
environmental the MDGs
citizenship-/bu partnerships for
determinants
ilding health for all and
with all
 Convergence of thought and action

Immunization Access to Access to Middle-income Timely,

as a regional reliable, timely, quality countries complete, and
public validated, health goods positioned in shared health
resource, evidence-based and services the global surveillance
maintaining health without health scenario
equity and information exclusion
universal
coverage
 Mandates for the period 2008-2012

General PASB Subregional Country

Health PASB
Program of Program health Cooperation
Agenda for Strategic
Work of WHO budget agendas Strategies
the Plan
2006-2015 (CCS)
Americas 2008- 2008-2009
(Global
2008-2017 2012 (and 2010-
Agenda)
2011, and
2012-2013)

Results-based Management
 Public Health Policies toward
HEALTH FOR ALL

HEALTH FOR ALL

MILLENNIUM DEVELOPMENT GOALS

Primary
Health Social
Health Promotion Protection
Care

Information
Information and
and Knowledge
Knowledge
Human
Human Rights
Rights