Financialisation of healthcare in Brazil: new evidence

By Norberto Montani Martins, Carlos Ocké-Reis and Daniel Drach

The covid-19 pandemic is showing how important universal health systems are. As the virus continues to devastate communities and economies, many governments have started to look at them with different lens. Investing in public health systems should be mandatory, but austerity policies in peripheral countries are still the priority. Moreover, the increasing financialisation of the health sector produces conflicts that constraint the achievement of a truly universal and comprehensive public healthcare. This is what we address in our recent paper, where we argue that lead firms in the provision of healthcare plans seem to have become platforms for the accumulation of wealth by financial investors, a process that is making shareholder value the main guiding principle of firm behaviour.

A good example of such contradictions is Brazil. A universal health system called the Unified Health System (Sistema Único de Saúde, or SUS) was established in the 1988 Constitution. However, it would be misleading to affirm it has provided universal access and comprehensive care: since its inception, SUS faced an inadequate low level of public spending that jeopardized its mission. In the 2000s, the Brazilian government eventually increased public spending in healthcare, but a kind of paradox emerged as it also set up many policies to foster private healthcare and private accumulation in that sector (e.g., health-related tax expenditures).

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Why Austerity is Not the Solution to the Policing Crisis

“Defund the Police” is a powerful slogan. It articulates a vision of a better world that so many of us on the left want to live in. A world free from the arbitrary state violence on display in the killings of George Floyd, Breonna Taylor, and Eric Garner. At the same time, either implicitly or explicitly, it also expresses a strong desire to address the problems that afflict American society with redistribution instead of violence through the provisioning of public goods such as education, health care, housing, and the like. To be sure, I want more than anything to live in this world, one without policing and with robust social democratic programs like universal single-payer health care and guaranteed housing. However, the politics of defund the police is not how we get from here to there.    

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Problems with a bottom-up approach to governance reform: Evidence from India

There is a neoliberal consensus pioneered by Hayek and Tiebout in the 1940s and 1950s in the idea that a market economy-like organisation of sub-national units in a federation will result in overall gains in institutional performance. Literature has focused on the efficiency gains to be derived from making sub-national units competitive guided by the principle that devolved government is better able to respond to voters’ choices. This rests on the assumption that local and national needs vary significantly. In this article, I ask whether the prioritisation of service delivery in healthcare and education sectors is indeed something that varies across states in India. The Indian federal system has been increasingly under pressure to devolve power to the states since the economy was set on a path to liberalisation. Initially, this pressure came from the outside, through international institutions (Bretton Woods, largely) but this opportunity was instantaneously accepted by sub-national politicians who promoted, rightly, the cause of their constituencies. This has taken shape in the form of reduced centralised monitoring of service delivery, and the funds previously allocated to this end are now being directly transferred to states who have unconditional leeway to allocate it to various uses. This occurred too suddenly without a mechanism in place to safeguard and ensure the equitable delivery of essential services in healthcare and education, and an ever widening gap among states.

fig1Source: Data from CMIE States of India, RBI

Building on to this, we also have inter-regional issues due to clustering economies. Some states benefit whilst others (often, the poorer ones) lose out by disgraceful margins. There is a race to the bottom on regulatory easing for corporations, and inter-state bargaining for central resources is competitive, rather than cooperative. Transplantation of a European approach to governance and institutions in the Indian context has meant that natural resources are being plundered by sub-national governments to promote corporate interests, as their citizens remain deprived. Public hospitals and primary healthcare infrastructure are slowly decaying into obscurity as shiny, private health players enter the market. This is the same case within the education sector, cheap, private schools largely targeting the middle class are driving away resources and interest away from the public school system, which in its crippled state cannot justify a case to be the recipient of sub-national governments’ interest. Read More »

Ephemeral universalism in the social protection response to the COVID-19 lockdown in the Philippines

By Emma Lynn Dadap-Cantal, Andrew M. Fischer and Charmaine G. Ramos

Since March 2020, the Philippines has implemented one of the world’s strictest and longest lockdowns in response to the COVID-19 pandemic, which has caused severe disruptions in peoples’ livelihoods. The government’s emergency social protection response, the ‘Social Amelioration Program’ (SAP), has also been notably massive, introducing one-off near-universal income protection. It is an insightful case given that the country’s existing social assistance system has been celebrated as a model for developing countries, even though it has been mostly bypassed in the emergency response. Moreover, the country’s highly stratified and fragmented social policy system has resulted in implementation delays and irregularities that have fostered social hostilities and undermined the potential for such momentary universalism to have lasting transformative effects.

The Philippine government first imposed its ‘community quarantine’ on 15 March, which has since been extended until 30 June. Thus far, the pandemic has not been severe relative to evolving global indicators, with 302 confirmed infections per million people and 11 confirmed deaths per million people as of 25 June (although at only 5,760 tests per million people, these confirmed rates are likely to be significantly underestimated). However, as elsewhere in the Global South, the lockdown has thrown the country into an employment crisis given that more than 60 percent of its workforce is informal, most in precarious situations even when earning above the official poverty line.

In response, the government rolled out the ‘Social Amelioration Program’ (SAP), comprising at least 13 different schemes and with an estimated total budget equivalent to as much as 3.1 percent of the country’s GDP [1]. The largest scheme is the Emergency Subsidy Program (ESP), which has been allocated 200 billion Philippines pesos (PhP; about 3.5 billion euros), more than three times the combined budget of all the other schemes.Read More »

COVID in Pakistan, the Role of Middle-Classes and the Unprecedented Demand for a New Social Contract

Screenshot 2020-06-21 at 10.15.40

A conversation with and Dr. Juvaria Jafri and Dr. Aasim Sajjad.

Aasim Sajjad Akhtar is Professor of Political Economy at the National Institute of Pakistan Studies, Quaid-e-Azam University and a founder of the Awami Workers Party (AWP).  His research has focused on state theory, informality, colonial history, rise of the middle classes and social movements in Pakistan. His latest book is ‘The Politics of Common Sense: State, Society and Culture in Pakistan’.

 Juvaria Jafri is a Lecturer in International Political Economy at City University. Her research is on financial development in Pakistan, including inclusive finance, fintech, and impact investing strategies. Her latest co-edited book is ‘Geofinance between Political and Financial Geographies: A Focus on the Semi-Periphery of the Global Financial System.’

Introduction

The full impact of the COVID-19 pandemic on developing countries is still unfolding. While many countries have managed to achieve some stability in eliminating the spread of the crisis, others are struggling on various fronts. In South Asia, India has received much global attention owing to the violence of a hasty lockdown which was imposed without warning and an accompanying social safety net. Other countries in the region including Bangladesh, Srilanka and Nepal also continue to grapple with the existential question of how to ensure that contagion control does not come at the expense of destroying livelihoods. 

In this interview we focus on the situation in Pakistan. We invited Aasim Sajjad and Juvaria Jafri to address some questions related to the current situation in Pakistan. The following four questions were designed to provide a glimpse of how the pandemic is impacting the existing socio-economic structure of the Pakistani economy particularly focusing on class inequality, fin-tech as a potential solution and the activist and citizen-led first historic demand for a long-term welfare package. 

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