Sanderstølen, Norway
10 February 2001

Health Policies in the Global Economy, Energy Policy Foundation of Norway Conference

It gives me great pleasure to address this influential forum.

I have been invited to speak on the role of health in the global economy. My message is uncompromising: it is high time to expand our ideas about what determines economic growth.

Seventeen years ago, I was asked to chair the World Commission on Environment and Development. In the earliest stages of planning, I realized that we had to blaze a new trail. Our task was not just to set out facts – though good science was crucial. What we had to do was to establish a new way of thinking about the environment. A new way of thinking that would be accepted not just by activists – but by governments in the north and in the south, and by development agencies all over the world. That was no small job at a time when work on the environment was based on a policy which could be best described as clean-up-after-the-damage. Our goal was to make sure that the environment was no longer an afterthought, but at the leading edge of development policy.

Now it is time to turn the spotlight on health – particularly the health of poor people. Our challenge is to change the way the world thinks about health and development.

WHO's Commission on Macro-economics and Health is beginning to assemble some powerful evidence. It indicates that we have massively under-estimated the role that health can play in determining the economic prospects of the world's poor communities.

I believe we are now standing at the threshold of a major shift in thinking. Until recently, many development professionals argued that the health sector is only a minor player in efforts to improve the overall health of populations. And the overwhelming majority of finance officials and economists believed that health is relatively unimportant both as a development goal and as a strategy for reducing poverty. Health spending was seen as consumption rather than investment. But this is changing. Health may be far more central to poverty reduction than our macroeconomist colleagues previously thought.

Poverty breeds ill-health – that is nothing new. But we now know much more about how ill-health also breeds poverty, triggers a vicious cycle, hampering economic and social development and contributing to unsustainable resource depletion and environmental degradation.

Now we are learning that the reverse is also true: an even more powerful lesson.  Health gains trigger economic growth and, if the benefits of that growth are equitably distributed – this can lead to poverty reduction.

Think about it: in poor countries, it would take very little to increase life expectancy by addressing the main killers of children and adolescents. And yet a five-year difference in life expectancy may yield an extra annual growth of 0.5%. It is a powerful boost to economic growth. Modest improvements in health can help children, women and men to better achieve their potential, unlocking value in every area of their lives.

As in Europe at the end of the 19^th and beginning of the 20^th century, we have seen that developing countries which invest relatively more, and well, in their peoples health are likely to achieve higher economic growth.

In East Asia, for example, life expectancy increased by over 18 years in the two decades that preceded the most dramatic economic take-off in history.

A recent analysis for the Asian Development Bank concluded that fully one-third of the phenomenal Asian economic growth between 1965 and 1997 resulted from investment in people’s health.

Today, more and more economists and development specialists recognize that if public funds are carefully spent and lead to improvements in people's health, they represent an investment in any country’s prime asset: its people. Developing country leaders -from Africa, central and South Asia and Latin America, maintain that if the world’s poorest countries are to have any chance of catching up with the rest, they need to invest in health. The stewards of the global economy - in the World Bank and IMF, and in the treasuries of the richer nations, are reaching the same conclusion.

There are several reasons for this recent shift in thinking. One is the growing recognition that our world is turning into a two speed global society: perhaps a billion people are enjoying unprecedented prosperity and advantage, while nearly half are living on less than $2 per day and have extremely limited prospects for prosperity. Another is the realization that this perpetuation of poverty and deprivation creates an insecure world for us all. A third is new evidence on the ways in which frequent and severe illness keeps poor people and their societies poor, and prevents them taking advantage of opportunities to earn, to learn and to have a better life.

Poverty leads to illness; illness leads to poverty. One reinforces the other.

Recent evidence shows how disease undermines economic progress. Consider the burden of HIV infection. HIV prevalence rates of 10-15% - which are no longer uncommon - can translate into a reduction in growth rate of GDP per capita of up to 1% per year. TB, which is exacerbated by HIV, takes an economic toll equivalent to $12 billion dollars from the incomes of poor communities.

Africa's GDP would probably be about $100 billion higher now if malaria had been tackled 30 years ago, when effective control measures first became available. Even today, half a billion cases of malaria each year lead to the loss of several billion days of productive work: we do not need to accept this continuing inequity when we have access to measures that will reduce the impact of this disease on poor populations.

The economic burden of Tuberculosis infection in India alone is $300 million annually. Some 100 million work days are lost due to TB, and one third of the total economic impact of TB is incurred by those who suffer from the disease. Most of them are poor and they can ill afford this extra burden .

The World Bank has shown that the economic costs to society resulting from tobacco-related disease by far outstrips the gains from tobacco production, sales and taxes, even in large tobacco producing countries like Zimbabwe and Indonesia.

Illness does not respect national boundaries. The patterns of globalization that promote increasing inequities will encourage the spread of illnesses - particularly those which are associated with extreme poverty. In the modern world, bacteria and viruses travel almost as fast as money. With globalization, a single microbial sea washes all of humankind. There are no health sanctuaries.

The separation between domestic and international health problems is no longer useful, as over two million people cross international borders every single day. A tenth of humanity each year.

The Government of the United States has declared that the global epidemic of HIV/AIDS is a national security threat. Russia's people, and those in neighbouring countries, are seriously concerned with the rapid spread of multidrug resistant tuberculosis: governments and partners are doing their best to respond.

It is not only the infectious diseases that spread with globalization. Changes in lifestyle and diet prompt an increase in heart disease, diabetes and cancer. More than anything, tobacco is sweeping the globe as it is criss-crossed by market forces. Only weeks after the old socialist economies in Europe and Asia opened up to Western goods and capital, camels and cowboys began to appear on buildings and billboards.

New global health emergencies arise with little warning. The issue of BSE and its link with Creutzfeldt-Jakob disease has led to a global emergency within a period of a few months. None of us knows the final cost of BSE and the threat it carries of Creutzfeldt-Jakob disease, but it looks likely to run in the order of several tens of billions of dollars. It will certainly be associated with several ministerial resignations and crises for more than one government.

You do not need me to remind you about the political significance of environmental hazards. Air pollution, both outdoor and indoor, is one of the most serious: it is also a serious energy policy issue.

WHO estimates that close to half a million people are dying prematurely world-wide from exposure to air pollution, much of it linked to increased car density. In many Asian cities there has been an explosive rate of growth, by as much as 600% during the last two decades.

The woman bending over her oven, inhaling hazardous smoke from the wood it burns experiences a high risk of respiratory illness: higher still if tobacco is being smoked in the home. The health of the child she carries on her back is also in danger. The link is being examined by the World Health Organiation, and is already leading to policy recommendations on the need to promote cleaner forms of cooking and heating.

I have focused on lessons from the past, but our collective future depends on actions we take now.

There are two sharply different scenarios, and the direction in which we go depends on the political backing for firm global action.

The first scenario is truly horrendous. The incurable illness caused by HIV has already infected 36 million people in our world, and could still bring about devastation that far exceeds our most pessimistic expectations. The number of people infected with HIV doubles every year in Russia. HIV infection has progressed from a disease experienced mostly by the country’s intravenous drug-users to joining tuberculosis as one of the country's largest public health threats.

India could well be the scene of the next explosive increase in HIV infections: the pessimistic projection is that it will supersede what we have experienced in Africa over the past decade. China is also under threat of a major epidemic.

Climate change as a result of global warming is already breaking down century-old borders for malaria, spreading the disease into areas which have been free of the disease for decades or may never before have been under threat. Increasingly, malaria parasites are becoming resistant to commonly used and inexpensive medications.

Climate change may also be linked to the recent increase in violent weather patterns with a growing number of natural disasters bringing death and destruction in their wake.

The combination of pollution, lack of sanitation, the growing migration from the countryside to the cities and extreme poverty, have made many of the cities in the developing world extremely dangerous to the health of those who live there. One of my staff members who until recently lived in a well-to-do area in Manila – one of the great urban centres of Asia – saw both his children infected by TB and some of their neighbourhood children die from dengue fever.

In addition, developing countries must deal with the double burden caused by increasing levels of noncommunicable diseases. This is brought about by rapid changes in lifestyle and eating patterns. Urbanising developing countries will increasingly have to cope with the cost of treating cancers, diabetes and heart disease, as well as a growth in mental illness.

Tobacco, is of course, the cause of most heart and cancer-related diseases. If the growth in tobacco use goes unchecked, the numbers of deaths related to its use will nearly triple, from four million each year today, to 10 million each year in thirty years. Practically the entire growth in tobacco-related mortality, more than 70% of these ten million deaths, will take place in developing countries.

If we do not act positively, with courage and resources, the gap between the three billion who live on less than $2 per day and the rest of us will increase. It will also threaten the economic development of large parts of the world – and in doing so affecting both the prosperity and the political and military stability of our whole world.

But globalization does not have to lead to human insecurity. Nor does it have to contribute to inequity. There is a real alternative. It calls for powerful political leadership, that encourages joint working by governments, civil society and the private sector. We must commit to strategies that make the extraordinary forces of globalization work for the good of all, and not just a select few. By this I do not mean isolated acts of charity - the occasional corporate donation, the shrinking aid programmes of the last decade or charity projects that scratch the surface. We need a strategic long-term programme: building on experiences of effective development programmes but putting people's interests at the fore.

Together with other UN agency heads, I proposed last year that we take account of the increasing international concern about the negatives of globalization. I would propose a strategic programme that is dedicated to investment in equitable human futures. This means giving much more weight than ever before to social outcomes - such as good health or education. It means examining their distribution throughout society.

To achieve the health outcomes that matter most to poor people, we need to increase the likelihood that all people can access essential health care and benefit from healthy public policies. We do have effective mechanisms and interventions that will help all people to achieve their full potential

A number of health interventions can dramatically reduce mortality from the diseases that are the greatest threat to poor people. Supervised treatment regimes for TB; nets impregnated with insecticide against mosquitoes, and wide distribution of malaria treatment among children and pregnant women; prevention programmes for HIV/AIDS – or better access to the kinds of health care programmes that can substantially slow the mortality among those living with HIV. There are many more interventions, proven to be effective on a local or national level.

We have seen malaria deaths being cut down by more than 90% over the space of a few years in Vietnam. We have seen Uganda and Thailand reverse the spread of HIV infections. We have seen Peru cut TB infections by half in a decade.

Quite simply, if we can take these intervention to scale – and by that I mean to a global scale – we have in our hands a concrete, result-oriented, and measurable way of reducing disease – and in doing so, starting to reduce poverty.

To make this happen we need a massive increase in effective action within countries. We must also do more to ensure that terms for international trade favour poor people's interests, and that local markets for health care reflect the needs of poor people as well as those who are better off. We see private sector initiatives resulting in greater access to some essential medications - for HIV care and malaria, river blindness and filariasis - in many developing countries. We are also witnessing imaginative public-private action to stimulate pro-poor markets for health services and commodities - especially for reproductive health, malaria control and child care - for example, in Tanzania and Cambodia. In April WHO will join WTO and the government of Norway in a landmark meeting to establish options for a sustained increase in poor people's access to essential on-patent medicines through tiered pricing.

We will continue to work with academic institutions and the private sector to encourage innovation that reflects the interests of poor people, through investing in the development, marketing and distribution of public goods - such as diagnostic tests, vaccines and drugs. During the last two years WHO has participated in ventures that develop medicines and vaccines for malaria, tuberculosis, HIV infection and sleeping sickness.

Equitable health outcomes call for concerted action - by both civil society and the State: that is why we have sponsored broad movements in many countries to eradicate polio, roll back malaria, stop TB, and make pregnancy safer. These movements are underway in countries affected by emergencies and conflict as well as those with stable governments. They call for reliable assessments of the extent to which poor people benefit from the health systems with which they are in contact. So, we also focus on assessments of the extent to which people benefit, and comparing performance of health systems from district to district, from country to country.

We judge our impact on the extent to which strategic support for equitable human futures results in all people being able to access preventive quality services and medications for the sicknesses that cause the greatest threats to their well-being.

We know that if they can, their chances of prosperity increase. This increases prospects for the economic development of their communities and nations.

These investments in healthy futures will call for investments on a scale we have not yet seen for health in developing countries. We estimate that we will need between five and ten billion dollars per year over at least a decade to achieve the targets that were set at the Millennium Summit last year of cutting malaria and TB deaths by half and reducing new HIV infections by 25% within a decade.

You, who are used to consider large investment costs, know that these are not unrealistically high sums. They represent for example less than the total costs of the recent round of mobile phone licences in some European countries.

We are beginning to see Governments start to make increasing commitments, as bigger sums are starting to become available. We are beginning to see pharmaceutical and other companies work with the public sector to reduce costs of medications for poor communities. We see new public-private partnerships for developing new products that benefit poor people.

Now the next challenge is to get these innovations to those who need them: for governments and international agencies to work together and disburse large investments for effective action. Systems need to be effective - even in countries with underdeveloped public sectors and weak health systems.

New partnerships for health are being developed among G8 countries and within the European Union. They draw on inputs from developing nations, international agencies and academic institutions, to find new and effective ways to fight diseases that cause or perpetuate poverty.

They take the form of informal networks, such as the ongoing initiative to improve access to care for people living with HIV which involve pharmaceutical companies, governments and international agencies, or of more formalized structures, such as the Global Alliance for Vaccines and Immunization, supported by the Gates Foundation and the Norwegian and Dutch governments.

In some cases we may even need to argue for international regulation of global negatives. In the health field we are already progressing - through the ongoing negotiations for an International Framework Convention on Tobacco Control.

Clearly globalization is about much more than trade. It is about communicating with an infinite variety of new people, of relating to them – and therefore also getting involved in their lives and their problems. If we are to believe the commitments made over the last few years at the World Economic Forum in Davos, it is clearly in the interest of the private sector to support the reduction in poverty and inequity among people in developing countries.

The company which sets up a production plant in Indonesia or Peru may do so based on an evaluation of economic opportunities, but it will soon find itself having to relate to the political, social and economic reality of the country it has chosen to invest in.

One large engineering company ran an advertising campaign saying that being global meant being local world-wide. It is right. Companies which show commitment to the countries and communities they work with find that their standing among people – ranging from prime ministers to their own work force – improves. So does productivity.

Many companies are already following this broad view of their role and responsibility in the countries where they invest. One private sector collaboration I would particularly like to mention for this audience, is that of the Italian petroleum company ENI. Being one of the main companies exploiting the large oil reserves of Azerbaijan, it is working with government and civil society in that country, helping people to reduce the risk of malaria infection and increasing their access to effective treatment.

To sum up, we are getting a better sense of economic costs of ill health today. They are enormous. But the true political cost of illness must take account of the future, of what happens to coming generations. Resulting from lost income. From teachers who die. From enterprises that fail due to workers’ ill health. From impaired ability to earn and learn. The list goes on and on. But it should not. It need not.

Investing in human futures calls for political commitment - not out of moral duty or obligation, but with a clear purpose that is based on scientific evidence. It must be a conscious series of decisions, stimulated by civil society, backed by national governments, and driven by enlightened self interest.

This will take unconventional means and bold action from world leaders. We must make this work for our common future.

Thank you.