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Financial crisis and global health

HE Maria Farani Azevêdo
Ambassador, Permanent Representative of Brazil, Permanent Mission of Brazil to the Office of the United Nations and other International Organizations

Remarks at the high-level consultation on the financial crisis and global health

Previous speakers have already made the point that we are dealing with a widespread global economic crisis. Some will suffer more than others, but all will be affected. There is a general understanding that: economic growth will fall; export revenue will decrease; unemployment will increase; and incomes will fall. Therefore, investment, financing and aid for health may be negatively affected. We have to work to avoid this crisis also becoming a social and health crisis. The event here today inscribes itself in this context, and I want to commend Dr Chan for her initiative: she is always ahead of the curve.

Since this is a health-related panel, I can say that the diagnosis is known. We need to focus on the treatment, or treatments, since the disease is affecting some more than others. Developing countries' health systems, for example, will be affected. And this is because resources in these countries are already scarce. The poorest among the poor, for instance, spend around US$ 16 per capita on health, while the richest among the rich and industrialized countries spend up to US$ 2600 dollars per capita.

A recent OECD study points to “strong slowdowns” in seven major economies, as well as in some emerging non-OECD countries, but let me address the case of Brazil. According to this OECD study, the Brazilian economy will suffer some growth deceleration, as opposed to the “strong slowdowns” in other countries. Brazilian exports are diversified in terms of partners and products; the domestic market is large and still has some purchasing power. Credit is still available. The economy has undergone a large period of stability. If things stay the same, Brazil will probably be in a somewhat shaky but manageable situation. Some analysts say that it is still possible for the economy to grow around 3% in 2009, a still healthy figure by Brazilian standards.

Although, Brazil is today undoubtedly more resistant to external shocks than in previous times, we are already being hit by the crisis. We are witnessing lay offs and industry is resorting to collective vacations. But the Government is acting fast to diminish the impact of the crisis and has announced some fiscal measures to stimulate the economy. President Lula da Silva has also announced that our Growth Acceleration Programme will be maintained. This is an ambitious programme which mandates investments of US$ 270 billion in infrastructure. Out of that amount, almost US$ 90 billion will be in the social area, particularly in the building of hospitals and the construction of urban and rural sanitation and electrification, which will have positive health effects.

The Brazilian Government firmly believes that health-related activities are important to the economy as a whole. They create jobs, foster innovation and contribute to a virtuous economic cycle, including poverty reduction and social development. The Brazilian commitment to invest in the health sector is a constitutional obligation. The 1988 Constitution establishes that: "… Health is a right of all and a duty of the State and shall be guaranteed by means of social and economic policies …”. In the face of the financial crisis of the 1990s, this constitutional obligation did not prove to be sufficient. After that dramatic financial crisis, Congress approved a constitutional amendment to guarantee stability and increase resources to the health sector. In times of crisis, of course, investment may fall, but the fact of the matter is that we have learned our lesson and after the crisis of the 1990s, we found ways to bring some predictability to investment in health, which became compulsory. Health care today is universal and free in Brazil. Federal, state and municipal authorities are obliged by law to invest in health. The free services provided by of our universal health service range from vaccination to organ and tissue transplants.

In Brazil, investments in the health system are complemented by social policies. Our income-transfer programme (“Bolsa Família”) distributes benefits to 11 million poor families nationwide. To be eligible, mothers must get prenatal care and parents must keep their children in school and vaccinated. Brazil does not have the answer to every challenge in the health area, but we do have several success stories and these experiences are already being made available to other countries in Latin America, Africa and Asia facing similar challenges. Fiocruz, our renowned health institute, whose president is here today (Dr Paulo Buss), is very active, sharing experiences in Africa and elsewhere.

President Lula pointed out recently and I quote: “no country will escape the crisis on its own”. His observation helps me to introduce the concluding part of my remarks: how to mitigate the effects of the financial crisis in the health sector. First, we have to remember, and make governments and civil society very much aware, that investment in health is investment in people. Secondly, cooperation is critical to overcome the crisis and some countries will be hit more than others, so let us share experiences and solutions; we have to be able to find speedy responses to immediate challenges. Thirdly, it is time for solidarity; official development assistance cannot diminish, nor be delayed. These are times when aid is most needed, for aid-dependent countries will be badly hurt. Their national budgets are already strained; remittances (often, the main source of revenue) will diminish as unemployment hits rich countries. Remember: the financial crisis comes in the wake of a food and an energy crisis. These hit poor countries the most. Fourthly, WHO’s role is to monitor the effects of the crisis on health; to increase awareness of the dangers of shrinking budgets and investments in health systems; and to advocate, including to the private sector, more means to invest on health. Above all, WHO’s programmes, in times of crisis, should target the most vulnerable. Fifthly, special attention should be give to fatal diseases; medicines could not fail to be made available to those threatened by death and industries as well as governments should contribute;. We should resort to all means, including existing legal frameworks in the area of intellectual property.

Lastly, we must act on all fronts: national budgets; international resources; official development assistance; innovative sources of financing; coordination between United Nations agencies; cooperation between countries; partnership between industry and governments; and an international pact, be it binding or not, for the maintenance of investments in health should be pursued. Let us take lessons from this crisis and look for ways to reduce dependency and build sustainable health systems.