Science

Policies Mandated by Multilateral Institutions Are Contributing to India’s COVID Catastrophe

After devastating India’s cities, COVID-19 is now ravaging the country’s hinterlands. Over half the new infections and deaths in the country are being reported from rural areas. In the small village of Shertha in the western Indian state of Gujarat, for instance, 64 persons lost their lives this April, many because they failed to access timely medical care and essential supplies like oxygen. When villagers summoned an ambulance through a state-run helpline, it typically took three days to arrive; at times, its siren was heard long after the patient was dead. “The situation is much worse in other villages of Gujarat, which have reported as many as 100 deaths each,” Gulab Thakur, chairperson of Shertha’s village council, told Scientific American over the phone. “Every village here is facing the same devastation.”

When the pandemic resurged in India earlier this year, hospital corridors in even the capital city of Delhi, which normally provides its residents with some of the best health care in the country, were packed with patients. Many hospitals turned sick people away, owing to an acute paucity of beds, oxygen, medicines, ventilators and other essentials. Funeral pyres were erected in parks, parking lots, pavements and other empty spaces to keep up with the rocketing deaths. Although the numbers seem to be declining now, on August 15 alone, the country reported around 33,000 new infections and 417 deaths—almost certainly an undercount.

Given these horrors, the spread of COVID-19 in rural India is especially disturbing. The region is home to roughly two thirds of the population, or 895 million people, but has only a quarter of the country’s health infrastructure, including hospitals and medical personnel. This imbalance is largely a consequence of the privatization of India’s health care sector in the 1990s, when the country, reeling from a debt crisis, accepted structural adjustment loans from the World Bank and the International Monetary Fund (IMF), multilateral financial institutions in which governments are members. The loans came along with mandatory “conditionalities” in fiscal and economic policies. These included financial and trade liberalization and deep cuts in social spending—especially in health care and education. 

The structural adjustment program (SAP) sparked rapid economic growth, but also ensured that most of the gains would go to the wealthy, exacerbating social and economic inequalities. In effect, the international financial institutions demanded that India lower the standard of living of the bulk of its people. Thus, economic liberalization meant the abandonment of poor and rural Indians to competition-driven market forces that deprived them of affordable health care—while rich Indians got access to world-class health care. The policy prescriptions commodified health services, transforming them into a private good instead of a basic human right. Public-health spending, already a miserly 1.5 percent of India’s GDP in the late 1980s, declined to 0.6 percent in the 1990s. During the fiscal year 2020–2021, and despite the pandemic, India’s health budget stood at an appalling 0.34 percent of its GDP.

The reduction in public-health spending meant that state-funded health care facilities were starved of funds. Many hospitals have been built in recent decades, but they are mostly private and  concentrated in urban areas. In consequence, rural India has only 3.2 beds in government hospitals per 10,000 people, whereas urban India has 11.9 beds per 10,000 people. Rural India also suffers from an acute deficit in the numbers of health care providers because of unfilled posts in government hospitals, where salaries are much lower than in the private sector: surgeons (shortage of 83 percent), obstetricians and gynaecologists (76 percent), physicians (83 percent), and pediatricians (82 percent).

Government-run hospitals also often lack essential equipment, such as ventilators, ambulances, pulse oximeters, medicines and oxygen cylinders, among others. In a village in the north Indian state of Uttar Pradesh, for instance, 45 succumbed to COVID-19 in April amid a lack of medical support and oxygen. In some areas of the western Indian state of Maharashtra, the death rate in government-run COVID-19 hospitals is 3.8 times higher than in private facilities.

The economic reforms also meant that the poor would have to pay for medicines, bandages and other supplies, even in publicly funded facilities. In accordance with SAP conditionalities, the Indian government introduced “user fees” in public hospitals. The World Bank’s 1993 position statement on health care, “World Development Report: Investing in Health,” explained that people paying for their own health care, in the form of user charges and prepaid insurance schemes, had “become a practical necessity” in a number of low-income countries and could help improve the quality and reliability of services. But many of the rural poor cannot afford user fees, which have reduced admission rates in hospitals.

Even as it slashed spending on public health, the Indian government boosted privatization—-another World Bank–IMF conditionality—by offering many subsidies in the form of land and decreased import levies to encourage the expansion of private medical facilities. The reforms spurred the rapid growth of the private sector, which currently accounts for 62 percent of India’s health infrastructure. In addition, nearly 60 percent of hospitals, 80 percent of doctors and 75 percent of pharmacies are located in urban areas, where those who can afford these services reside. Even before the pandemic, this disparity had contributed to the shortening of villagers’ lives by four to five years as compared with their urban counterparts.

The privatization of India’s health care not only had an overarching impact on the health of rural Indians; it also meant economic calamity for many poor and lower-middle-class families should a member get seriously sick or injured. With private facilities that (mostly) provide effective health care flourishing even as public ones decayed, 72 percent of Indians from rural areas and 79 percent of those from urban areas use private hospitals and other private health services.

But private health care costs four times more than public health care in India. In the fiscal year 2011–2012 alone, 55 million Indians fell below the poverty line because of out-of-pocket health expenses. Making matters worse, economic reforms percolated to the pharmaceutical industry with the Drug Price Control Order of 1994. Thereafter, most drugs were free from statutory price control, leading to a steep rise in drug prices. In 2011–12, 38 million Indians were impoverished by expenditure on medicines alone. In sum, according to a 2017 survey of 184 nations, Indians, with 65.6 percent private expenditure on health, stood sixth among the biggest out-of-pocket health spenders in the world. This, despite the fact that around 22 percent of Indians still live below the poverty line, defined in U.S. currency terms at $1.90 a day.

Poorer Indians are not alone in reeling from the health impact of the neoliberal economic recipe. Between 1980 and 2014, 109 out of the 137 developing countries in the world entered at least one SAP mandated by the IMF and the World Bank in exchange for loans. As in India, these policy changes have had adverse effects on the health care systems on vulnerable populations in a host of these countries. Almost all experienced declines in wages, increased income inequality, rises in infant and maternal mortality, and increase in malnutrition. A 2016 review of structural adjustments in 16 West African nations found that such conditionalities “impede progress toward the attainment of universal health coverage.”

In Zimbabwe, after the introduction of user fees, maternal mortality rose from 90 per 100,000 live births in 1990 to 168 per 100,000 in 1993. In Mexico, which received loans from the World Bank in 1997 to privatize its social security system, public sector organizations faced budget reductions that eroded health care services and left millions without insurance. Weakened health systems in West African countries, largely a fallout of structural adjustments, also thwarted their response to the Ebola epidemic.

The impacts of SAPs on the world’s poor populations have only compounded over the past decades. The ongoing pandemic has exposed the most lethal fault lines of these policies, which, with their enduring legacies, have also contributed in marring their fight against COVID-19. In Cameroon, for instance, structural adjustments increased poverty, and 37.5 percent of its population now lives below the national poverty line. This has hampered the nation’s COVID-19 response, as low-income populations cannot practice measures like social distancing and are compelled to leave their homes to feed their families. In Ecuador, meanwhile, IMF-promoted austerity has become a “vector for the health, economic and social crises” of COVID-19.

The world, especially developing countries, would have been better prepared for the pandemic if international institutions had promoted the health guidelines laid out in the Alma-Ata Declaration of 1978 in lieu of focusing on free-market systems. The declaration recognized health as a fundamental human right. Noting the “gross inequality” between developed and developing countries with respect to the health of their citizens, the declaration insisted on robust deployment of the world’s resources to bridge the health equity gap by allocating appropriate funds to primary health care.

“All governments should formulate national policies, strategies and plans of action to launch and sustain primary health care as part of a comprehensive national health system and in coordination with other sectors,” the declaration, signed by 134 national government members of the WHO, stated. “To this end, it will be necessary to exercise political will, to mobilize the country’s resources and to use available external resources rationally.”

The World Bank–IMF’s approach, however, seems to have ignored the primary health care systems promoted by the Alma-Ata Declaration in favor of free-market principles. The repercussions of this fatal rebuttal are now evident in villages like Shertha. According to Thakur, the village head, there are about 18 private hospitals around his village and only one government-run hospital. “Villagers trust private hospitals more, despite the expensive care. However, most are unable to afford them,” Thakur told me, “Those who cannot afford private hospitals, they either forgo medical care, try to cure themselves at home, or succumb.”

This is an opinion and analysis article; the views expressed by the author or authors are not necessarily those of Scientific American.

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