THE IMF, STRUCTURAL ADJUSTMENT AND HEALTHIN THE CARIBBEAN: A Comparison With Brazil

DAPHNE PHILLIPS Ph. D

Department of Sociology

The University of the West Indies

St Augustine, Trinidad

Trinidad and Tobago

West Indies

Paper prepared for the 18th Annual Conference of the Caribbean

Studies Association to be held in Kingston & Ocho Rios, Jamaica, May

24 -29, 1993.

THE IMF, STRUCTURAL ADJUSTMENT AND HEALTH

IN THE CARIBBEAN: A Comparison With Brazil

ABSTRACT

In this study, an assessment of the impact of Structural Adjustment

policies on the living conditions of people in the Caribbean is

undertaken through observation of the trends in employment,

income, education, nutrition, housing and water supply in the decade

of the 1980s. A comparative analysis is carried out on the effects of

similar policies on identical living conditions in Brazil in the

previous decade. The data show similar patterns of decline in living

conditions for the Caribbean in the 1980s as for Brazil in the 1970s.

For the Brazil study, through the use of multiple regression

techniques on survey data collected in 1990, the relative impact of

these living conditions on health is measured. The results show that

while nutrition has the greatest impact on health, all the other

influencing variables examined significantly affect the health

status of the people.

In conclusion, I argue that if declines in living conditions result in a

measurable decline-in health status, then the declines in these

conditions observed in the Caribbean in the 1980s have negatively

affected health. This negative effect on health is exacerbated

further by the simultaneous cuts in health spending and the gradual

privatisation of health care services observed in the Caribbean.

ACKNOWLEDGEMENTS

The survey data for Brazil used in this analysis were collected

in 1990 for a study funded by the Institute of Health,

Department of Health, Government of the State of Sao Paulo,

Brazil. The principal researchers were Raymond and Karen

Goldsteen of the University of Illinois at Urbana-Champaign. I

thank the Goldsteens for the use of these data.

THE IMF, STRUCTURAL ADJUSTMENT AND HEALTH

IN THE CARIBBEAN:

A Comparison With Brazil

Introduction / Review of the Literature

In the 1980s, the policies of the International Monetary Fund (IMF)

were introduced into developing countries on a large scale, as the

response of the core industrial countries and large international

banks to the massive balance of payments problems that were being

experienced by developing countries. The balance of payments crises

affecting many countries force them to turn to the IMF for loan

assistance.

The IMF was created at the end of the second World War as a result

of an international and monetary conference held at Bretton Woods,

New Hampshire in July 1944, to assist countries which experienced

temporary balance of payments problems as a result of destruction

brought about by the war. These were mainly European countries, and

the assistance provided was particularly generous in helping them to

rebuild their economies and societies. In the 1980s however, in the

wake of the massive balance of payments problems experienced in

developing member countries,

the IMF restructured its lending policies.

The new policies, called Structural Adjustment Policies, were very

much unlike the assistance given to European countries with balance

of payments problems at the end of the second World War. These

policies were punitive and destabilizing and led to declines in the

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decision making capacity and relative autonomy of the local state.

These IMF policies of Structural Adjustment, which have been

compulsory for developing societies requiring loans for addressing

balance of payments problems, involved reduced public sector

spending and participation in economic activity, an increase in

exports, increased inflation, devaluation of the currency and the

introduction of measures to attract foreign capital.

In more specific detail, these measures have meant reductions in

government expenditure and the size of the public sector; an end to

the creation of new public enterprises and rationalization and

privatisation of those already in existence; higher interest rates to

discourage capital flight; removal of trade and exchange controls;

reduction of effective protection against imports; tax reform to

introduce a higher tax structure, and higher prices for agricultural

producers, especially exporters.

Liberalization of trade and the encouragement of exports are

important goals of the structural adjustment package. These are

brought about by the introduction of measures such as devaluation,

the establishment of quotas and quantitative restrictions, and the

introduction of a uniform external tariff rate. Other elements of the

package consist of an increase in producer prices, reduction of the

wage bill, wage freezes, declines in real wages and salaries, and

reduction or elimination of fringe benefits, labour welfare and other

protective measures. The insistence on privatisation of economic

activities has involved the closure or sale of state enterprises in

2

directly productive and financial sectors, the reduction or

elimination of state marketing agencies and a series of incentives

for foreign investors (Ghai,1991).

These policies are based on a number of assumptions: firstly, there

is the general assumption that excessive expenditure by the state,

particularly where it takes the form of introducing higher levels of

consumption, rather than production, should be reduced. Secondly,

reduction in state spending is assumed to be necessarily associated

with a reduction in wages; thirdly, it is assumed that the cuts in

wages and services will reduce imports. However, they also lead to

increases in the profits of the private sector since private

capitalists subsequently have to pay lower taxes and reduced labour

costs. Finally, the attempt to discourage direct controls over trade

is assumed to enhance the local economy, but this influences the

previous tendency to use the rate of exchange to favour local as

opposed to foreign producers (Brett,1983).

In an attempt to increase their exports, lesser developed countries

immediately confront the core capitalist countries which are

attempting to do the same thing; the latter have the advantage of

producing on a very large scale, selling to a huge home market as

well as controlling established markets abroad, having direct use of

highly trained work forces and research facilities and monopoly over

areas of technology and skills. Lesser developed countries cannot

compete effectively in these conditions.

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On the other hand, in sectors where lesser developed countries do

have a competitive advantage, where cheap labour provides the

possibility of employment to larger sections of the populations such

as in textiles, the core industrial countries have tended to adopt

protective controls in order to defend jobs and capital investment in

those sectors (Brett,1983). In the textile sector in poor countries

therefore, jobs are not available to the extent to which this may

have been possible.

The rescheduling of debt and debt service as well as the granting of

new loans have been made contingent upon acceptance of the policy

package of structural adjustment measures outlined above, thereby

paving the way for a degree of external intervention in national

policy-making unprecedented in the post war period. The strong

insistence upon eliminating barriers to free trade in these

countries, as well as reducing the role of the state in the economy

has run directly against and counteracts the efforts of Latin

American, Caribbean and African governments to foster greater

national economic integration within a framework of protection for

local industry (Ghai,1991).

Research Questions

The questions posed in this paper are:

1. Have structural adjustment policies affected living conditions in

the Caribbean?

2. What are the effects of living conditions on health status?

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3. What are the effects of Structural Adjustment policies on health

in the Caribbean?

Methodology

The methodology employed to answer these questions involves

firstly, a comparative analysis • between the effects of Structural

Adjustment policies on living conditions in the Caribbean, and the

effects of similar policies on living conditions in Brazil. Secondly,

I measure the effects of living conditions on health in Brazil (for

which recent survey data is available). Thirdly, I infer similar

effects of living conditions on health in the Caribbean. Finally I

argue that if Structural Adjustment policies have led to a decline in

living conditions, and living conditions have a noticeable and

measurable effect of health, then Structural Adjustment policies

have led to a decline in health status.

The living conditions used in this study are those of income,

employment, education and other social services.

Effects of Structural Adjustment on Living Conditions in

the Caribbean

Many sources clearly indicate a real decline in living conditions in

Latin America, the Caribbean and African countries since the

universal introduction of IMF structural adjustment policies in 1980

for peripheral capitalist countries.

5

Income

The following Table on economic changes in Latin America and the

Caribbean highlights declines in income and resources - from both

resource loss due to deterioration on the terms of trade and lower

levels of imports (both by volume and per capita measures)

coexisting with a huge effort to improve the volume of exports. The

overall conditions of living have nevertheless deteriorated.

Table 1 Changes in Economic Indicators. 1980 - 1988,

Latin America and the Caribbean

(Accumulated Percentages)

GDP per capita -6.6

Income per capita -16.0

(loss due to terms of trade) (-3.0)

(loss due to resource transfers) (-6.0)

Export volume +56.0

Export per capita +36.0

Import volume -13.0

Imports per capita -33.0

1978-1979 1987-1988

Ratio of interest payment to

exports of goods and services 16.7 -28.9

Resource transfers as percentage

of goods and services 22.5 -20.5

Rate of inflation (percentage) 46.0 336.0

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Source : "The Crisis of the 1980s in Africa, Latin America and the

Caribbean : An Overview." D. Ghai and Cynthia Hewitt de Alcantara, in

The IMF And The South, D. Ghai (editor), Zed Books Ltd.,

London,1991.

Table 1 shows that income per capita declined by 16 percent

between 1980 and 1988 for Latin America and the Caribbean. At the

same time, inflation increased by 630 percent over the ten year

period 1978-1988. This means that there were declines in the

ability of people to provide the levels of food and other basic

necessities which they could have done prior to 1980.

It is evident from the Table that the deterioration in the terms of

trade contributed approximately 3 percent, and the shift in net

external resource inflows added another 6 percent to the 7 percent

decline in income per capita between 1980 and 1988. At the same

time, the volume of exports grew by 56 percent or 36 percent per

capita, while imports by volume declined by 13 percent or one third

on a per capita basis (Ghai & Hewitt de Alcantara, 1991). Despite

this huge sacrifice by the population, the ratio of interest payments

to exports of goods and services grew by over 100 percent -

reflecting an incremental worsening of living conditions.

By the end of 1989, in the Caribbean, the gross domestic product per

capita had fallen below the level it had attained 13 years before

(ECLAC , 1990, p. 11). The national economies lost momentum at

differing rates, as evidenced by a pronounced decline in the

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coefficient of net investment, from almost 23 percent to 16.5

percent between 1980 and 1988 (ECLAC, 1990, P. 38). Latin America

and the Caribbean as a region had become net exporters of financial

resources. It was estimated that over the period 1980-1988,

accumulated net transfers, in which excessive indebtedness was a

deciding factor, reached more than US200 billion dollars (ECLAC,

1990, p. 47).

Employment

Other indicators of the crucial social situation are the increase in

unemployment, under-employment and self employment; the

increasing tendency for productive employment to move into the

'informal' economy with deterioration in the level and stability of

income, and increase in employment in small or family business and

in micro business many in the informal sector (UN Development

Fund). There was widespread deepening of poverty and especially

poverty. among females.

Social- Services

Public sector spending on all social services ( such as education,

health, housing and social security) declined in those territories

which had implemented Structural Adjustment policies before 1985

(such as Jamaica) but remained relatively constant or increased in

those countries which had not yet implemented these policies as

shown in Table 2.

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Table 2 Social Service Spendingl Caribbean - 1980 - 1985

Country

(Percentage of all spending)

1983 1984 19851980 1981 1982

Bahamas 7.1 7.7 7.9 8.2 7.8 7.7

Barbados 16.3 16.6 14.3 13.8 14.9 15.6

DominicanRepublic 5.4 5.5 3.2 3.1 2.9 2.7

Guyana 11.6 14.1 16.5 15.6 14.4 16.2

Haiti 2.2 2.3 2.8 2.3 2.3 2.2

Jamaica 14.0 15.5 14.4 13.8 10.4 9.5

Trinfrobago 8.8 9.2 12.2 13.1 13.7 14.0

Venezuela 8.3 9.4 10.0 9.8 9.4 9.8

1. Including education, health, housing, social security and othersocial services.

Source : Modified from Bank of International Development,Washington. D.C. 1988. Cited in ECLAC, 1989.

Education

Table 3 shows that, with the exception of Trinidad and Tobago,

spending on education declined for all territories for which data is

available by 1987 when many more countries had implemented

Structural Adjustment policies.

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Table 3 Education. Public Sector Spending as a Percentage of all Spending1981 - 1987 (Percentages)

Country 1981 1982 1983 1984 1985 1986 1987

Bahamas 4.1 4.2 4.4 3.9 3.8 3.9 n.a

Barbados 7.0 5.9 5.7 6.3 6.4 5.8 5.9

Dominican Rep. 2.2 1.9 1.8 1.7 1.5 1.4 n.a

Haiti 1.1 1.2 1.1 1.0 1.0 n.a n.a

Jamaica 7.2 7.2 7.3 5.7 5.3 n.a n.a

Trinidad/Tobago 2.4 4.1 4.3 4.7 4.9 5.5 5.6

Venezuela 5.1 4.6 5.0 4.3 4.9 4.5 n.a

Source : Modified from Bank of International Development,Washington. D.C. 1988. Cited in ECLAC, 1989.

Although the level of spending on education in Trinidad and Tobago

did not decline up to 1987, Table 4 shows that there was no

improvement in the percentage of students completing secondary

education in 1986 as compared with 1975, while Table 5 shows a

decline in young persons with tertiary education in Trinidad and

Tobago, Jamaica and Guyana in 1981 as compared with 1975. The

trend indicates that by the 1990s the percentage of persons exposed

to education at all levels is lower than in the 1970s for all

territories.

Table 4 English Speaking Caribbean. Secondary EducationCompleted

1975 - 1986 (Percentage of school age)

Country 1975 1981 1986

Barbados (11-16) 73 84 93

Guyana (12-17) 54 60 n.a

Jamaica 58 60 58

Trinidad/Tobago (12-16) 51 72 50

Source : UNESCO Statistical Year book, 1986. Cited in ECLAC, 1989.

Table 5 English Speaking Caribbean. Tertiary Education By Sex 1975 -

1981(Percentages, ages 20-24)

Country 1975 1981FemaleTotal Male Female Total Male

Barbados 10 n.a n.a 18.7 n.a n.a

Guyana 3.8 5.0 2.7 2.8 3.1 2.5

Jamaica 6.7 n.a n.a 6.0 n.a n.a

Trinidad/Tobago 5.1 6.0 4.2 4.8 5.8 3.8

Source : UNESCO Statistical Year book, 1986. Cited in ECLAC, 1989.

Health Expenditure

In addition to the decline in living conditions of employment,

income, social infrastructure, education and housing, which were

11

brought about by the IMF conditionalities since 1980 in the

Caribbean, there have been specific cuts in health spending by the

governments in areas such as public health provision and health care

services which have simultaneously tended to become privatized,

costly, and outside the reach of large sections of the populations

whose living conditions have further declined. For selected Latin

American and Caribbean countries, the following Table represents

the actual cuts in health spending between 1980 and 1984 in

percentage levels.

Table 6 Cuts in Health Expenditure. 1980-1984 (cumulative).

Latin America and Caribbean

Health Expenditure Cuts

Bolivia -77.0*

Guatemala -58.3

Dominican Republic -46.5

Surinam -44.2**

El Salvador -32.4

Chile -23.8

Barbados -21.3

Jamaica -18.5

Costa Rica -16.5 *Until 1982

Honduras -15.2 **Until 1983

Argentina -13.9

Uruguay -13.4

Source: UNICEF, Adjustment With A Human Face, Vol.1, Clarendon

Press, Oxford, 1987, p 76; cited in Roddick,1988, p.98.

12

Table 7 shows public sector spending in health in the Caribbean

between 1981 and 1987.

Table 7 Social Services - Health. Public Sector Spending. 1981 - 1987(Percentage of all Spending)

Country 1981 1982 1983 1984 1985 1986 1987

Bahamas 2.6 2.7 2.8 2.7 2.7 2.9 n.a

Barbados 4.9 4.1 3.9 4.3 4.1 4.1 4.2

Guyana 4.4 4.9 4.0 3.7 4.2 4.0 4.1

Haiti 0.8 1.3 1.0 1.0 0.9 n.a n.a

Jamaica 3.6 3.8 3.5 2.9 2.9 n.a n.a

Dominican Rep. 2.1 1.2 1.1 1.2 1.0 1.0 n.a

Surinam 0.4 0.4 0.3 n.a n.a n.a n.a

Trinfrobago 1.5 2.3 2.5 2.7 2.7 3.0 3.2

Venezuela 1.5 1.4 1.3 1.2 1.3 1.3 1.1

Source : Modified from Bank of International Development, Washington. D.C.1988. Cited in ECLAC, 1989.

Overall Declines in Living Conditions

Table 8 shows the declines in conditions of living in individual

countries in the Caribbean between 1981 and 1988.

Table 8 Changes in Conditions of Living - Caribbean Countries - 1981-1988

(Each year over previous year)

1986 1987 1988 1981-88Country 1982 1983 1984 1985

Barbados -5.2 0.0 3.2 0.6 4.8 1.4 2.1 4.3

Cuba 3.3 4.3 6.5 3.9 0.3 -4.7 1.0 33.1

Dominican Rep. -1.1 2.5 2.0 -4.1 0.8 5.5 -1.3 -1.4

Guyana -12.6 -11.7 0.3 -0.8 -1.6 -1.1 n.a. n.a.

Haiti -5.2 -1.2 -1.4 -1.3 -1.3 -2.4 -6.8 -21.7

Jamaica -1.5 -0.4 -2.2 -6.9 1.0 4.1 1.4 -2.8

Trinidad/Tobago* -1.2 -15.0 -6.4 -3.3 -5.3 -8.1 -5.5 -38.6

L. A. & CaribbeanExcluding Cuba -3.5 -4.7 1.4 1.4 1.6 0.3 -1.5 -6.6

*Oil exporting country

Source : Modified from ECLAC, Cepal, 1988.

By 1988, only Barbados and Cuba had not experienced overall

reductions in conditions of living. Trinidad and Tobago experienced

the most severe declines in the region. Coexisting with declines in

the general conditions of living was an increase in consumer prices

for basic goods and services. Table 9 gives yearly increases in

consumer prices in selected Caribbean countries and the overall

increases for Latin America and the Caribbean. These coexisted with

reductions in incomes and represent another indication of the

declines in living conditions.

Table 9 Changes in Consumer Prices - Caribbean - 1980-1988 (From December to December)

Country 1980 1981 1982 1983 1984 1985 1986 1987 1988

Barbados 16.1 12.3 6.9 6.5 5.1 2.4 0.5 6.3 4.3

Dominican Rep. 4.6 7.3 7.2 7.7 38.1 28.4 6.5 25.0 57.3

Guyana

8.5 29.0 19.3 9.6 n.a n.a n.a n.a n.a

Haiti 15.6 16.4 4.9 11.2 5.4 17.4 -11.4 -4.1 8.3

Jamaica 28.6 4.8 7.0 16.7 31.2 23.9 10.4 8.4 7.7

Trin./Tobago 16.6 11.6 10.8 16.4 14.1 6.6 9.9 8.3 6.0

Venezuela 19.6 11.0 7.3 7.0 18.3 5.7 12.3 40.3 31.2 LA&Carib. 56.0 57.5 84.6 130.8 184.8 274.7 198.9 ?? 427.8

Source : Modified from ECLAC, Cepal, 1988. Cited in ECLAC, 1989

Summary / The commonwealth Caribbean

In the Commonwealth Caribbean, Thomas (1991) has shown that the

meaning and application of the crisis has affected the following

conditions, among others, in the region:

- a worsening distribution of income, wealth and access to

productive resources;

- massive, persistent and increasing unemployment and growing

under-employment, especially in those countries where structural

adjustment policies have been introduced;

- inadequate social services, especially social security provisions

for the unemployed, aged and infirm;

15

- massive flight of capital and heavy turnover of assets in the region;

- a weakened trade union movement in the face of increasing

unemployment, declining living standards and widespread poverty;

- the penetration of foreign media, values and culture into the region,

symbolized by the 'satellite dish' culture found in every island, no

matter how small;

- the massive depletion in several countries of social infrastructure,

especially internal transport and power supplies etc.

Source: Adapted from "The Economic Crisis and the Commonwealth

Caribbean: Impact and Response." C. Thomas, in The IMF And The

South. D. Ghai (Editor), Zed Books Ltd., London, 1991.

The application of structural adjustment policies had a decidedly

regressive effect and its social costs fell most notably on the

working class and the middle income sector to increase the extent

of poverty. By 1988, 170 million inhabitants of Latin America and

the Caribbean, representing more than 40 percent of its population,

live in conditions of poverty, unable to satisfy their basic needs

(PAHO, 1990).

Modernization Policies and Declines in living Conditions in Brazil

In Brazil, during the 1964-1985 modernization effort, the military

government introduced policies which emphasized privatisation of

public enterprises, reduction in spending on social services such as

health and education; reduction in public subsidies to specific

groups in the population, removal of trade protection for local goods,

16

tax increases and other similar policies which contributed to

declines in living conditions and impoverishment of the population.

It is clear that policies similar to those introduced in Brazil by the

military government in the modernization period, which contributed

to declines in living conditions of the population, have been

introduced in several 'developing' countries through the mandatory

Structural Adjustment policies of the IMF. The type of modernization

policies implemented in Brazil, which overwhelmingly benefitted US

firms, would not have been possible without a strong, coercive,

military government (Horn, 1985). There is much evidence that this

administration was put in place through the active collaboration of

the US military and government forces to benefit US investment and

profitability in Brazil. (Black, 1977). Structural Adjustment policies

now replace military governments like that of Brazil between 1964-

1985.

This process, among others, enhanced US economic advantage and

effectively led to the denationalization of the economy and the

transfer of former Brazilian sources of production to foreign

control. According to the Journal do Brazil in 1970, foreign

enterprise controlled 72 percent of capital goods, 78 percent of

durable consumer goods, and 52 percent of non-durable consumer

goods, and foreign capital controlled 70.2 percent of the country's

679 largest businesses.

Simultaneously, there was an increase in public utility rates

through the removal of government subsidies so that the costs of

17

transportation, electricity, water etc. were higher for the ordinary

citizen; there was indexing of bonds and loans to housing loans,

savings deposits, savings and loan associations and corporate debts

which made it more costly for the ordinary person to live, as well

as for local business to thrive. In addition, investment banks were

encouraged and there was the creation of special funds which

functioned as adjuncts of the government development bank.

According to Baer (1989) a large portion of the resources of these

official credit institutions were provided by a system of forced

savings whose burden was borne to a large extent by the working

classes. They were used to finance, for example, the sale of small

and medium sized Brazilian public firms or to finance the

acquisition of capital goods (Baer,1989). Hence public funds were

used to sell public property to the private sector. Foreign (more so

US) firms were best placed to take advantage of these special

arrangements.

Between 1968 and 1974 the average annual rate of growth of the

GDP in Brazil surged to 11.3 percent, up from an average of 3.7

percent in the 1962 to 1967 period (Baer,1989; Furtado,1978;

Black,1977). Industry was the leading sector expanding at yearly

rates of 12.6 percent and, within manufacturing, transport

equipment, machinery and electrical equipment were expanding

fastest, unlike the traditional industries of textiles, clothing and

food products (Baer,1989).

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Part of the increase in the GDP was due to the rise in taxes, both

direct and indirect, which the military government had instituted

from the time of its capture of political office in 1964. Many

accounts claim that taxes contributed approximately 10 to 25

percent of the GDP between 1964 and 1977, the period of the

'economic miracle' in Brazil. This was accompanied by expansions in

foreign trade, especially with the US, and diversification of its

commodity export structure (Furtado,1978; Black,1977; Baer, 1989).

There is extensive documentary evidence of the extreme coercive

rule of this military apparatus in Brazil which facilitated

unprecedented economic growth for (US) firms operating in the

economy at the same time as it created massive poverty among the

ordinary people. One account claims that "more than half of Brazil's

140 million people live in poverty; 40 million are thought to live in

"absolute misery" without adequate food, shelter or health care; and

every year death claims nearly 260,000 babies before their first

birthday" (The Progressive, Sept.1990).

Effects of Brazil's modernization policies on living conditions

The living conditions examined here are those of employment,

income, education, nutrition, water/indoor plumbing, housing and

public health.

Employment.

Prior to 1964, Brazil was agrarian; over 60 percent of the population

of Brazil gained their income through agriculture (Baer,1983). This

has changed dramatically since the late 1960s and by 1985 only 15

19

percent of the population was engaged in full time agriculture

(Baer,1989). The loss of agricultural employment was not replaced

by factory or service jobs because capital investment in industry did

little to expand employment, and in many cases, technology has

eliminated jobs. In 1972, 20 percent of the labour force was listed

as unemployed, and another 35 percent as underemployed

(Black,1977:.243) compared to 10 percent unemployment before

1964 (Black,1977: 241).

Income

The incomes of the majority of the population in Brazil fell

substantially with modernization (Baer,1989: 64; Black,1977:239). One

study reported that every decile of the population, except the top one,

experienced a relative loss of income since 1964; another showed that

the 45 million at the bottom of the society had the same income in

aggregate at the end of the decade as the 900,000 at the top

(Greenwood,1973:. 12). Other sources claim that the poorest 80 percent

received only 27.5 percent of national income in 1970 compared to 35

percent in 1960 while the richest 5 percent increased its share from 44

percent to 50 percent (Burns,1972:17-20).

Urban labour suffered the greatest loss in income and status since

1964 (Black,1977: 243). Horn (1985: 49) quotes a survey conducted

in Sao Paulo which indicated that a worker earning the minimum

wage had to work more than twice as long in 1974 as in 1966 to

purchase the same staple commodities.

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Education

The availability of education rose only marginally during the latest

modernization period. In 1960, 35 percent of the population had no

formal schooling, while in 1980, 33 percent of the population had no

formal education, a fall of only two percent. In 1960, 57 percent of

the population had between 1 to 4 years of schooling while in 1980,

45 percent had between 1 to 4 years schooling. In 1960, 7.5 percent

of the population had between 5 and 11 years of schooling and in

1980, 17 percent had between 5 to 11 years of schooling.

In relation to higher education, in 1960, under 1 percent of the

population had over twelve years of education and in 1980, 5

percent had 12 years and over (Baklanoff,1969:124-135, IBGE,

1983:12-14). Therefore, while primary education among the

poor actually declined, secondary education increased only

marginally, and specialist education rose fairly rapidly and

was free for the enrollees who were typically from the

wealthy class.

More than a quarter of all public spending on education went to

higher education as late as 1983, and only half to primary education.

Total public spending per student in higher education, where the

benefits accrue overwhelmingly to higher income groups, was about

18 times that in secondary and primary education (United Nations

Development Program Report,1990: 58). In primary education, the

percentage of grade one enrollment not completing primary school

21

was 78 in 1983 (UNDP Report, 1990:75). Many of these children were

out on the streets 'making a living'.

Nutrition

In 1974, at the height of the economic boom, there was a 'crisis' in

health in Brazil, a component of which was a rise in infant mortality

related to malnutrition (Wood,1982). In 1959, an adult in the city of

Sao Paulo could purchase the 'essential ration', a government

established minimum of calories, proteins and vitamins required by

an adult for one month, with 27.1 percent of the minimum wage. By

1974, the same purchase required 68.1 percent of the wage. In

April,1981, 80.7 percent of the wage was needed to buy the

essential ration (Horn,1985: 53). The Institute Of Nutrition of the

Federal University of Rio de Janeiro reported in 1982 that a family

of 4 required more than Cr 6,000 (US$75.00) above the minimum

wage to purchase the minimum diet recommended by the World

Health Organization.

Water/Indoor plumbing

In relation to water and sanitation, there was only marginal

improvement. The 1960 census showed that 41.8 percent of urban

households and 1.4 percent of rural households had water

connections. In 1970, the figures were 55 percent and 2.5 percent

respectively. In 1975, 5 percent of rural homes had adequate

sewerage installations and 5 percent had piped water to the interior.

In urban zones, chemical and industrial hazardous wastes pollute the

streams where favelados (inhabitants of urban slums) bathe and

22

wash their laundry because they have no indoor plumbing (Horn,1985:

55).

Housing

The process of modernization marginalized rural peasants and

intensified the swelling of urban ghettoes with recent migrants

from the rural areas seeking employment. The favelas thus created

or enlarged were typically characterized by poor housing in

overcrowded facilities, as well as by the absence of pipe borne

water, public sanitation, sewerage disposal, electrification and

other public amenities. In 1985, claims Horn, 25 million children -

one in every three - lived on the streets.

The rapid urbanization that occurred with the modernization process

in the society, concentrated large numbers of people in favelas and

corticos , the latter of which are collective dwellings which are

usually large old houses divided up into tiny cubicles, one for each

family. Up to 40 or 50 families share one bathroom, cooking and

washing facilities (Dimenstein,1991). These living arrangements,

and those of the favelas, are notorious for overcrowding and poor

sanitation and encourage epidemics and diarrhoeal diseases.

Public Health Provisions

Government expenditure on public health fell by 30 percent in real

terms between 1967 and 1971 (Black,1977: 241) at the same time

that the mortality rate in Brazil from tuberculosis was the highest

in the hemisphere. While the public health budget declined, and the

health of the poor deteriorated, private, hospital oriented treatment

23

of the sick advanced fairly rapidly (Horn,1985: 51-52; Banta,1986:

366). From 1960 to 1980, the Ministry Of Health saw its share of the

federal Budget fall from 5.87 percent to 1.13 percent. It reached its

lowest point with a 0.09 percent share in 1974. In other words, at

the height of the economic miracle, the state often spent less than 2

percent of its budget on public health (Horn, 1985: 62).

Effects of Living Conditions on Health in Brazil

The following analysis measures the relative effects of living

conditions on health in Brazil. Data from a sample of 457 men and

women gathered in 1990 are used. The indices of health status

employed were 'symptoms of disease' and 'poor functioning'. These

are regressed (in two steps) separately on five aspects of living

conditions : education, income employment, indoor plumbing,

nutrition and lack of crowding in households. Age , sex and marital

status are used as control variables.

24

Table 10 Regression of Symptoms of Disease on SociodemographicCharacteristics and Living Conditions

Step One

B

Step Two

(s.e.of b) (s.e. of b)

Education -.013*** -.171 -.009** -.121

(.004) (.004)

Unmarried .018 .029 .026 .027

(.046) (.045)

Age 1.68 .004 .002 .047

(.002) (.002)

Female .119*** .157 .098** .112

(.040) (.039)

Income -10.8* -.105 -6.39 -.062(5.26) (5.07)

Employed -.006 -.021 -.004 -.016

(.015) (.015)

Indoor -.218*** -.145

Plumbing (.071)

Nutrition -.173**** -.201(.041)

Lack of -.046** -.107

crowding (.021)

Constant 1.49**** 2.05 **"

R2 .089 .176

*p< .05, **p< .01, ***p< .001, ****p< .0001 (1 tailed tests). N = 416.

25

Table 10 shows that having adequate nutrition is the ultimate and the

most important factor in reducing symptoms of disease (Beta = -.201). It

is the major factor through which education and income translate into

good health. Having indoor plumbing (Beta = -.145) and lack of crowding in

homes (Beta = -.107) also reduce symptoms of disease. It is important to

note that employment among this population does not reduce the

probability of having symptoms of disease.

Education significantly reduces illness (Beta = -.171), although its

significance is reduced (Beta = -.121) by its effects on adequate

nutrition, plumbing and lack of crowding in the home, all of which

reduce the probability of having symptoms of disease. When

nutrition, lack of crowding and indoor plumbing are controlled for,

the importance of income is greatly reduced and becomes

insignificant.

Being female is consistently significant in increasing symptoms of

disease; (Beta = .157) the significance is only slightly reduced (Beta

= .112) through the effect of being female on other factors, such as

the probability of having adequate nutrition, indoor plumbing and

living in uncrowded homes. Women have higher rates of morbidity

than men.

The following Table 11 illustrates the effects of sociodemographic

factors and living conditions on poor functioning.

Table 11 Regression of Poor Functioning on Sociodemographic

Characteristics and Living Conditions

Education

Unmarried

Step Oneb

(s.e.of b)-.002(.002).017(.026)

B-.051

.032

Step Twob

(s.e.of b)-8.873(.002).021

(.026)

B-.020

.039

Age .003 ** .107 .003** .132

(.001) (.001)

Female -.023 -.052 -.036 -.081

(.024) (.023)

Income -5.54* -.094 -3.55 - .060

(3.04) (3.00)

Employed -.026** -.161 -.026 ** -.158

(.009) (.009)

Indoor -.052 -.060

Plumbing (.042)

Nutrition -.099**" -.196(.025)

Lack of crowding -.018 -.070(.013)

Constant 1.06 **** 1.29 **"

R2 .071 .123

*p< .05 , **p< .01, ***p< .001, ****p< .0001 (1 tailed tests). N=418

Step one of Table 11 shows that being employed and having a high

income significantly reduces the probability of poor functioning.

Education is not significant in reducing poor functioning.

27

Income has an effect through the extent to which it can be converted

into nutrition. Of all the factors considered, adequate nutrition is

the most significant in reducing poor functioning (beta = -.196). The

significance of employment does not change when nutrition, indoor

plumbing and lack of crowding are controlled for. This means that

work itself is highly significant in reducing poor functioning.

Alternately, poor functioning interferes with employment.

Summary/ Brazil

It is clear that the effects of the modernization process, assisted by

the military government in Brazil have had a deteriorating impact on

living conditions and on health for all but the wealthy. Living

conditions, particularly nutrition levels, have the greatest impact on

health. The negative effects on health that are brought about by a

decline in living conditions of employment, income, education,

nutrition, indoor plumbing and housing conditions, are not

compensated for by the sophistication of the health care system, the

nature of the medical technology, the potency of the drugs nor the

skills of the medical experts.

Effects of Living Conditions on Health In the Caribbean

It can be safely assumed that living conditions impact on health for

the people of the Caribbean in the same way that they do for Brazil.

Adequate nutrition has the greatest impact, while employment,

income, education, adequate housing and water supply (among

others) also significantly affect health status.

28

A deterioration in health status of the population in the Caribbean is

implied in the reduction in living standards which have accompanied

accommodation to the structural adjustment policies mandated by

the IMF. This has been complicated by a reduction in health

expenditure of enormous proportions. The deteriorating effects on

health brought about by the lowering of living conditions among

populations already vulnerable to poor health, have been worsened by

direct reductions in health spending, thus exacerbating a potential

health crisis. Women and children are more vulnerable to poor health.

According to PAHO (1992) document, the fact that women are

concentrated in the informal sector of the economy means that, in

terms of impact on health, their average workdays are longer than

those of men, that they have less paid vacation and sick leave, that

they have less access to health services and the benefits of social

security and their jobs are less stable and certain. This situation,

especially in the case of female heads of households can contribute

to high levels of morbidity.

In relation to mortality the phenomenon of excess female mortality

in early childhood had been noted in 13 Latin American countries and

7 Caribbean countries. In Trinidad and Tobago, excess female

mortality is present for the total group of children under 5, and also

occurring basically in children under 1 year. This was considered to

be a warning sign for the probable existence of and important social

problem, discrimination against girls (Waldron 1987: 209).

29

Conclusions

The international economic policies of the 1960s, which were

designed to further incorporate peripheral countries into the

international capitalist economic system, were expressed as

'modernization' policies. They ultimately functioned for the

economic benefit of multinational firms and core capitalist

countries. Peripheral countries which strongly embraced these

policies, such as Brazil and other Latin American countries, have

depended on military governments whose policies made it possible

for the modernization programme to succeed for multinational firms

and small groups of local elite on the one hand. On the other hand,

these policies have marginalized and further impoverished large

sections of the populations whose health status have rapidly

declined.

The implementation of modernization policies and debates about

modernization are no longer aggressively disputed; they have been

replaced by a whole new ball game, though with similar motive, of

means to handle the international indebtedness of peripheral

countries (which has historical causation) in the new context of

OPEC, the energy crisis, and the concomitant debt crisis which

climaxed in 1982.

In this regard, emphasis on foreign controlled industrialization has

been enlarged, internationalized and enhanced by the dictates of

Structural Adjustment policies which apply to all peripheral

countries needing international funding from any source. The

30

mandatory privatisation of all economic activity, the opening up of

economies to the forces of the market, the compulsory decline of

state financial activity and political decision making, the

deterioration of social infrastructure, the decline in the terms of

trade, among other policies mandated by the IMF, have massively

enhanced multinational advantage in poor countries. They have

simultaneously undermined living conditions in the areas of

employment, income levels, nutrition, education, housing and public

health. These, together with reductions in direct health

spending,have contributed to a decline in health in peripheral

countries from which the Caribbean has not escaped. The IMF and

Structural Adjustment policies, on the basis of the evidence

presented in this paper, are associated with worsening of the health

status of the people in the Caribbean.

31

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