Joining the dots between economics, income, health and poverty

The concerns about recession and its impacts on poverty are seen commonly as a question mark over household incomes, over food security and often involve debates about social protection. An aspect that all too often gets ignored in this equation – no doubt because of its complexity – is health and in particular the health of women and children.

Changes in neonatal mortality rates between 1990 and 2009. The map illustrates the change in NMR between the years 1990 and 2009 for each of the 193 countries estimated. PLoS Medicine 8(8): e1001080

This is linked very closely to poverty, however we measure it, and the conditions that either cause poverty to persist (leading to chronic poverty) or cause households at risk to lapse into poverty every now and then (shock). The human development index methodolgy, which is from this year using multi-dimensional indices for poverty for the first time, helps us link health, poverty, income and economic growth (or its opposite).

The question is: is this new understanding, which is more in tune with the way households actually carry on with their lives and are actually affected by wider trends concerning economy, helping integrate the connections? If there is one good reason to ask this question, it is the new study on ‘Neonatal Mortality Levels for 193 Countries in 2009 with Trends since 1990: A Systematic Analysis of Progress, Projections, and Priorities’.

[The World Health Organization (WHO) has a report and summary of the study on this page – ‘Newborn deaths decrease but account for higher share of global child deaths’]
[The full study is available on PLoS Medicine, 1 August 2011 (Volume 8, Issue 8)]

This has shown that every year, more than 8 million children die before their fifth birthday. Most of these deaths occur in developing countries and most are caused by preventable or treatable diseases. In 2000, world leaders set a target of reducing child mortality to one-third of its 1990 level by 2015 as Millennium Development Goal 4 (MDG4). This goal, together with seven others, is designed to help improve the social, economic, and health conditions in the world’s poorest countries. In recent years, progress towards reducing child mortality has accelerated but remains insufficient to achieve MDG4.

“In particular, progress towards reducing neonatal deaths – deaths during the first 28 days of life – has been slow and neonatal deaths now account for a greater proportion of global child deaths than in 1990. Currently, nearly 41% of all deaths among children under the age of 5 years occur during the neonatal period. The major causes of neonatal deaths are complications of preterm delivery, breathing problems during or after delivery (birth asphyxia), and infections of the blood (sepsis) and lungs (pneumonia). Simple interventions such as improved hygiene at birth and advice on breastfeeding can substantially reduce neonatal deaths.”

Neonatal mortality rates in 2009. The map illustrates the NMR in year 2009 for each of the 193 countries estimated. PLoS Medicine 8(8): e1001080

The researchers used civil registration systems, household surveys, and other sources to compile a database of deaths among neonates and children under 5 years old for 193 countries between 1990 and 2009. They estimated NMRs for 38 countries from reliable vital registration data and developed a statistical model to estimate NMRs for the remaining 155 countries (in which 92% of global live births occurred).

They found that in 2009, 3.3 million babies died during their first month of life compared to 4.6 million in 1990. More than half the neonatal deaths in 2009 occurred in five countries – India, Nigeria, Pakistan, China, and the Democratic Republic of Congo. India had the largest number of neonatal deaths throughout the study. Between 1990 and 2009, although the global NMR decreased from 33.2 to 23.9 deaths per 1,000 live births (a decrease of 28%), NMRs increased in eight countries, five of which were in Africa. Moreover, in Africa as a whole, the NMR only decreased by 17.6%, from 43.6 per 1,000 live births in 1990 to 35.9 per 1,000 live births in 2009.

To return to my question concerning the understanding of economics, income, health and poverty, does most current analysis see to integrate these elements, or is it still GDP-income driven? A new (2011 May) paper released by the Brookings Institution indicates that the GDP-income route is still favoured. The paper, ‘Two Trends in Global Poverty’, Geoffrey Gertz and Laurence Chandy, has said that while the overall prevalence of poverty is in retreat, the global poverty landscape is changing. “This transformation is captured by two distinct trends: poor people are increasingly found in middle-income countries and in fragile states. Both trends – and their intersection – present important new questions for how the international community tackles global poverty reduction.”

The two charts show the trajectory of 20 developing countries along three dimensions: number of poor people, degree of fragility and real income per capita. These 20 countries collectively account for 90 percent of the world’s poor in 2005, and thus largely define the evolving state of global poverty. Graphic: Brookings Institution

“The increased prevalence of poverty in middle-income countries is in many ways a trend of success. Over the past decade, the number of countries classified as low-income has fallen by two fifths, from 66 to 40, while the number of middle-income countries has ballooned to over 100. This means 26 poor countries have grown sufficiently rich to surpass the middle-income threshold. Among those countries that have recently made the leap into middle-income status are a group of countries  –  India, Nigeria and Pakistan  – containing large populations of poor people. It  is their “graduation” which has brought about the apparent shift in poverty from the low-income to middle-income country category.”

This categorisation of middle, low and high income was to an extent useful in the 1970s, when the idea of a human development index was being discussed, but we’ve come a long way since. We know that even in smaller countries (rather, countries with populations that are relatively small compared to those whic bear the sort of burdens studied in the PLoS Medicine research) there is a great deal of income disparity. ‘Income’ itself is a condition with a bewildering number of inputs – social science is quite inadequate to the task of being able to recognise all of these, let alone quantify them and rationalise them across countries and regions – which is exactly what studies like this try to do unfortunately.

“In 2005, when more than half the world’s poor lived in such countries, it made some sense to think about fighting poverty in terms of a single developing country paradigm, based on what worked in countries such as Ghana, Tanzania, Mozambique or Vietnam,” Gertz and Chandy have said. “This logic was evident in two of the major events of that year which continue to shape today’s development agenda: the G8 meeting at Gleneagles and the High Level Forum on Aid Effectiveness in Paris. It was also apparent in Jeffrey Sachs’ influential 2005 best-seller, ‘The End of Poverty’. The legacy of these ideas is scattered throughout the work of the international development community in the design of traditional aid instruments and the standard methods of country engagement.”

The authors of the Brookings paper have said that this approach remains relevant for some countries, but with 90 percent of the world’s poor living in different settings today, its broader application can no longer be justified. Yet they have found that such an admission poses a dilemma. The dilemma exists because one of the reasons the stable low-income paradigm has persisted is because it characterizes an environment in which the international development community feels most comfortable and has the most experience. “The role of external actors in supporting poverty reduction in stable low-income countries is well understood and the standard tools of external assistance – financial and technical assistance – are well suited to them.”

Maplecroft's 2011 food security risk index

What does this mean? Does it give us a hitherto obscured insight into the inner world of aid agencies and international development departments and how they see ‘poor’ countries’ populations? Does it mean that we are burdened with three decades worth of simplistic labelling of populations at risk simply because labelling them any other way makes it difficult to help them? That’s what it looks like to me and I’d like to thank Gertz and Chandy for revealing this. But it’s way past high time this sort of categorisation was ditched, once and for all. It would do us and the battalions of development professionals a huge amount of good to simply be able to say, every so often, “we don’t know enough”.

It is worth being honest about the state of our knowledge concerning the lives of the the majority of households in ‘developing’ countries. Some of the reasons why such honesty will help in the long term are contained in a thoughtful new publication from the World Bank (whose army of development professionals will benefit from its reading). This collection is entitled ‘No Small Matter: The Impact of Poverty, Shocks, and Human Capital Investments in Early Childhood Development’ (The World Bank, 2011) and it has said that, as the 2008 global financial crisis has again demonstrated, economic crises are an unfortunate recurring event in the world and can have severe consequences for household livelihoods.

Progress in key health indicators, UN Human Development Report 2010

‘No Small Matter’ defines economic crises as sharp, negative fluctuations in aggregate income, these being especially common in developing countries, and the frequency with which they occur has been increasing in recent history. We know that declines in household and community resources are not the only risks that arise from an economic crisis because of its aggregate nature. We also know – from fieldwork and by hearing those whom we would wish to help – that at the same time as households cope with the possibility of reduced income from aggregate economic contractions, vital public services may also experience a decline in quality or availability, which in turn may have an additional impact on skill development among children. This is happening now, in more countries than ever before. The economic crisis that hit Latin America in 1982 led to a decrease in public health spending and had a disproportionate effect on the poorest groups. In 2011, the decrease in public health spending exists in many more countries.

A chapter in ‘No Small Matter’, ‘The Influence of Economic Crisis on Early Childhood Development: A Review of Pathways and Measured Impact’, by Jed Friedman and Jennifer Sturdy, is particularly useful.

This has said that “conservative estimates suggest that over 200 million children under five years of age living in developing countries fail to reach their cognitive development potential because of a range of factors, including poverty, poor health and nutrition, and lack of stimulation in home environments”. It is possible, the chapter’s authors have said, that this burden increases during times of crisis as poverty increases and food security is threatened. However, to investigate this claim more carefully it is necessary to understand the pathways through which poverty influences skill acquisition in children.

“The most severe condition affecting ECD (Early Childhood Development) is infant and early child mortality. Sharp economic downturns were associated with increases in infant mortality in Mexico, Peru and India. The mortality of children born to rural and less educated women is more sensitive to economic shocks, which suggests that the poor are disproportionately affected during most economic crises, and perhaps the poor face important credit constraints that bind in tragic ways during large contractions.

Weak relationship between economic growth and changes in health and education, UN Human Development Report 2010

The mortality of girls is also significantly more sensitive to aggregate economic shocks than that of boys. This gender differential exists even in regions such as Sub-Saharan Africa that are not particularly known for son preference and indicates a behavioral dimension where households conserve resources to better protect young sons at the expense of daughters.”

Finally, a further note about the extremely valuable PLoS Medicine study ‘Neonatal Mortality Levels for 193 Countries in 2009 with Trends since 1990: A Systematic Analysis of Progress, Projections, and Priorities’. The authors are: Mikkel Zahle Oestergaard1, Mie Inoue1, Sachiyo Yoshida, Wahyu Retno Mahanani, Fiona M. Gore1, Simon Cousens, Joy E. Lawn and Colin Douglas Mathers (on behalf of the United Nations Inter-agency Group for Child Mortality Estimation and the Child Health Epidemiology Reference Group – World Health Organization, Department of Health Statistics and Informatics; World Health Organization, Department of Child and Adolescent Health and Development; London School of Hygiene & Tropical Medicine; Saving Newborn Lives/Save the Children).

Children of poor households are more likely to die, UN Human Development Report 2010

The study found that of the 40 countries with the highest NMRs in 2009, only six are from outside the African continent (Afghanistan, Pakistan, India, Bhutan, Myanmar, and Cambodia). Among the 15 countries with the highest NMRs (all above 39), 12 were from the African region (Democratic Republic of the Congo, Mali, Sierra Leone, Guinea-Bissau, Chad, Central African Republic, Burundi, Angola, Mauritania, Mozambique, Guinea, and Equatorial Guinea), and three were from the Eastern Mediterranean (Afghanistan, Somalia, and Pakistan). Throughout the period 1990–2009, India has been the country with largest number of neonatal deaths. In 2009, the five countries with most deaths accounted for more than half of all neonatal deaths (1.7 million deaths = 52%), and 44% of global livebirths: India (27.8% of deaths, 19.6% of global livebirths), Nigeria (7.2%, 4.5%), Pakistan (6.9%, 4.0%), China (6.4%, 13.4%), and Democratic Republic of the Congo (4.6%, 2.1%). The top five contributors to the 4.6 million neonatal deaths in 1990 were: India (29.5% of deaths, 19.8% of global livebirths), China (12.3%, 18.0%), Pakistan (5.4%, 3.4%), Bangladesh (5.0%, 2.9%), and Nigeria (4.8%, 3.3%).

As the risk of children dying before the age of five has fallen, the proportion of child deaths that occur in the neonatal period has increased. This increase is primarily a consequence of decreasing non-neonatal mortality in children under five from infectious diseases such as measles, pneumonia, diarrhea, malaria, and AIDS. Globally, 41% of under-five deaths now occur in the neonatal period. Over the 20 y between 1990 and 2009, the proportion of global neonatal deaths that occurred in Africa increased. Although Africa is now the region with the highest NMR, the proportion of under-five child deaths that are neonatal remains relatively low in Africa—the fraction increased from 26% to 29% between 1990 and 2009. This apparent anomaly reflects the fact that Africa accounts for approximately 90% of child deaths due to malaria (0.7 million under-five deaths) and HIV/AIDS (0.2 million under-five deaths), resulting in relatively higher post-neonatal child mortality than other regions.

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The race to own India’s water

Water privatisation in India today comes in a wide range of what are called “solutions” by the votaries of public-private partnerships. There is water-related engineering and construction (such as earth-moving activities, alteration of river courses, artificial linking of rivers, building of dams and pipelines, etc), water and wastewater services, and water treatment, which affect both nature and communities. What remains outside the ambit of “solutions” – only until the victims can be persuaded to pay – are the impacts of the micro-scale geoengineering. Every impact damages people and the environment. Impacts can be categorised as: ecological (effects on natural ecosystems), social (related to rights of human beings and communities, health, cultural norms, attitudes, belief systems), economic (affecting livelihoods, well-being, and access to basic services) and even legal and institutional.

We are now seeing increasing pressure for private sector development in India – and the rest of Asia-Pacific. Manthan Adhyayan Kendra, an independent research unit concerned with water in India (they are based in Madhya Pradesh) says that this pressure is being mounted mainly by two influential international financial institutions: the World Bank and its regional partner, the Asian Development Bank. The World Bank gives funds, advice, training and technical assistance to governments and the private sector to implement privatisation.

Four entities allow the World Bank to undertake various functions. The International Finance Corporation (IFC) lends directly to the private sector and can even purchase equity in private companies. The Public Private Infrastructure Advisory Facility (PPIAF) seeks to improve the quality of infrastructure through private participation. The Multilateral Investment Guarantee Agency (MIGA) insures the private sector against commercial and political risk. The International Court for Settlement of Investment Disputes (ICSID) takes charge of disputes between investors and states. The Bank also has some other mechanisms that promote its activities in India including Water and Sanitation Program (WSP), Water and Sanitation for Urban Poor (WSUP), Water for Asian Cities (WAC) and others. The World Bank’s funding partners include the JBIC, AusAid, GTZ, USAID, DFID, UN-Habitat and the ADB.

More growth in large cities and towns, and urbanisation becoming a dominant land use pattern in more districts of India mean that the industrial, residential and municipal demands for water are rising quickly. India’s Central Pollution Control Board (an agency of the Ministry of Environment and Forests, Government of India) has released its ‘Observation on trend of Water Supply, Wastewater Generation in Cities and Towns’. Here are its main comments and highlights. I’ve left the language as it is – the import is what counts.

From The Economist's special report on water, 22 May 2010: Global water sources

“In decade of 90’s the growth of cities is observed is 33% while the growth of the decade in beginning of millennium is slowed down. Metropolitan cities is increased from 3 to 6 Nos. from 80’s to 2008. Class-I cities increase from 37 to 53 Nos. Class-II towns increase from 22 to 35. This trend indicates that all type of cities has grown in the decade of 90’s.”

Findings and Recommendations

• Since the cities are growing, the population is enhanced from 30 million to 48 million.
• Consequently water supply has been increased approximately twice in magnitude from 4,970 MLD (million litres per day) to 8,782 MLD.
• Sewage generation has risen 38%.
• Comparing the data of decades of 90’s to 2008, it is indicated that coastal cities and towns are not growing significantly.
• Treatment capacity of sewage in comparison to decade of 80’s to until now has increased almost double (93%).
• There are 498 Class-I Cities having population of 257 million and 410 Class-II Towns having population in India.
• Total water supply including all class-I cities and class-II town in India is 48,093.88 MLD.

The CPCB says that wastewater generation from all class I cities and class II towns is 38,254 MLD whereas the installed treatment capacity is 11,787 MLD, which means that no more than a maximum of 31% of total sewage generated can be treated. (If the question is ‘where does the rest go?’, the CPCB answers that too in its report.) “This evidently indicates ominous position of sewage treatment, which is the main source of pollution of rivers and lakes,” warns the CPCB report. “To improve the water quality of rivers and lakes, there is an urgent need to increase sewage treatment capacity and its optimum utilisation.”

The CPCB, which thankfully still has a reputation for straight talking, has advised India’s municipalities and town administrations to “set up a very thoughtful action plan to fill this gap in a minimum time frame”. The CPCB has suggested that large cities in which and from which the pollution problem is more severe, cities/towns whose effluents and sewage are polluting rivers and water bodies “will be required to be taken up on priority basis in first phase”. Why is the CPCB so insistent? Quite simply, it says there is an “urgency of preventing pollution of our water bodies and preserving our precious water resources”.

But even in the India of non-city and non-town landscapes, there are plans being hatched by the would-be water merchants. An indication of the mischief afoot comes from a report righteously entitled ‘Pro-Poor Financial Services for Rural Water: Linking the Water Sector to Rural Finance’. (If so many good deeds are ‘pro-poor’ nowadays how come the ranks of the do-gooders is only increasing?) Here is what it says: “Previous studies suggest that a considerable demand for pro-poor financial services for water in rural areas remains unmet. The number of potential microfinance clients in rural areas for investments in water supply is estimated to be 5.0 million in East/Southeast Asia, 10.3 million in South Asia, and 3.1 million in sub-Saharan Africa.” Those three numbers get to the heart of the matter.

The report continues: “Concerning microloans for rural sanitation, there are 17 million potential clients in East/ Southeast Asia, 30.8 million in South Asia, and 4.4 million in sub-Saharan Africa. In total, the potential demand for micro-loans in these three regions is estimated at US $ 1.5 billion in the case of rural water supply, and US $ 5 billion in the case of rural sanitation. The challenge is how to unlock this latent demand and turn it into an effective process.” The authors make no bones about it, the riches at the bottom of the water table is what they’re after. And who are the authors? The German Federal Ministry for Economic Cooperation and Development (BMZ), the Deutsche Gesellschaft für Technische Zusammenarbeit (well-known as GTZ in Asia, and which I was surprised to learn is a GmbH), the International Fund for Agricultural Development (IFAD) and of course the World Bank.

Cover of The Economist's special report on water, 22 May 2010

The water merchants have their cheerleading squad in place in the form of a pliant media, and The Economist has obliged by bringing out one of its typically characterless ‘surveys’, as it likes to call them. It is a special report on water (the 22 May 2010 issue) and the subject is dealt with in the sycophantic manner that the weekly reserves for the captains of industry. “Yet even if it takes two litres of groundwater to produce a litre of bottled water, companies like CocaCola and PepsiCo are hardly significant users compared with farmers and even many industrial producers.” (Hear, hear, who needs those pesky farmers anyway?) “PepsiCo has nevertheless become the first big company to declare its support for the human right to water. For its part, CocaCola is one of a consortium of companies that in 2008 formed the 2030 Water Resources Group, which strives to deal with the issue of water scarcity. Last year it commissioned a consultancy, McKinsey, to produce a report on the economics of a range of solutions.” This transatlantic weekly, once upon a time British, puts in a word for big dams too: “Dams and reservoirs certainly need constant repairs and careful maintenance and do not always get them, usually because the necessary institutions are not in place.”

Who are operating as water merchants and what do they want? There are several North American / West European companies now in India: Ondeo-Degrement, Veolia Environnement, Saur of France, RWE/Thames Water of Germany and the UK Bechtel, Enron (US), Compagnie Generale des Eaux (CGE). Indian companies are going to either compete with them, or join them – Tata subsidiary Jamshedpur Utilities and Services Company (JUSCO), IVRCL Infrastructures and Projects, Mahindra Infrastructure Ltd., IL&FS.

Surat, Gujarat: Fishing boats near the mouth of the Tapi river

The foreign multinationals are involved in several projects across the country. Compagnie Generale des Eaux (CGE) is operating urban water supply project in Hubli-Dharwad in Karnataka. Veolia is operating water and wastewater plant in Nagpur in Maharashtra and it has also formed a joint venture with JUSCO. Ondeo-Degremont has won contracts to construct water treatment plants in Mumbai and Chennai and it is also operating a wastewater treatment plant in Delhi. Thames Water was involved in a leak reduction project in Bangalore while United Utilities and Bechtel are partners in the Tiruppur project. JUSCO has projects in Jamshedpur, Bhopal, Kolkata and Adityapur. IVRCL is working on a wastewater treatment project in Alandur, desalination in Chennai and solid waste management in Tiruppur. IL&FS is involved in various projects in Haldia, Tiruppur, Vishakhapatnam and municipal waste processing facilities in Delhi and Ajmer, Rajasthan.

The CPCB has outlined the water, sewage and pollution tasks for cities, but its worries are going to be transformed into “a challenge to unlock latent demand” by the multilateral lending organisations on the one hand and the global water merchants (together with their Indian partners). Already deficit in terms of civic infrastructure and struggling with yawning gaps in the provision of healthcare and education, India’s towns and small cities will pass the burden of water profiteering on to those who can’t afford it. They leave the rural districts to earn a living in the cities, when their water rupee gets squeezed down to the last drop, where will they go then?