Child health and the international monetary fund: the Nicaraguan experience

 

Emma Curtis

During the early 1980s, many Nicaraguans hoped for a better and fairer society. In 1998, as Nicaragua tried to negotiate its status as a Highly Indebted Poor Country, much of that hope has been eroded. The story of Nicaragua in the past 19 years shows how the real potential for change directed by the Nicaraguan people was not allowed to happen. It is also a story of unpayable debt, deterioration in public services, increasing hardship, and external control by the international monetary agencies.

This background to the Nicaraguan story started in July, 1979, when the Frente Sandinista de Liberacion Nacional (FSLN), a popular revolutionary front, ousted from power the Somoza family who had ruled the country corruptly for 45 years. In 1979, the health status of the people in Nicaragua ranked with that of Bolivia and Honduras as the worst in Latin America. ^[1] The Sandinista government made a commitment to transform the health service and, in 1982, WHO acknowledged the substantial advances in health care in the early years by the new government. This progress, however has not been maintained. In 1993, Hugh 0' Shaughnessy ^[2] wrote in The Observer that Nicaragua was again "challenging Haiti for the unwanted distinction of being the most destitute country in the western hemisphere” and Sandinista “health, nutrition, literacy and agrarian programmes have been scrapped by a government pressed by the International Monetary Fund (IMF) and Washington to privatise and cut public spending”. The work, and sacrifice, of a decade is being undone by the prescriptive imposition of structural-adjustment policy and the burden of international debt. Susan George ^[3] points out the IMF “has chosen to disregard social equality as a criterion for its programmes, much less as an objective that could be imposed upon governments.”

The changes in health service during the 1980s were part of a programme intended to produce a more equitable society which also included a comprehensive agrarian reform programme, a national literacy campaign (recognised with a UNESCO prize in 1981) and a free three tier educational system.

Before 1979, only 28% of the population had access to any modern health service. The infant mortality rate had been declining during the previous 20 years, but the cause of the fall, which continued through the 1980s is complex. ^[4] The health service in 1979 was fragmented inefficient, and unbalanced. Social services purchased health care for salaried employees who comprised only 8.4% of the population but consumed 50% of available health resources. Overall, 90% of resources were directed towards 10% of the population. The efforts of the Council of Evangelical Churches of' Nicaragua (CEPAD) US Agency for International Development (USAID), and other donors were frustrated by the centralised system of the Somoza dictatorship that impeded such progress. In August. 1979 the Sandinista government established a unified public-health system under the control of the Ministry of Health, and access to health care was to be a right of all the country's citizens. ^[5] There was an immediate expansion in infrastructure: health centres and posts were set up in urban and isolated rural communities and more doctors and nurses were trained. By 1982, 300 new health posts had been built and 70% of the population received some medical care from trained staff. There was an emphasis on preventive health care, health education, and community participation. Health expenditure increased from US$70 million in 1980 in US$132 in 1983. There was unprecedented popular participation in health work with the support of health volunteers or "brigadistas" and people's health councils.

Infant mortality fell from 120 per 1000 livebirths in 1979 to 61 per 1000 livebirths in 1990. Between 1977 and 1989, there was a 40.5% increase in access to health services (from 42.5% to 83%). Immunisation coverage rose from under 20% to greater than 80% for BCG and poliomyelitis and over 60% for diphtheria-tetanus-pertussis and measles. The last recorded case of polio was in 1982.

The economic situation during this time was precarious. Nicaragua's foreign debt in 1979 was $1.562 billion and there were few national reserves. In 1985, a North American economic blockade was imposed with the support of the IMF and the World Bank. Lack of foreign financial assistance exacerbated the recessionary effect of rigid defence spending and unexpected disasters such as Hurricane Joan in 1989.

The high spending on defence was a direct result of the US-sponsored Contra war, and accounted for 7.6% of the gross Domestic Product (GDP) in 1981 and 18.2% in 1987. In 1981, health and education together accounted for 8.7% of the GDP. By cutting back on capital expenditure, the Sandinista government managed to maintain expenditure in health and education, 9.6% in 1987, despite spiralling defence costs, but such expenditure could not be maintained and in 1989 it fell to 6.6%. In 1993 after the ceasefire, defence spending fell to 3.8% of the GDP. The Contras targeted health centres and schools and many teachers and health workers were killed, injured, raped, or abducted. By the end of 1987, 128 of 600 health facilities had been destroyed. Regions 1 and 6 in the north of the country were most affected, but the effect of the war was felt throughout the country. By the end of 1985, 10% of the population had lost access to health facilities, 170 adult teachers had been killed, and 503 school, and 800 adult education centres had closed because of the threat of attack. The planned construction of 2000 rural homes, water and sanitation facilities, was interrupted. Agricultural production was affected and led to widespread food shortages. The war had profound psychological effects on the military involved and civilians also in the war zones. Nicaragua's foreign debt had risen to $5.5 billion by 1990. ^[6]

The Sandinista government lost power in elections in January, 1990, and UNO, a right-wing coalition, was voted into power. The contras disarmed and the US economic blockade was lifted. In 1990, Nicaragua, a poor country emerging from a bitter, ruinous war engaged with the IMF and the World Bank and economic programmes were introduced.

Stabilisation and structural-adjustment programmes, the two main programmes of the IMF and the World Bank, have been implemented throughout the developing world. Stabilisation programmes are short-term programmes intended to remedy macroeconomic imbalances, such as the balance of payments deficit and inflation. Structural-adjustment programmes aim to reactivate economic growth. What such adjustment means for a country is a cutback in credit availability currency devaluation, relaxation of price controls, deregulation, integration into the world economy reduction in the role of the state, and, of importance for the health sector, a reduction in public spending. Repayment of debt is an essential element of the programmes.

These measures devastated Nicaragua. Hunger and malnutrition are increasing, there is a national shortage of credit, and peasants cannot buy seed - in 1992, 100,000 acres of beans were sown compared with just 6000 acres in 1993. Devaluation has caused a reduction in the real values of wages so that any imported products such as medicines, and now food, are unattainable. Extensive privatisation has caused massive unemployment from 20.9% of the economically active population in 1985 to greater than 60% in 1993. Since the reduction of import tariffs, local industry has collapsed in the face of cheap foreign imports. There have been huge cutbacks in public spending:

between 1990 and 1993, 285 000 jobs were eliminated from the public sector. "User fees", charges for basic services, for health care and education now exclude the most vulnerable sections of society from these services. About a quarter of primary schoolchildren have not enrolled in primary school since charges for registration and a monthly stipend were introduced, and attendance at secondary school and university has fallen, the latter once again becoming the privilege of the wealthy. A UN study in 1995, documented that the population of Managua consume an average of only 1808 calories daily and only 18% of people eat three meals daily, whereas in the later years of the Sandinista government ration cards ensured the basic minimum for everyone. Crimes against the individual and drug-related crimes have also increased. Utilities such as electricity, water, and sanitation have not yet been privatised, largely due to union resistance, but privatisation is expected next year (Mirna Cunningham, personal communication).

Nicaragua's GDP per head of $442 is the lowest in Latin America. The country's foreign debt in 1997 was $6.11 billion; debt repayment used 39% of total expenditure, whereas health and education received only 8%. Foreign-debt service amounts to 11.2% of the GDP while funds received from foreign aid amount to only 8% of the GDP. ^[7]

The effect of the economic programmes on the health service is predictable. Government spending on health was cut from $58 per head per year in 1988 to $17 per head per year in 1991. The average annual number of consultations per person has fallen from 1-7 in 1985-90 to 1.2 in 1992-92. As a result of voluntary redundancy programmes, 2959 workers have left the health services, 1456 of whom are medical staff. Health centres are starved of funds for medicine, transport, and materials for disease-prevention programmes. The incidence of malaria is rising and there have been epidemic outbreaks of dengue and cholera. Almost all medicines are purchased at private pharmacies and most people cannot afford them.

The effect of these changes on children is devastating. Malnutrition is increasing and malnutrition as a direct cause of death among children aged 1-4 years has risen, so too have deaths from diarrhoeal and respiratory diseases. In 1993, infant mortality had risen to 83 per 1000 livebirths and immunisation coverage has fallen. Hundreds of children are forced to work, for example selling trinkets or washing windscreens among the fumes at the traffic lights in Managua. Others along with their mothers, have turned to prostitution. About 126 000 children now work in the informal sector—for example, street work, door-to-door selling, etc.

Peabody ^[8] has warned that “>From a purely economic viewpoint, structural-adjustment policies and economic reform policies are viewed as short-term austerities that lead to long-term growth and development. These intertemporal trade-offs, however, are not always acceptable in health.” The quantative data available on the impact of structural-adjustment programmes provides a

restricted view of the situation. In many developing countries, there are no reliable data ^[9] and available data do not assess the impact on people's lives or the despair that the programmes bring with them.

Bower ^[10] tells a tale of political corruption and loss of professional commitment and ethics by the medical profession. There is however, a context and the changes in Nicaragua are mirrored through out the developing world. O'Hanlon ^[11] and Logie ^[12] describe the situation in Mozambique, a country whose recent history is remarkably similar to Nicaragua's. For every $1 given in aid by the rich, $3 is sent back by poor countries in debt repayment. In 1997, total debts in developing countries rose to more than $2 trillion.

Structural adjustment has not promoted growth or stimulated investment in Nicaragua during the past 7 years. Under current conditions, the health and well-being of the Nicaraguan people will continue to deteriorate. Until the Nicaraguan debt situation is resolved there is no hope for sustainable growth and development. Nicaraguan and international groups are lobbying for Nicaragua's inclusion in the Highly Indebted Poor Countries initiative, an initiative which would reduce the debt burden, though it is no panacea. The Jubilee 2000 Coalition, launched by the major UK aid agencies in 1996, is campaigning for a one-off cancellation of the unpayable debts of the world s poorest countries by the year 2000, on a case-by-case basis and under an independent and transparent process so that a billion people may have a debt-free start to the new millennium. The people of Nicaragua and in the remainder of the developing world deserve no less.

From Viewpoint, Lancet 1998; 352: 1622-24

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Footnotes

References
^[1]Garfield R, Williams Health and Revolution: the Nicaraguan experience, Oxford: Oxfam, 1989

^[2] Chomsky, N World Orders, old and new, London: Pluto Press, 1994

^[3] George S A fate worse than debt London: Pelican, 1989

^[4] Sandiford P, Morales P, Gorter A, Coyle E, Smith GD Why do child mortality rates fall? An analysis of the Nicaraguan experience, AM J Public Health 1991: 81:30-37

^[5] Evans T, Castro C, Jones J Structural adjustment and the public sector in Central America and the Carribean CRIES, Managua, Nicaragua, 1995

^[6] Witness for Peace, Bitter Medicine: Structural Adjustment in Nicaragua, Washington: Witness for Peace Publication, 1995

^[7] Yuill H, Lobbying on ESAF and Debt Reduction, Nicaraguan Solidarity Campaign, discussion document. London, July, 1997

^[8] Peabody JW, Economic Reform and health sector policy: lessons from structural adjustment programmes Soc Sci Med 1996; 43:823-35

^[9] Lundy P, Limitations of quantative research in the study of structural adjustment, Soc Sci Med 1996; 42: 313-24

^[10] Bower H, Politics, passion, and health in Nicaragua Lancet, 1998; 351:43

^[11] Hanlon J, Peace without Profit: how the IMF blocks rebuilding in Mozambique, London: African Issues 1996

^[12] Logie D, Mozambique: investing in peace, Lancet 1998; 351: 982-83

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