Sad Business School

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Saïd Business School

• 1-3 September 2004

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The Macro-Economic Context

• Professor Gordon L Clark
• University of Oxford

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2. Oxford Vision 2020

• The macro-economic context
• 1st world 3rd world futures linked
• As the OECD countries age, financial burdens loom
• Issues of inter-generational equity and
  international equity will be more important than
  ever before.

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3. Oxford Dialogue, 21 May 2004

• Specialists discuss the issues
• Economists, finance specialists, geographers and
  WHO policy analysts
• Goldman Sachs, Harvard MS, the IMF, the Stockholm
  Institute, Oxford, Novo Nordisk and the Social
  Investment Forum

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4. OECD Prospects (30 years)

• The retirement of the baby-boom generation
• Related health costs and long-term care issues
• Significance of chronic disease, including
  diabetes, dementia, and the like
• Fiscal burdens on nation-states, given limits on
  domestic tax rates in the context of
  globalization
• How are we to avoid 19th century poverty?

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5. OECD Prospects (30 years)

• Must increase rate of economic growth
• Focus upon labour productivity, competitiveness
  in global markets
• Require macro and micro policies aimed at
  enhanced flexibility and efficiency
• Encourage closer linkages between the developed
  and developing countries

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6. Global Prospects (the BRICs)

• Will become the most important consumer markets
• Rates of economic growth are remarkable, albeit
  perhaps not environmentally sustainable
• middle-class consumption is rapidly expanding
• Suggesting a long-term transformation instead of
  the BRICs serving western markets with relatively
  cheap imports, OECD countries will compete to
  serve BRIC markets.

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7. Global Prospects (Africa etc)

• By contrast, poverty disease stalk Africa
• Perhaps reinforced by global climate change
  causing many to crop failures etc
• Challenging inherited local institutions
• In effect, a world of 4 regions (including Latin
  America as a sphere increasingly tied to NA).

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8. Global Tensions

• OECD countries resistant to immigration
• Inter-generational competition for resources may
  impoverish the old OR the young
• Flow of OECD financial assets to the
  rest-of-the-world may not result in a bilateral
  relationship
• Climate change hot spots like China and India
  may introduce competition for food
• Lethal combination of income deficits, food
  deficits, and increased disease load.

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9. USSR Experience Important

• Provides a lesson about the health consequences
  of rapid and profound economic change
• Prompting a significant decline in age expectancy
  and increasing untreated chronic diseases
• Highly differentiated in effecturban v rural,
  high income v low income etc
• In turn, reducing labour productivity and
  economic growth.

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10. Needed New Models of Health-care Financing
Delivery

• OECD countries may not be able to afford
  inherited systems of health care delivery
• US is an example of a very expensive system WITH
  high levels of inequality
• Prevention rather than treatment of disease may
  be the only way of avoiding long-term fiscal
  crisis
• But that requires a commitment to PUBLIC HEALTH
  now, in all its complexity.

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11. Impediments to Global Health

• Entrenched interests of medical institutions
• Short-term focus of political institutions
• Incentives for technological innovation at the
  margin of common needs
• Myopia of people, unwilling to recognize the
  connection between the SR and the LR
• Lack of a consumer culture wherein people can
  initiate their own care and treatment.

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12. Sources Webpage

• Clark, G. L. 2003. European Pensions Global
  Finance. Oxford Oxford University Press
• Cutler, D. 2004. Your Money or Your Life. New
  York Oxford University Press
• Heller, P.S. 2003. Who Will Pay? Washington
  DC IMF
• Slaughter, A-M. 2004. A New World Order.
  Princeton Princeton University Press
• http//www.geog.ox.ac.uk/mseifte/oxfordialogueweb
  /

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Saïd Business School

• 1-3 September 2004