Economist Jeffrey Sachs Good Health, Good Wealth

Monday, April 01, 2002
RELATED TAGS: HEALTH POLICY

Jeffrey Sachs
Photograph by Emily Shur
Jeffrey Sachs spent the last decade of the 20th century zipping around the world, advising countries from Bolivia to Mongolia on how to overhaul their economies. Now the renowned Harvard economist has a new global mission: to overhaul the world's health. As chairman of the World Health Organization's Commission on Macroeconomics and Health, he recently oversaw a report showing that a small investment in health care in poor countries—about $34 per person per year—would not only reduce disease but would be a boon for the global economy. He discussed this linkage with associate editor Josie Glausiusz.

What first fed your interest in the economics of human health?
I was spending time in very poor countries, and I was quite shocked by the amount of dying that I was seeing around me. For instance, I was working in Zambia in the mid-1990's on a project with the Central Bank. Roughly seven or eight of the thirty professional counterparts on that project died of AIDS within three or four years. I started to ask myself whether this enormous burden of disease was impacting economic performance.

How does poor health hinder economic performance?
Take malaria. In most cases, people with malaria are sick for a few days. If it's an adult, they stay home from work. If it's a child, maybe the caregiver stays home from work. But the effects of diseases like malaria are far more pernicious. For example, malaria stops tourism. You also have losses of foreign investment, you have limitations on international trade, you have reductions of migration into and out of malarial regions.

How would investment in health care boost the world's economy?
Focussing on AIDS, tuberculosis, malaria, diarrheal disease, acute respiratory infection, vaccine-preventable diseases, safe childbirth and micro-nutrient deficiency could save millions and millions of lives per year, with all of the attendant economic benefits. For example, there are the villages in Malawi where a whole generation is being lost to AIDS. There are a few grandmothers there, and dozens of orphaned children. If these people were treated with anti-retroviral drugs, the mothers and fathers could raise their children, be out in the field growing crops, and so on.

What will it take to make a serious improvement in global health?
Right now, all the rich countries put together give $6 billion a year in health aid to poor countries, out of a total aid budget of $50 billion a year. That total is two tenths of one percent of their $25 trillion gross national product. By the way, the United States is the bottom of all the donors in terms of aid per GNP. Our report calls for $27 billion per year in health aid alone to make a massive, credible, needed, justified attack on this disease burden.

What would that money buy?
Thirty to forty dollars per capita would cover anti-retroviral therapy for AIDS, bed-nets for malaria, directly observed therapy for tuberculosis, vaccines, oral rehydration solutions for life-threatening diarrhea, antibiotics for acute respiratory infection, and midwives for attendance at childbirth.

What about other measures needed to protect human health—such as sanitation? Does this money cover that too?
It does not. There needs to be money for basic education. There needs to be money for water and sanitation, for environmental management. I do believe that the rich countries ought to be meeting a aid target that was set thirty years ago of seven-tenths of one percent of GNP. That would be, in my view, the best investment we could make in a stable and increasingly prosperous world.

How do you make the case for funding health programs when fighting terrorism is top of the U.S. agenda?
We argue that there are huge social benefits for the rich countries as well, in not living in a world endangered by mass social instability, the spread of pathogens across international borders, and the spread of all the other ills, whether it's terrorism, drug trafficking or all the other calamities that accompany state failure.

In fact, one of the most innovative studies that the CIA sponsored in the last decade—the task force on state failure—found that three factors are the best predictors of state collapse. One is having authoritarian regimes, because democracies really are stabilizing. Second is having closed economies. Third is a high rate of infant mortality. Terrorists thrive in environments of collapse, whether it's in Africa or whether it's in Afghanistan. The fact that Afghanistan is one of the most impoverished and collapsed of societies in the world before the Taliban came to power is not coincidental with the Taliban hosting Al-Qaida afterwards.

Wouldn't it make more sense to cancel the debts of poor countries?
Absolutely! If you cancel all the debts, these countries would save a few billion dollars per year. A lot of what they are paying is at the expense of human lives; there's no question about it. The problem is that even if you did the comprehensive debt cancellation, it wouldn't actually meet the $27 billion that's needed.

What about the role of the pharmaceutical industry? Is there a need changes in the way they operate?
I think that the pharmaceutical industry is by far one of the most productive innovators in the modern world. And when you develop a new retroviral, it's perfectly right that that price should be high enough in the rich country markets to generate the returns that justify the R&D. But the production cost of those anti-retrovirals may be about one-thirtieth of the market price. So that gives us a great opportunity: preserve the capitalistic market for pharmaceuticals in the rich world, but have the industry agree to provide its drugs at production cost for the poor countries.

What impact would this have?
Recently I visited Malawi's main hospital, Queen Elizabeth Hospital in Blantyre. We were taken to the medical ward. There were three or four patients to a bed, usually two on the bed and one or two underneath the bed, literally lying on the floor. Almost the entire ward was people dying of AIDS. And nobody was getting anti-retrovirals. Right next door, down the hall, is an outpatient clinic where the people that can afford a dollar a day, which is a tiny fraction of the Malawians, were getting anti-retroviral therapy. At a cost of about $350 per year, you have a few hundred people staying alive, and you have thousands and thousands of dying for lack of this minimal sum.

What's your view on population control?
In principle, you would think that improved health care could exacerbate the rapid population growth in the world's poorest countries. But the paradox is that it is precisely the countries with the highest disease burden that have the highest population growth. That comes from the fact that households react to high death rates by very high fertility rates. The demographic transition takes place only when disease is gotten under control.

You helped devise economic transitions in Eastern Europe. How have those changes affected health and environment?
There is a very sharp divide of what happened between Eastern Europe and the former Soviet Union. Half of Poland's debts were cancelled, and Poland actually had a significant improvement of health, higher life expectancy, and a much improved diet: much more fruit and vegetables, much less lard and cholesterol. But the West did not want to help Russia. It was too close to the Cold War. So in Russia and the former Soviet Union there was a terrible health decline.

Do you think global health is getting better or worse? What are some of the success stories?
On the whole, there were remarkable gains in the 20th century: a marked increase of life expectancy and a marked decrease of infant and child mortality. There was also the expectation that we were on the verge of conquering infectious disease. Of course, with the AIDS pandemic, the resurgence of malaria and tuberculosis, and the emergence of many new diseases, we have sobered up to the much deeper nature of this battle.
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