Tag: World Bank

2 million babies stillborn worldwide: joint UN estimates

Aruna Patel (28) giving KMC to the new born child. Mothers of newborns are trained and educated on the benefits of KMC by hospital staff. Location: Baria District Hospital, Baria, Gujarat, July 2020. Photo- Vinay Panjwani, UNICEF.

One stillbirth occurs every 16 seconds, according to first-ever joint UN estimates. COVID-19-related health service disruptions could worsen the situation, potentially adding nearly 200,000 more stillbirths over a 12-month period.

NEW YORK/ GENEVA, 8 October 2020– Almost 2 million babies are stillborn every year – or 1 every 16 seconds – according to the first-ever joint stillbirth estimates released by UNICEF, the World Health Organization (WHO), the World Bank Group, and the Population Division of the United Nations Department of Economic and Social Affairs.

The vast majority of stillbirths, 84 percent, occur in low- and lower-middle-income countries, according to the new report, A Neglected Tragedy: The Global Burden of Stillbirths. In 2019, 3 in 4 stillbirths occurred in sub-Saharan Africa or Southern Asia. A stillbirth is defined in the report as a baby born with no signs of life at 28 weeks of pregnancy or more.

“Losing a child at birth or during pregnancy is a devastating tragedy for a family, one that is often endured quietly, yet all too frequently, around the world,” said Henrietta Fore, UNICEF Executive Director. “Every 16 seconds, a mother somewhere will suffer the unspeakable tragedy of stillbirth. Beyond the loss of life, the psychological and financial costs for women, families, and societies are severe and long-lasting. For many of these mothers, it simply didn’t have to be this way. A majority of stillbirths could have been prevented with high-quality monitoring, proper antenatal care, and a skilled birth attendant.”

The report warns that the COVID-19 pandemic could worsen the global number of stillbirths. A 50 percent reduction in health services due to the pandemic could cause nearly 200,000 additional stillbirths over a 12-month period in 117 low- and middle-income countries. This corresponds to an increase in the number of stillbirths by 11.1 percent. According to modeling done for the report by researchers from the Johns Hopkins Bloomberg School of Public Health, 13 countries could see a 20 percent increase or more in the number of stillbirths over a 12-month period.

Most stillbirths are due to poor quality of care during pregnancy and birth. Lack of investments in antenatal and intrapartum services and in strengthening the nursing and midwifery workforce are key challenges, the report says.

Over 40 percent of stillbirths occur during labor—a loss that could be avoided with access to a trained health worker at childbirth and timely emergency obstetric care. Around half of the stillbirths in sub-Saharan Africa and Central and Southern Asia occur during labor, compared to 6 percent in Europe, Northern America, Australia, and New Zealand.

Even before the pandemic caused critical disruptions in health services, few women in low- and middle-income countries received timely and high-quality care to prevent stillbirths. Half of the 117 countries analyzed in the report have coverage that ranges from a low of less than 2 percent to a high of only 50 percent for 8 important maternal health interventions such as C-section, malaria prevention, management of hypertension in pregnancy, and syphilis detection and treatment. Coverage for assisted vaginal delivery – a critical intervention for preventing stillbirths during labor – is estimated to reach less than half of pregnant women who need it.

As a result, despite advances in health services to prevent or treat causes of child death, progress in lowering the stillbirth rate has been slow. From 2000 to 2019, the annual rate of reduction in the stillbirth rate was just 2.3 percent, compared to a 2.9 percent reduction in neonatal mortality, and 4.3 percent in mortality among children aged 1–59 months. Progress, however, is possible with sound policy, programs, and investment.

“Welcoming a baby into the world should be a time of great joy, but every day thousands of parents experience unbearable sadness because their babies are stillborn,” said Dr. Tedros Adhanom Ghebreyesus, WHO Director-General. “The tragedy of stillbirth shows how vital it is to reinforce and maintain essential health services, and how critical it is to increase investment in nurses and midwives.”

The report also notes that stillbirth is not only a challenge for poor countries. In 2019, 39 high-income countries had a higher number of stillbirths than neonatal deaths and 15 countries had a higher number of stillbirths than infant deaths. A mother’s level of education is one of the greatest drivers of inequity in high-income countries.

In both low- and high-income settings, stillbirth rates are higher in rural areas than in urban areas. Socioeconomic status is also linked to a greater incidence of stillbirth. For example, in Nepal, women of minority castes had stillbirth rates between 40 to 60 percent higher than women from upper-class castes.

Ethnic minorities in high-income countries, in particular, may lack access to enough quality health care. The report cites that Inuit populations in Canada, for example, have been observed to have stillbirth rates nearly three times higher than the rest of Canada, and African American women in the United States of America have nearly twice the risk of stillbirth compared to white women.

“COVID-19 has triggered a devastating secondary health crisis for women, children, and adolescents due to disruptions in life-saving health services,” said Muhammad Ali Pate, Global Director for Health, Nutrition and Population at the World Bank and Director of the Global Financing Facility for Women, Children, and Adolescents. “Pregnant women need continued access to quality care, throughout their pregnancy and during childbirth. We are supporting countries in strengthening their health systems to prevent stillbirths and ensure that every pregnant woman can access quality health care services.”

Source- WHO,7 October 2020.

What could be wrong with a fiscal deficit?

If wealth inequality is to be prevented from becoming worse than the horrendous level it has already attained, then the only way this can be done is by larger government spending that is financed by a tax on the rich, either a profit tax or a wealth tax


By Prabhat Patnaik

I have written about this in the past, but since bad economics comes thick and fast from the representatives of finance capital, especially the Bretton Woods institutions located in Washington DC, there is no harm in repeating myself.

The issue relates to a fiscal deficit and has acquired urgency at present because revenues of governments everywhere in the world, including India, have declined owing to the pandemic-induced lockdown, while the need for government spending on relief and healthcare has escalated steeply, necessitating large fiscal deficits.

Two grossly erroneous propositions are advanced in this context by the representatives of finance: one, that a fiscal deficit beyond a certain limit (usually 3% of GDP) must always be avoided as it either tends to be inflationary (if it is monetized, i.e. if the additional government borrowing it causes comes from the Central Bank), or crowds out private investment (if the additional government borrowing comes from the private sector). Throughout this discussion, I shall ignore for simplicity the case of borrowing from abroad.

The second erroneous proposition is that if instead of borrowing, the government finances its expenditure by selling some assets of its own, like public sector equity or government land, then there will be no ill-effects like those of a fiscal deficit. In fact, the sale proceeds from these assets are shown as government income, on a par with its tax revenue, and hence the enlarged fiscal deficit disappears. Let us examine these two propositions to see why they are wrong.

In an economy where there is underutilized capacity and unemployment, i.e. an economy which is demand-constrained, a fiscal deficit, even if financed by government borrowing from the Central Bank cannot possibly be inflationary. Inflation occurs if supply cannot increase while demand increases, at base prices; but in an economy, which is demand-constrained, an increase in demand will cause an increase in output and hence supply, and not in prices. Hence there is no question of its being inflationary in a situation like the present one, where both underutilized capacity and unemployment exist.

The only difference that borrowing from the Central Bank, as opposed to borrowing from the private sector makes, is the following: if the government borrows from the Central Bank which prints money and gives it to the government, then the government’s spending puts this money into private hands. If the government borrowed instead of the private sector, then that would put government bonds into private hands. If money is put into private hands, then they hold claims upon the Central Bank which in turn holds claims upon the government (against which that money was printed): hence the private sector holds claims upon the government indirectly. But if the government borrows directly from the private sector, then it holds claims upon the government directly. That is all the difference there is between the two situations.

We have been talking about the “private sector”, but since workers more or less consume what they earn, it is the capitalists whose savings increase because of the fiscal deficit and who hold claims upon the government. And here, the real point to note is the following. The claims that capitalists hold against the government because of the fiscal deficit have been put into their hands by the fiscal deficit itself. It is a booty handed to them by the government which they have done nothing to earn. The resources which the government obtains for spending through a fiscal deficit come out of the larger output generated by the stimulus it provides, and the profit part of this output simply lands on the capitalists’ lap, a fraction of which they hold as savings, in the form of claims on the government.

This also tells us why a fiscal deficit is not a good way of financing government spending. It is not because of the spurious arguments put forward by the representatives of finance, but because a fiscal deficit increases wealth inequality. If, for instance, the government taxed away this booty through a profit tax or a wealth tax, then the capitalists’ wealth will remain the same as it was before the increase in government spending; but if it does not, then this wealth increases by exactly the amount of the fiscal deficit. This increases wealth inequality in the country.

Since a fiscal deficit puts wealth into the hands of the capitalists without their doing anything to earn it, it gratuitously increases wealth inequality in the economy; and that is what is wrong with it, compared for instance to tax-financed government spending.

As regards financing government spending through the sale of government assets, however, the International Monetary Fund (IMF) does not count it as part of fiscal deficit, which is absurd for the following reason. We have seen that a fiscal deficit puts (in a closed economy) an exactly equivalent amount of claims on the government in capitalists’ hands. These claims may be held indirectly, when capitalists hold money, or directly when they hold government debt. Sale to them of government assets, like public sector equity or government land, only changes the form of their claim on the government.

If public sector equity is sold, then such equity only replaces money in capitalists’ hands (if the deficit is financed by borrowing from the Central Bank); likewise, it only replaces government bonds when the deficit is not monetized. Hence the effect of selling government assets is absolutely no different from that of the conventional fiscal deficit. In fact, government spending financed by the sale of government assets should be counted as a fiscal deficit, exactly on a par with spending financed by the sale of government bonds.

But then why does the IMF think otherwise? The reason is entirely ideological. While there cannot possibly be any difference between two situations, one where the government finances its spending by putting claims upon itself in the form of government bonds in capitalists’ hands, and the other where the government spends by putting its equities in capitalists’ hands, the reason why the IMF counts the first as fiscal deficit and frowns upon it, while allowing the second, is because it wants the public sector to be privatized. It is this ideological preference that makes the IMF pretend that the sale of public sector equity should not be counted for fiscal deficit.

The same can be said of the sale of government land. While its economic consequences are exactly the same as government sale of bonds (which is what a fiscal deficit entails), it is not counted as fiscal deficit, as it should be. It is patently erroneous in short to treat the sale of government land as a revenue-raising measure. Yet many economists, influenced by the IMF’s thinking, do so.

This has an unfortunate consequence. Whether the government spends by selling bonds or by selling land also makes no difference to the fact that it increases wealth inequality. A fiscal deficit increases capitalists’ wealth by putting government bonds (or money) in their hands over and above the wealth they had before the government decided to spend more by resorting to a fiscal deficit. Putting land or public sector equity into capitalists’ hands makes not an iota of difference to this fact; it only changes the form of their wealth, not the fact of capitalists getting additional wealth and hence there being an increase in wealth inequality in society.

While an increase in government spending in India in the current circumstances is a must, given that the Indian economy is demand-constrained, advocating that this spending should be financed through a sale of government land displays a lack of awareness, both of the fact that selling land is no different from a fiscal deficit, and that it also entails an increase in wealth inequality.

If the economy is to be stimulated and if wealth inequality is to be prevented from becoming worse than the horrendous level it has already attained, then the only way this can be done is by larger government spending that is financed by a tax on the rich, either a profit tax or a wealth tax.

Source- peoplesdispatch.org

26 July, 2020

Viewpoint: Decline in global poverty is a farce perpetuated by World Bank’s Poverty Line

The real problem with the World Bank’s poverty estimates is that its International Poverty Line is set at an impossibly low level, which greatly underestimates world poverty.

World Bank Headquarters, Washington DC. Photo: WB site

By Prabhat Patnaik*

There is much self-congratulatory back-slapping among governments, World Bank officials and many economists about the “decline in poverty” that is supposed to have occurred between 1990 and the onset of the recent pandemic. This decline is claimed on the basis of an International Poverty Line (IPL) of $1.90 a day (at 2011 Purchasing Power Parity) worked out by the Bank, which basically defines poverty across the world as lack of access over one day to the bundle of goods that $1.90 would have bought in the US in 2011.

How ridiculously low this figure is, can be gauged from two facts. In 2011 in the US, $1.90 would have just sufficed to buy a cup of coffee, and nothing more. In India, the equivalent of $1.90 in 2011, with Rs 95 as the nominal exchange rate, would have been only Rs 29 at the PPP exchange rate, which would have barely purchased two bottles of drinking water.

By this definition, 1.895 billion persons or 36% of the world’s population were poor in 1990; the number had dropped to 736 million by 2015, which is ten per cent of the world’s population. This is the basis for the claim that “over a billion people have been lifted out of poverty in this period”.

Before we go any further, we need to examine even this claim. The fall in world poverty even by this criterion, is large because of China. In 1990 there were 750 million people in China below the IPL; this number had dropped to just 10 million by 2015, i.e., by 740 million. Thus, 64% of the number of persons “lifted above the international poverty line” was entirely on account of China. In fact, in Sub-Saharan Africa and the Middle East, over this very period, the headcount of the poor by this criterion increased by 140 million. If there is a real dent in poverty that has occurred anywhere in the world according to the World Bank’s estimates, then it is in China, which should temper the self-congratulations by the Bank and the economists adhering to its poverty estimates.

With a slightly different poverty line, $2.50 per day, the global headcount of poverty would not have come down at all between 1990 and 2010, if China is kept out. And, with a still higher IPL of $5.50 per day, the headcount would have increased from 2 billion to 2.6 billion between 1990 and 2015, if East Asia and the Pacific are kept out. So, the so-called decline in poverty is a highly localized phenomenon confined to China and the rest of East Asia.

But the real problem with the Bank’s poverty estimates, as already mentioned, is that its IPL is set at an impossibly low level, which greatly underestimates world poverty. This is a point which many on the Left have been making for a long time, but now even a UN Report prepared for the Human Rights Council has made the same point quite emphatically.

The reason for the underestimation of world poverty, according to the Bank’s estimate is quite simple: the Bank’s IPL is not based on any objective criterion such as the amount of spending required for meeting a defined set of “basic needs”, for meeting a nutritional benchmark, or any such thing. It simply takes the national poverty lines of 15 of the poorest countries, mainly belonging to Sub-Saharan Africa, converts these at purchasing power parity exchange rates (not at nominal exchange rates) to the value of the 2011 US dollar, and then takes an average of these to arrive at its IPL, which comes to $1.90 for 2011. The precise basis for these national poverty lines is not known; and as governments typically tend to pitch their poverty lines low in order to deliberately exaggerate their “achievements” in the realm of poverty eradication, these national poverty lines are already an underestimation.

In addition, there is no reason why the national poverty lines of some countries should be used for all countries, irrespective of national differences. In fact, the already existing national poverty lines of most countries are significantly higher than the World Bank’s IPL, so that the magnitude of world poverty, for this reason too, is much higher than what appears from using the Bank’s IPL.

And, finally, there are very few countries which have such elaborate nationwide sample surveys as India has – where there is a large-sample survey every five years and a small-sample survey every year, in addition to the infirmities of the IPL. Therefore there are added infirmities of the basic information about the respondents.

Besides, there are three further points that make the claim of a decline in the headcount ratio of poverty in the world quite untenable. The first is the fact that the typical price indices do not capture the actual rise in the cost of living. This can be illustrated with regard to Indian data. The price indices capture what a basket of commodities that a particular population was consuming in the base year would cost today, compared to the base year. Meanwhile, however, the composition of the basket changes, in reality, not always voluntarily but because the old goods and services gradually drop out of the basket while new ones get introduced.

The most important example here is the introduction of private healthcare and education because of the pursuit of neo-liberal policies. While it is perfectly possible that between the base year and the current year, the rates for surgery and other procedures in government hospitals may have remained unchanged, and hence the price of healthcare in the price-index would have remained unchanged, the increasing non-availability of government healthcare would be pushing more and more people to the much more expensive private healthcare facilities, thereby effectively raising their cost of healthcare.

The price-index movement here would understate the rise in the cost of living. Hence when we look at the IPL-equivalent for any set of years, the rise in the figure we get (from the price-index) would be lower than what the actual cost of living increases warrants. This would, therefore, exaggerate the decline in poverty over time (or understate the increase in poverty over time). The decline in poverty suggested by these figures, therefore, is wrong.

This is a major reason why the poverty line in India today is way below what it should be, if we took the original definition of poverty seriously, namely the expenditure-level at which a rural person accesses 2200 calories per day and an urban person accesses 2100 calories per day. The estimates of headcount poverty get correspondingly lowered, giving a spurious impression of a decline in poverty. This problem however is not just specific to India; it is a worldwide phenomenon under neoliberalism owing to the privatization of essential services.

The second reason why the claimed decline in world poverty would be wrong is the fall in primary commodity prices that occurred after 2011. Between April 2011 and December 2019, i.e., before the pandemic had made its appearance, there was a 38% fall in the IMF’s All-Commodities price index. This must-have worsened the living standards of large numbers of people in the third world. If this fact does not get reflected in their consumption, then that could only be because greater indebtedness might have enabled them to maintain their consumption at a given level. To claim a decline in poverty when consumption gets propped up through borrowing is absurd.

The third reason is analogous to the second – namely, the increase in unemployment that has occurred of late because of the intensification of the crisis of world capitalism, of which the decline in primary commodity prices is a fall-out. Because of larger unemployment, consumption must have either fallen or entailed greater indebtedness for its sustenance. In India for instance, unemployment prior to the pandemic had been the highest it has ever been in the last 45 years.

The fact that all these factors had an immensely adverse impact on the level of consumption in India is evident from the National Sample Survey data for 2017-18 on consumer expenditure, data that was so shocking that the Modi government decided to suppress it altogether. In rural India for instance, the per capita real consumption expenditure in 2017-18 was lower by 9 percent compared to 2011-12.

In this context, to claim that the headcount of the poor has declined in the world outside of China and East Asia, is absurd at best, even in the absence of nutritional data that suggests the very opposite.

* Prominent economist based in India.

Source: newsclick.com