How international financial institutions undercut human rights and impede public health

A review recently published in Public Health Reviews finds that people’s enjoyment of human rights are consistently undermined by policy reforms established by international financial institutions (IFIs). Here, authors of the study explain how these reforms, which are aimed at balancing the budget, impact health, labor and democratic rights.

The International Monetary Fund (IMF), World Bank, and regional development banks typically set the spending limits within which public health operates in developing countries. In exchange for loans, borrowing countries must settle on a list of policy reforms of direct bearing on human rights. These reforms have been widely criticized for diverting resources away from public health.

But the controversy surrounding international financial institutions (IFIs) will come as no surprise for some. In 2015, a United Nations report branded the World Bank “a human rights-free zone.… [that] treats human rights more like an infectious disease than universal values and obligations”.  More recently, a speechwriter to IMF Managing Director Christine Lagarde noted, “You cannot put human rights in a speech, it’ll be taken out.”

How does this aversion to human rights translate on the ground? We reviewed how policy reforms of IFIs impact upon the enjoyment of human rights. Our study found that they consistently undermine the enjoyment of health, labor, and democratic rights, all of which have deleterious implications for public health.

Health rights

The realization of the right to health is codified in the International Covenant on Economic, Social, and Cultural Rights (ICESCR). Yet, many loan reforms breach these obligations and are detrimental to public health.

Greece is an unsettling case in point. The country sought the assistance of IFIs to finance debt repayments. The government initially borrowed €110 billion from the IMF and Eurozone partners under strict condition that there would be drastic curtailing of government spending.

Cuts to municipal budgets led to scaling back of mosquito-spraying programs, resulting in the re-emergence of locally transmitted malaria for the first time in 40 years.

Cuts to municipal budgets led to scaling back of mosquito-spraying programs, resulting in the re-emergence of locally transmitted malaria for the first time in 40 years. Public hospital budgets were reduced by 26%, leading to staff overwork, increasing waiting lists, and shortages of medicines and medical equipment. Prevention and treatment programs for illicit drug use also faced cuts, leading to increases in HIV infections from intravenous drug users.

Further examples abound. West African countries on IMF programs included reforms that reduced government health expenditure. This weakened health systems and exacerbated the Ebola crisis. IFI reforms are especially damaging for vulnerable populations, triggering increases to infant, child, and maternal mortality rates.

Labor rights

Labor rights are incorporated in the ICESCR, the International Covenant on Civil and Political Rights (ICCPR) and International Labour Organisation (ILO) conventions. Together, they articulate the right to participate in work, to just working conditions, to freedom from forced labor, and to freedom of association.

IFI reforms directly affect these rights. Their basis is supply-side economics, which posits that firms invest more when labor markets are flexible and when the costs of labor protections are low. Yet, the UN Human Rights Council concluded that such policies contravene international human rights obligations by eroding labor rights.

Many of these reforms are wage caps and employment limits, impeding the right to work. IFIs also promote reforms to social security institutions and the deregulation of labor laws. These include labor laws that legalize temporary work contracts, extend probation periods, remove barriers to firing workers, reduce employee entitlements, and dismantle rights to form and join labor unions and to collectively bargain. Welfare services have also been cut, leaving vulnerable groups without access to income.

Diminishing labor rights have perverse implications for public health. People without decent work and working conditions—that is, adequately paid, relatively stable, properly regulated, and with collective representation—typically experience a cascade of detrimental mental and physical health consequences over the life-course.

Democratic rights

Democratic rights are also codified in the ICCPR. These denote the right to protection from torture and political imprisonment, to vote, to freedom of speech and the press, and to not be discriminated against on the basis of ethnicity, gender, sexual orientation, language, religion, social class, or political opinion.

Protecting democratic rights requires government spending on training, compensating, and monitoring of judges, police, and the military. Yet, IFIs typically inhibit government spending.

Protecting democratic rights requires government spending on training, compensating, and monitoring of judges, police, and the military. Yet, IFIs typically inhibit government spending. This explains why IMF programs deteriorate levels of respect for women’s rights.

The infringement of health and labor rights entailed by IFI policy reforms also contributes to rises in social protest. This can lead to violent repression by the ruling government, amounting to breaches of democratic rights.

For example, limited progress in Bolivia after a decade of successive IFI programs came to a heads in the early-2000s. People protested on the streets following increases in unemployment and poverty, reductions in real wages, cuts in social expenditures, and—most infamously—the privatization and price hikes of Cochabamba’s water system. The government responded by declaring a state of emergency and escalated use of force against protestors.

Breaches in democratic rights are a bane for public health. Violent repression results in injury and causalities. Unchecked civil conflict can also lead to physical destruction of health facilities, and, in its worst form—such as a full- fledged civil war—the total collapse of a nation’s health system.

Respect for human rights

With the highly salient human rights violations in Greece in recent memory, the UN released a statement reiterating that IFIs are “bound by any obligations incumbent upon them under general rules of international law.”

IFI policy reforms should be designed with human rights as a core consideration. Prior to their implementation, an impact assessment should be carried out in consultation with relevant stakeholders, including public health experts, the ILO, and the UN Human Rights Council.

What is clear is that improvements in public health will follow a concerted effort to meet internationally agreed-upon human rights obligations. It is therefore time for IFIs like the IMF and World Bank to take this prescription seriously.

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