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Saïd Business School 1-3 September 2004. The Macro-Economic Context Professor Gordon L Clark University of Oxford.

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Presentation on theme: "Saïd Business School 1-3 September 2004. The Macro-Economic Context Professor Gordon L Clark University of Oxford."— Presentation transcript:

1 Saïd Business School 1-3 September 2004

2 The Macro-Economic Context Professor Gordon L Clark University of Oxford

3 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.

4 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

5 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 19 th century poverty?

6 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

7 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.

8 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).

9 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.

10 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 effect—urban v rural, high income v low income etc –In turn, reducing labour productivity and economic growth.

11 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.

12 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.

13 12. Sources & Webpage Clark, G. L European Pensions & Global Finance. Oxford: Oxford University Press Cutler, D Your Money or Your Life. New York: Oxford University Press Heller, P.S Who Will Pay? Washington DC: IMF Slaughter, A-M A New World Order. Princeton: Princeton University Press

14 Saïd Business School 1-3 September 2004


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