Covid-19 and the Health Crisis in Latin America

Yanis Iqbal

Latin America has surpassed more than 5 million Covid-19 cases to overtake North America, with 4.8 million Covid-19 cases, as the region worst-hit by the Coronavirus pandemic. This astronomic increase in Covid-19 cases has been accompanied by a corresponding economic catastrophe of great magnitude. According to a United Nations Policy Brief entitled “The Impact of COVID-19 on Latin America and the Caribbean”, “Parts of Latin America and the Caribbean have become hotspots of the coronavirus (COVID19) pandemic, exacerbated by weak social protection, fragmented health systems and profound inequalities. COVID-19 will result in the worst recession in the region in a century, causing a 9.1% contraction in regional GDP in 2020…This could push the number of poor up by 45 million (to a total of 230 million) and the number of extremely poor by 28 million (to 96 million in total), putting them at risk of undernutrition.” The Policy Brief further states that “The sharp drop in economic activity is expected to lift the unemployment rate from 8.1% in 2019 to 13.5% in 2020. The poverty rate is expected to rise by 7.0 percentage points in 2020, to 37.2%, while extreme poverty is expected to rise by 4.5 percentage points, from 11.0% to 15.5%, which represents an increase of 28 million people.”

Structural Adjustment Programs and Public Health System

The present-day health catastrophe in Latin America, instead of being unprecedented and unexplainable, is deeply rooted in the neoliberalization of that entire continent’s economy. Beginning from the 1980s and 1990s, Latin America witnessed the advent of neoliberalism wherein capital accumulation and immiseration intensified. This neoliberal restructuring was done through the Structural Adjustment Programs (SAPs) that were composed of two phases. The first phase consisted of “stabilization” or the ostensible achievement of macroeconomic stability. In this case, stability was interpreted as an appropriate investment climate for the marauding operations of multinational corporations. Consequently, when this stability arrived, subsidies for transportation, food and other utilities got abolished; public employment perilously reduced; and austerity authoritarianism in the form of cuts in education and health expenditure delivered severe body blows to the social fabric of the Latin American continent. After the first phase of the stabilization, the second stage arrived, comprising of “(1) liberalization of trade and finances, which opens the economy to the world market; (2) deregulation, which removes the state from economic decision making and from mediating capital- labor relations; and (3) privatization of formerly public spheres that could hamper capital accumulation if criteria of public interest over private profit are left operative.”

As the innards of Latin America were laid open for the bandits of neoliberal capitalism, the continent soon witnessed the comprehensive destruction of its health infrastructure. With the implementation of SAPs under the watchful eye of International Financial Institutions (IFIs), the Latin American health sector underwent a painful process of defunding, disorganization, deregulation and privatization. The destabilization of the health system of an entire continent was discursively driven and informed by the World Bank document “Investing in Health”, a text which is single-minded in its promotion of private corporations. The World Bank document innocuously states that “Greater reliance on the private sector to deliver clinical services, both those that are included by a country in its essential package and those that are discretionary, can help raise efficiency. The private sector already serves a large and diverse clientele in developing countries and often delivers services of higher quality without the long lines and inadequate supplies frequently found in government facilities.” Here, World Bank innocently forgets to mention the fact that private health companies, being totally concerned with the unending accumulation of capital, are uninterested in providing accessible and cheap health services to impoverished people. The $3,000 Coronavirus care fee being demanded by private agencies in Peru corroborates the profit-oriented nature of private corporations. 

Through a maniacal boosterism of the privatization of healthcare, IFIs, with the help of their SAPs, were successful in instituting neoliberal reforms in the health sector of Latin America. Despite country-specific heterogeneity, “the basic elements of reform are strikingly similar and aim at constituting health insurance and services into a direct sphere of capital accumulation. However, since health care for poor people is usually not an attractive business, reforms tend to establish a dual health system with a market-driven subsystem for the insured and with an important private involvement and public assistance subsystem for the uninsured”. The definite dualisation of the health sector into a deregulated privatized section and an underfunded-overburdened public health system greatly increased the plight of the poor. Private corporations, embedded in a market matrix of government withdrawal and ever-shrinking administrative budgets, got access to new lucrative sites for surplus realization; the majority of the masses, on the other hand, experienced a degeneration in health services as austerity schemes reduced public health expenditure, economically weakened public health management and forced Latin American governments to adopt “selective poor relief”: a policy of scrapping universal health coverage and providing minimal services to the “poorest” and “neediest”. 

As various governments in Latin America progressively withdrew from the market and started promoting what World Bank had blithely called “greater diversity and competition in the financing and delivery of health services”, epidemiological regulation and disease surveillance in the sphere of public health suffered serious damage. A CSIS (Center for Strategic and International Studies) report states, “Effective disease surveillance remains a challenge in the region. The emigration of health professionals, the limited placement of healthcare centers in rural and low-income areas, and the restricted devotion of resources to emergency preparedness hamper the efficacy of regional health systems.” The atrophy of disease surveillance is a by-product of the abysmally low public health expenditure of Latin American governments which is, on average, well below 6%. In 2018, for example, 16 Latin American countries dedicated less than 4% of their GDP to healthcare.

Low public health expenditure on the part of Latin American administrations has produced ripple effect in the adjacent domain of economy and in this way it has exacerbated the Coronavirus economic crisis. Due to the absence of universal coverage and adequate public health facilities, the lower income households are forced to substantially increase their out-of-pocket health expenditure. During the Covid-19 pandemic, these lower-income households are facing an acute existential crisis: to avert the fatal consequences of Coronavirus, these households are desperately trying to access healthcare; on accessing healthcare, they are incurring “out-of-pocket costs that will force them to go into debt or to sell their productive assets, plunging them into deeper poverty.” This situation is particularly pronounced in Latin America where it is estimated that “On average, households in the region cover more than one-third of health care costs through direct out-of-pocket payments (34%), while nearly 95 million people incur catastrophic health expenditures [financial contributions to the health system exceeding 40% of a household’s non-subsistence income]and nearly 12 million become poorer as a result of these expenditures.”

Informalization and Imperialism

The economic effects of low public health expenditure in Latin America have been amplified by two related economic features produced by the previous SAPs. Firstly, the SAPs initiated the informalization of the Latin American labor market through the trade liberalization and deregulation of industry, commercialization of agriculture and layoffs in public services. With the penetration of global capitalist dynamics into Latin American economy, “There has been an explosion of people who scratch out a living through the provision of whatever service they are able to market since the informal sector has been the only avenue of survival for millions of people thrown out of work by contraction of formal sector employment and by the uprooting of remaining peasant communities by the incursion of capitalist agriculture.” In the contemporary period, 55% of the Latin American working population is engaged in the informal economy. Informal activities, by avoiding social security contributions and payroll taxes, do not have access to unemployment benefits, health insurance schemes and injury insurances. Informal work, therefore, “is vulnerable, low-quality and precarious, and lacks access to legal protection, modern capital markets, formal training and official social security systems”. Consequently, the workers enrolled in these informal activities are more exposed to the risks of a massive health shock like Covid-19 given their occupational insecurities and economic precarity. 

Secondly, SAPs, by liberalizing trade flows, allowed for the unencumbered entry of foreign capital.  Through the entry of foreign capital, Latin America got imperialistically integrated into the unequal arrangements of global capitalism and became a peripheral continent structurally subordinated to the core nations of capitalism. With the opening of Latin American economies to the corporations of the Global North, the countries of that continent experienced enormous economic changes: Latin American countries got reduced to the mere exporters of specific commodities; and with the consolidation of that export-oriented commodity structure, a simultaneous process of domestic de-industrialization took place as foreign capital, concentrated in the trade of specific resources, exploited the country through low labor units costs and repatriated its large profits. Overall, the installation of an export-oriented economy in Latin America undermined domestic production capabilities and increased the continent’s external dependency on the Global North in the form of the necessity of imports. Therefore, “While Latin American countries exported primary goods like food products, lumber and minerals to the Global North, they tended to re-import manufactured products from these same countries. The value added to these manufactured commodities — typically constructed from the primary inputs imported earlier — generated profit for northern countries while maintaining Latin American countries in a perpetual trade deficit.”

In the midst of the Covid-19 pandemic, the destructive effects of imperialism and dependency are visible from the lack of medical supplies in Latin America. According to the United Nations Economic Commission for Latin America and the Caribbean (UNECLAC), “Latin America and the Caribbean is highly dependent on imports of medical products, as less than 4% of these are sourced within the region itself. To date, more than 70 countries —including four of the region’s top five suppliers, of which the first is the United States— have restricted their medical exports in response to COVID-19. Export restrictions are hampering the supply of products essential for fighting the pandemic in the region.” Through restrictions on medical exports, the countries of the Global North are disallowing the poorer nations of Latin America from accessing essential medical supplies such as surgical masks, gloves, N-95 respirators, mechanical ventilators, test kits, disinfectants and other personal protective equipments. The inability of Latin American nations to domestically procure medical equipments stems from their historical dependency on the Global North which has imperialistically pillaged and undermined the domestic production capabilities of that continent for decades. 

In Latin America, the catastrophic convergence of an economic and health crisis is deeply gendered. 86% of nurses in Latin America are female and due to this overrepresentation of women in the sectors most impacted by the Covid-19 pandemic, the female health workforce is experiencing increased pressure. As a result of a fragile and over-stretched public health system, women are being forced to cope with extreme working conditions, such as long working hours, increasing their risk to Coronavirus infection. Furthermore, the domestic confinement of female health worker’s families has aggravated the stress and insecurities of women’s lives by increasing the care-giving burden.  Despite all the risks and hardships being borne by the female health workforce, they are paid 28% less than male workers. This gender pay gap is a result of the SAPs which, by reducing public health expenditure, compelled the governments to segment the labor market on the basis of gender, allowing them to reduce the monetary stress induced by health austerity policies. 

USA’s Hostility to Socialized Medicine

With the unabated march of the Covid-19 pandemic, the need for a new healthcare system for Latin America is being accentuated. While the oppressed masses of Latin America agree on the necessity of improving their continent’s health infrastructure, USA, the world hegemon, has incessantly undermined any regional efforts to radically re-institute the regime of neoliberalism. Here, the examples of Venezuela and Cuba are appropriate for expressing the American empire’s hostility to socialist healthcare. In 1999 and 2000, the Bolivarian government of Hugo Chavez began the construction of a socialist medical administration comprising of misiones or missions, social programs parallel to the state and creatively managed by communal participation. 

These missions were successful in crafting a robust, participatory and communally managed system of public healthcare. The Barrio Adentro mission, for example, set up well-functioning community health centers, dedicated to the humanistic motive of treating patients for free: “Each community health center has a multidisciplinary health team consisting of at least one physician specialized in integrated family medicine, a community health worker, and a health promoter. Moreover, each center is stocked with centrally purchased medications to be distributed at no cost to patients, as required. The health team personnel live in the barrios themselves.”

Angered by the ideological opposition of Venezuela, USA unleashed an imperialist war of sanctions against the country, cruelly punishing it for providing free healthcare to its citizens. The aim of this imperialist war was the crippling of the state corporation PDVSA or Petroleum of Venezuela, a major revenue earner for an oil-dependent country. With the help of sanctions and its Arab ally Saudi Arabia (which deliberately depressed oil prices), USA has managed to significantly dent Venezuela’s economy and thus, dismantle the country’s socialist medical infrastructure. 

Cuba is another country which has been facing the wrath of imperialist USA for socializing the medical system through a revolution. Through an ever-lasting economic warfare beginning from 1959, USA has tried to undermine the socialist programs of Cuba and destroy its public health experiment. Despite continued US attempts at economically destabilizing the nation, Cuba has maintained its infrastructure of medical internationalism and socialist health system. The current health system of Cuba represents a unified and generalized medical administration, predicated on the moral economy of revolution. It is based on what Che Guevara poetically wrote in “Revolutionary Medicine” back then in 1960: “The life of a single human being is worth a million times more than all the property of the richest man on earth … far more important than good remuneration is the pride of serving one’s neighbor. Much more definitive and much more lasting than all the gold that one can accumulate is the gratitude of a people. And each doctor, within the circle of his activities, can and must accumulate that valuable treasure, the gratitude of the people”

As the Covid-19 pandemic intensifies, anti-imperialist opposition to USA is growing. The complete collapse of healthcare in USA, the concomitant crumbling of Latin America’s health system due to the continent’s neoliberalization and external dependency on the Global North, is forcefully foregrounding the prospects of a socialist health regime. Socialized medicine, which had until now seemed unimaginable, appears perfectly conceivable as the capitalist health system sacrifices millions of people at the altar of profit and collapses under the weight of its own contradictions.