Maternal mortality - Assam, India and the World

Maternal mortality is defined as the death of women while pregnant or within 42 days of termination of pregnancy. Death may be due to any cause related to or aggravated by pregnancy and its management. Maternal mortality rate (MMR) is the number of maternal deaths per 100,000 live births in one year.

In many developing nations, complications of pregnancy and childbirth are the leading causes of death among women of reproductive age. More than one woman dies every minute and 585,000 women die every year from such causes. Less than one percent of these deaths occur in developed countries, demonstrating that these could be avoided if resources and services were available. The gap between maternal mortality between developed and developing regions is wide.

In addition to maternal death, women experience more than 50 million maternal health problems annually. As many as 300 million women (more than one-quarter of all adult women living in the developing world) currently suffer from short or long term illness and injuries related to pregnancy and childbirths.

Every woman can experience sudden and unexpected complications during pregnancy, childbirth and just after delivery. Although high quality, accessible health care has made maternal death a rare event in developed countries, these complications can often be fatal in the developing world. Women risk death and disability each time they become pregnant. Women in developing countries face these risks much more often, since they bear many more children than women in the developed world, apart from other reasons.

At least 40 percent of women experiences complications during pregnancy, childbirth and the period after delivery. An estimated 15 percent of these women develop potentially life-threatening problems. Long term complications can include chronic pain, impaired mobility, damage to the reproductive system and infertility. Women’s poor health during pregnancy, inadequate care during delivery and lack of newborn care cause almost 8 million still births and neonatal deaths (death within one week of birth) each year. A study in Bangladesh found that a mother’s death sharply increased the probability that her children, up to age 10, will die within 2 years. This was especially true for her daughters.

Women’s risk of dying from pregnancy and childbirth varies by regions around the world:

All Developing countries -1 in 48

Africa -1 in 16

Asia -1 in 65

Latin America and Caribbean -1 in 130

All Developed countries -1 in 1,800


Europe -1 in 1,400

North America -1 in 3,700

Country-level differences are even more dramatic. For example, in Ethiopia, 1 out of every 9 women dies from pregnancy-related complications, as compared to 1 in 8,700 in Switzerland.

The Indian Scenario: Surveys, special studies or indirect estimation of MMR have been made to assess levels of maternal mortality in India. Estimates of MMR vary between 400-500 per 100,000 live births. According to World Health Organization (WHO) estimates, India accounted for 25.7 percent of maternal deaths in the world in 2000 (i.e. 136,000 out of 529,000 global maternal deaths occurred in India). This is the highest for any single nation in the world. Maternal mortality in India varies by region and state. MMR is higher in the eastern and central regions and lower in the north western and southern regions. Socio-economic variations are not well documented in India.

A report, “Advocating Accountability: Status Report on maternal Health and Young People’s Sexual and Reproductive Health and Right in South Asia”, prepared by South Asian Association for Regional Cooperation (SAARC) revealed the above figures about India, maintaining that the main cause was the unskilled birth attendants. The overall MMR of the SAARC region was 500 per 100000 live births, which is among the highest in the world. The region also accounts for approximately 7.2 million unsafe abortions annually according to the report.

Another report on “Maternal and Newborn Health”, released in Jaipur on January 24, 2009, by the UNICEF says about 8000 women and 1.17 lakh children die every year in Rajasthan due to complications arising out of pregnancy and child birth. While Rajasthan contributes about 7 per cent of the total live births in India, it accounts for 9.2 per cent of the total maternal deaths.

MMR under Sample Registration System (SRS) in some of the Indian States (1998):

Uttar Pradesh - 707 (As per January 2009 Report, Uttarakhand ranks first with MMR of 517)

Rajasthan – 670 (445 as per January 2009 Report, ranking 3rd at present in MMR)

Madhya Pradesh – 498

Bihar – 452

Assam – 409 (490 as per the January 2009 Report, ranking 2nd in terms of MMR)

Orissa – 369

West Bengal – 266

Punjab – 199

Kerala – 198

Karnataka – 195

Andhra Pradesh – 154

Maharashtra – 135

Haryana – 103

Tamil Nadu – 79

Gujarat - 28 (lowest)

All India – 407


There was an overall relative decline in maternal mortality of nearly 24 percent during 1997-2001. This included a 16 percent decline in the 8 Empowered Action Group (EAG) states of Bihar, Jharkhand, Orissa, Madhya Pradesh, Chattisgarh, Rajasthan, Uttar Pradesh and Uttaranchal. In contrast, MMR has fallen by only 7 percent in the southern states of Andhra Pradesh, Karnataka, Kerala and Tamil Nadu. MMR has declined from 398 in 1997-98 to 301 in 2001-2003 in India according to a report on ‘Maternal Mortality in India: 1997-2003 – Trends, Causes and Risk Factors’. MMR is higher in the EAG states and Assam than in the other states in India. In 2001-03, lifetime risk of a woman dying during childbirth was 1.8 percent in the EAG states and in Assam, 0.4 percent in the southern states and 0.6 percent in other states.

UNICEF’s latest report, “State of the World’s Children – 2009” says that in India, more than two-thirds of all maternal deaths occurred in U.P., Uttaranchal, Bihar, Jharkhand, Orissa, M.P., Chhattisgarh, Rajasthan and Assam. Despite an increase in institutional deliveries, 60 per cent of women still deliver their babies at home.


Causes of Maternal Deaths and Complications (most of which occur either during or shortly after delivery):

Research shows that common risk factors for maternal deaths are: a mother’s age below 20 years or above 35 years, illiteracy, poor socio-economic status and lack of antenatal care. Some of the commonly identified factors include bad obstetric history, anemia, maternal complications and diseases, delivery by an unskilled person and unsafe abortions. These can be further elaborated:

During Pregnancy: The percentage of women who seek antenatal (pre-delivery) care at least once, is 63 percent in Africa; 65 percent in Asia and 73 percent in Latin America and the Caribbean. At the country level, however, use of such services can be extremely low. In Nepal, for example, only 15 percent of women receive antenatal care. Poor or negligible care during pregnancy is an important factor in aggravating death.

During Childbirth: Each year, 60 million women give birth with the help of untrained traditional birth attendant or a family member or with no help at all. Almost half of births in developing countries take place without the help of a skilled birth attendant (such as a doctor or midwife), which increase the cases of casualties during birth.

After Delivery: The majority of women in developing countries receive no post-partum (after delivery) care. In very poor countries and regions, as few as 5 percent of women receive such care.


Causes preventing women in Developing Countries from seeking/getting their needed Life-Saving Health Care include:


• Distance from health services;

• Cost (direct fees as well as the cost of transportation, drugs and supplies);

• Women’s lack of decision-making power within the family;

• Multiple demands on women’s time;

• Poor quality of services, including shoddy treatment by health providers, makes some women reluctant to use services;

Most maternal deaths, many health problems among women and children, and also the deaths of at least 1.5 million infants each year could be prevented through:

• Routine maternal care for all pregnancies, including a skilled attendant (midwife or doctor at birth);

• Emergency treatment of complications during pregnancy, delivery and after birth;

• Post Partum (after delivery) family planning and basic neonatal (within a week of birth of baby) care. Such care would cost about $3 per person per year in low income countries. Basic maternal care alone can cost as little as $2 per person per year.

• Improvement of women’s status alongwith support from their husbands and raising awareness about the consequences of poor maternal health. Families and communities must encourage and enable women to receive proper care during and after delivery.

An analysis of the causes of decline in MMR in various western countries such as Sweden, Holland and Denmark, reveals that introduction of skilled midwives to conduct deliveries has led to reductions in maternal deaths as much as 250-300 per 100000 live births.

EDUCATIONAL INVESTMENT IN DEVELOPING COUNTRIES

In the context of economic development, the educational product as a whole not only includes components of consumption (enjoyment of the fuller life permitted by education) and direct investment (increased earnings to the educated person, i.e. “internal” gains of education), but also “external” gains which accrue to other members of the community, i.e. the economic and social system at large.

The most important characteristic of educational investment is externality. This aspect of external benefits of education lies in the change in the social and cultural climate, incident to the widening of horizons, which education entails. At the same time, this benefit result is not an automatic consequence of general education, but only of the proper type, quality and quantity of education. Supply of professional people who cannot be absorbed into appropriate positions may readily become an external diseconomy and source of instability.

Apart from the factor of externality, educational investment has certain other characteristics:
The product of education outlays carries the joint features of consumption and investment. For this reason, the share of resources allocated to education cannot be considered wholly an investment outlay. The consumption component of education may be divided into current consumption (the delights of attending school) and the future consumption (the ability to appreciate life more fully later on). Future consumption being the major element, the consumption component is largely in the nature of a durable consumer good and hence investment. Thus the essential distinction is not between consumption and investment aspects of education, but between education investment which generates imputed income (fuller life later on) and education investment which generates increased factor earnings to the labour supplied by the educated person.

The imputed-income component of education tends to be of particularly great importance at the early stages of development. Extension of secondary education becomes the primary goal of education policy in countries with a low level of education capital stock with extension of elementary education and technical training at the next level of capital stick and expansion of higher education at a more advanced stage.

Secondly, investment in education is characterized by a gestation period which is substantively longer than that of many other types of capital formation. Periods of ten to twenty years may be involved, depending on how far the education process is carried, and even longer spans may be involved if teacher training is taken into consideration. Even though certain skills may be acquired fairly rapidly, especially if a previous foundation is laid, the educational capital stock cannot be changed quickly, particularly for the more advanced type of education. This is a constraint in investment planning requiring public policy guidance and planning.

A further feature of investment in education is the relatively long useful life of the educational asset as compared to other competing investments. Obviously, there may well arise a difference between the government’s and the private investor’s allocation of share for education in investment outlays. The relatively long, useful life makes it necessary that the type of education be chosen in order to meet future demands in particular skills. This applies more to specialized and technical education. Thus, educational planning in the context of a longer-term development view is essential.

Finally, the resource cost of education not only includes teachers’ salaries, buildings and equipment, but also the opportunity cost of lost income on the part of the student. Where there is a general surplus of labour supply, the opportunity cost of foregone earnings will be small or non-existent. Other components of education cost (school teachers’ salaries in particular) tend to be relatively high in developing countries. So, even though the income stream from a given factor input into education will be large, the rate of return on educational investments is therefore not as high.

Sensible education targets must be developed by considering the needs of the particular economy and the demands posed by its specific plans in order to absorb additional supplies of educated manpower. The matter of educational priorities is of vital importance. Unless the right kind of education is provided, setting overall targets has little meaning. Educated persons who are unable to find suitable jobs, fail to add to the national product and also become a source of political instability. Since the cost of various types of education differs greatly, the very setting of overall targets has to be based on the composition of education supply.

Whether undertaken privately or in the public sector, the necessity for investment planning cannot be denied. Left to household decisions, neither market knowledge, nor foresight nor financial requirements are present which are needed to secure adequate supplies. This is especially the case in developing countries where the whole attitude towards education has to overcome conventional barriers and become reoriented to the development process.

AGEING OF POPULATION

Ageing is an inescapable reality of human existence and a vital factor in the global demographic transition. According to projections by the UN Population Division, there will be two elderly persons for every child in the world by 2050. This implies that the aged 60 and above, which currently constitute less than 20 per cent of the world population, will account for 32 per cent of the population by 2050.

Moreover, according to the UN agency, future fertility levels in most developing countries is expected to fall below 2.1 children per woman, which is the level needed to ensure the long-term replacement of the population at some point in the 21st century. Thus, with higher life expectancy and lower fertility levels, there will be more of elderly and less of young people in the age structure. This changing balance between the age groups would create multidimensional socio-economic problems both in developed countries (acute manpower shortage, for instance) and developing countries.

In India the age structure (urban) according to 2006 estimates was: 30.8 percent in the 0-14 age group, 64.3 percent in the 15-64 age group and 4.9 percent in the age group 65 years and above.

The average age of Indians is 26 years. Hence, talking of an old-age crisis in a country where nearly two-thirds of the population are below the age of 30 appears ludicrous, but there is no denying the problem. For countries like India and Thailand , it will take only 25 years for their aged population to get doubled. The population of senior citizens, aged sixty and above, in India has increased from 42.5 million in 1981 to 55 million in 1991 and then to 70.6 million in the 2001 census. They comprise about 6.9 per cent of the total population. It is estimated that the number of older persons will grow to 137 million by 2021 in our country.

In India, provisions have been made under legislations such as the Code of Criminal Procedure,1973 and the Hindu Adoption and Maintenance Act,1956 to enable aged parents with insufficient resources to meet their needs. However, the process under these legislations is cumbersome and time consuming. The Government of India adopted the National Policy for Older Persons in 1999. Recognizing that financial security is one of their needs, the Government of India commissioned a National Project titled 'Old Age Social and Income Security' (OASIS) in 1999 with an aim to draw up a comprehensive plan for the financial security of workers on retirement and old age in sectors where no formal arrangements for post retirement have been made. The Government covers around 32 million workers and their families under schemes for provident funds and health and insurance facilities. However, there is a need to reach out to many more who do not have access to such schemes and would be rendered vulnerable on attaining retirement and old age. The Older Persons (Maintenance, Care and Protection) Bill, 2005 which subsequently became an Act will hopefully meet this need.

The nations of the world had gathered at Vienna in 1982 for the First World Assembly on Ageing and brought out the International Plan of Action on Ageing. The Plan of Action was drawn up with clear understanding of the implications that the increase in the ageing population would have on the socio-economic structure of both the developed and developing countries. The basic aim of the Plan of Action

was to ensure that ageing is both a graceful and a productive process. The Second World Assembly on Ageing was at Madrid in 2002, which focussed on ageing agenda with current global developmental issues. Across the globe, steps have been taken by various countries such as the United States, Canada, the United Kingdom, New Zealand and Germany to provide social security systems for the elderly and other disadvantaged groups. Such systems ensure that senior citizens are not deprived of their most basic needs when they lack the resources to fulfil them.

The role of Non-governmental organizations is crucial in promoting the welfare of the aged. The Government of India provides financial assistance to NGOs for certain projects aimed at providing shelter and meeting recreational and medical needs of the elderly. Special privileges like old age pension, tax concessions and various amenities in the transportation and health services, provision of services at the grass root level by NGOs and emerging civil society groups which proactively voice the concerns of the aged are some of the encouraging developments in our country.

In India it is the last stage of life that society accords the highest respect and prestige to an individual. This is why old age home concept, though not alien, is rare in Indian families. However, globalization and its economic effects, is causing a silent and invisible transformation within the social structures. Fragmentation of the traditional family network is leading to an erosion of the available support within the immediate and extended family. Migration of younger generations from rural to urban areas and from one urban centre to another and transnational migration results in the elderly persons being left out to fend for themselves at a time when family support becomes more necessary. This has increased insecurity and loneliness among the geriatric (elderly) population. Poor financial status, physical and mental disorders and guilt of being dependent on others are some of the problems nagging the elderly population in India and other countries around the world. An ageing society will give rise to special problems from health, family and social angles.

Besides shelter, medicare and nutritional problems, the elderly population in India also faces a multi-dimensional socio-psychological pressure. A paper on the mental health of the ageing population by Dr. Vikram Patel and Martin Prince, points out that in the developing world, including India, the aged with psychological problems do not get the required medical attention. In particular, the study found that while dementia is considered a normal process of ageing that a doctor cannot help much, depression is rarely diagnosed or treated. An increasing number of older persons are also falling prey to other geriatric diseases such as rheumatism, arthritis, osteoporosis and cardiac complications. An in-depth study by the New Delhi-based All India Institute of Medial Sciences (AIIMS) found that elderly women are affected more by dementia, depression and psychosomatic disorders than their male counterparts. According to this study, the population structure of the elderly is dominated by poorly educated women, economically dependent on children without any tangible authority or status in the family.

Apart from the serious social crisis, there is an important fiscal angle to the problem of ageing, as large proportion of the resources meant for developmental activities will have to be diverted to take care of the needs of the elderly population. For, as a study done by Gautam Bhardwaj of the Invest India Economic Foundation (IIEF), a think-tank that works on the pensions sector, and ex-UTI chief Surendra Dave estimates, providing a pension cover for just the civilian employees of the central and state governments adds up to 55 per cent of the country's GDP. Less than a sixth of those about to retire in the next decade are covered by some form of pension, and only 2 per cent of those not working in government (where pensions are generous) will be able to fund their retired lives if they cut expenses by half, according to an all-India survey done by the IIEF.

Very little attention has been focused on the pitiable plight of the elderly population in rural areas of the country. Field studies pertaining to the problems of the aged in rural India reveal that deteriorating health and economic insecurity are the most pressing problems facing the elderly population in the villages in the absence of financial support from family and old-age pension schemes of the State governments. Inspite of their poor physical and mental health, the aged males are forced to work to eke out a living.

While the problems of the aged often cut across national boundaries and have almost an equal impact, there are bound to be some differences both in perceptions and actual ground realities from nation to nation. Unfortunately, the concept of a welfare state where many of the needs of the ageing population are taken care of by the state is being criticized by agencies, such as the World Bank, which are keen that governments provide only minimum levels of social security to the elderly population groups.

Ageing is an ongoing process. The population of older persons is increasing every year and the changing social order is not always conducive to their well being. Striking a balance between aspirations of the young and the rights of the aged members of society is a daunting task for any nation, particularly for economies in transition such as India. In this context, it must not be forgotten that the elderly people in their productive spans of life have made significant contributions. Awareness programmes relating to traditions of the country, importance of values, morals, ethics etc.should be organised frequently to educate the younger generation to respect and care for their seniors. Moreover, steps may be taken to promote schemes such as the ‘adoption of senior citizens’ by persons or families having means as a welfare measure. Such a scheme would not only provide financial security to senior citizens, but also create a sense of belonging. Sometime back, the UN Secretary General Kofi Annan, while referring to the ageing population had observed: "Trees grow stronger over the years, river wider and like with the age, human beings gain immeasurable depth and breadth of experience and wisdom. That is why older persons should not only be respected and revered but they should be utilized as the rich resource to society that they are".

Interrelationship between Primary, Secondary and Tertiary Sectors

People are engaged in various economic activities within the economy. There are several ways to group them: primary/secondary/tertiary; organized/unorganized; and public/private. These groups are called sectors.

Primary Sector: There are many activities that are undertaken by directly using natural resources. For example, the cultivation of cotton. Cotton production depends mainly (though not entirely) on natural factors like rainfall, sunshine and climate. So cotton is a natural product. Similarly, in case of activity like dairy, we are dependent on the biological process of the animals and availability of fodder etc. The product milk is a natural product. Minerals and ores are also natural products. When we produce a good by exploiting natural resources, it is an activity of the primary sector. This is because it forms the base for all other products that we subsequently make. Since most of the natural products we get are from agriculture, dairy, fishing, forestry, this sector is also called agriculture and related sector.

Secondary Sector: This sector covers activities in which natural products are changed into other forms through ways of manufacturing that we associate with industrial activity. It is the next step after primary. The product is not produced by nature but has to be made and therefore some process of manufacturing is essential. This could be in a factory, a workshop or at home. For example, using cotton fibre from the plant, we spin yarn and weave cloth. Using sugarcane as a raw material, we make sugar or gur. We convert earth into bricks to make houses and buildings. Since this sector gradually became associated with the different kinds of industries that came up, it is also called as industrial sector.

Tertiary Sector: After primary and secondary, there is a third category of activities that falls under tertiary sector. These activities help in the development of the primary and secondary sectors. But these activities, by themselves, do not produce a good but they are an aid for the production process. For example the goods that are produced in the primary or secondary sector would need to be transported by trucks or trains and then sold in wholesale and retail shops. At times, it may be necessary to store these in godowns. We may also need to talk to people or send letters/mails (communicate) or borrow money from banks to help production and trade. Transport, storage, communication, banking, trade are some examples of tertiary activities. Since these activities generate services rather than goods, the tertiary sector is also called the service sector.

Service sector also includes some essential services that may not directly help in production of goods. For example, we require teachers, doctors and those who provide personal services such as washermen, barbers, cobblers, lawyers and people in administrative and accounting works. In recent times, certain new services based on information technology such as internet café, ATM booths, call centres, software companies etc have become important.

Thus it is clear that the various economic activities, though grouped into three different categories, are highly interdependent. Further examples of economic activities can be cited which shows how the three factors are dependent on each other.

(a) Farmers sell sugarcane to a particular sugar mill. If these farmers refuse to sell sugarcane, the mill will have to close down. This is an example of the secondary (industrial) sector being dependent on the primary sector. The manufacturing sector depends on the primary sector for raw materials.

(b) In turn, the primary sector depends on the secondary sector. One aspect of dependence is the fact that the output of the former is used as inputs in the latter. If fabric manufacturers decided not to buy from the Indian market and import all cotton from abroad, the plight of the Indian cotton cultivators is unimaginable. Indian cotton cultivation will become less profitable and the farmers may even go bankrupt, if they cannot quickly switch to other crops. Cotton prices will fall. The other aspect is that output of the manufacturing sector is used as inputs in agricultural production. For example, farmers buy many goods such as tractors, pumpsets, electricity, pesticides and fertilizers. If the prices of fertilizers or pumpsets go up, cost of cultivation of the farmers would rise and their profits would be reduced.

(c) People working in industrial and service sector get the food that they need from the primary sector. If the farmers decide not to sell their products food will become scarce and workers of the industrial and tertiary sectors will suffer. On the same footing, if there is a strike by transporters and lorries (service sector) refuse to carry vegetables, milk and other food items from the place of their production to the markets, the farmers will be unable to sell their products.

(d) The industrial sector thrives on the services from the tertiary sector and the existence of the service sector would be meaningless if it had no services to render to the other two sectors.

HEALTH CHALLENGES FACED BY THE DEVELOPING COUNTRIES INCLUDING HIV/AIDS

A Report of a study named Disease Control Priorities in Developing Countries (released at the Beijing Second International Medicine Organization Conference on April 3, 2006), identified four key challenges faced by the public health sector in the developing world: the transformation of epidemiology, the HIV/AIDS epidemic, the emergence of new diseases, and high sanitation imbalances among countries. The study, which contains contributions from 500 of the world’s top epidemiologists, sanitation experts, and public health practitioners is a joint effort of the World Health Organization (WHO), the World Bank, and the U.S. National Institutes of Health (NIH).

As a first challenge, the study notes that rapid changes in global health over the past century have contributed to a transformation in disease. Mortality rates worldwide have experienced a remarkable decline in recent decades, a trend that is projected to continue over the next 20 years. “Lifestyle” diseases linked to tobacco and alcohol use and injuries now account for a rising share of deaths, and non-communicable diseases, such as circulatory-system ailments, cancers, and psychiatric disorders, are expected to replace infectious diseases and child malnutrition as the greatest contributors to the global disease burden. Researchers attribute this epidemiological shift primarily to the rapid aging of populations, with senior citizens experiencing the highest rates of non-contagious diseases of any age group.

A second key health challenge cited in the study is the spread of HIV/AIDS. Although the epidemic has been reined in to some extent in middle- and high-income countries, AIDS is expected to remain widespread in developing countries, particularly among high-risk populations. The Worldwatch Institute has reported that in as many as 20 developing countries—nearly all in sub-Saharan Africa—more than 15 percent of the total military force is thought to be HIV-positive. And nearly 74 million workers worldwide could die from AIDS-related causes by 2015.

Emerging and evolving diseases, such as the rapidly spreading avian influenza virus H5N1, will also continue to be a threat, contributing to new global outbreaks, said the study. The severe acute respiratory syndrome (SARS) virus that emerged in China in late 2002 and affected 27 countries illustrated that inadequate surveillance and response capacity in a single country can have repercussions for public health throughout the entire world. Experts believe that whether SARS becomes endemic or not will depend on the post-outbreak surveillance and setup of international mechanisms for outbreak alert and response.

The fourth challenge identified by the study is the need to close the sanitation gap between countries. While global public health inequalities have improved, many developing countries still face severe sanitation challenges that have impeded local economic development and poverty reduction efforts. The study notes that while mortality rates for children under age 5 are declining in most countries, they actually increased in 23 countries between 1990 and 2001 due to breakdowns in the public health infrastructure and the emergence of HIV/AIDS.

The World Bank published the first edition of “Disease Control Priorities in Developing Countries” in 1993, with contributions from the WHO, scholars, and public health practitioners and specialists. In September 2002, the WHO, World Bank, and NIH jointly launched the Disease Control Priorities Project (DCPP) to assess disease control priorities worldwide and to produce science-based analyses and resource materials to inform health policymaking in developing countries. The newly published study is an expanded second edition of the 1993 publication.

(With acknowledgement to Worldwatch Institute.htm - Study Highlights Four Key Health Challenges in Developing Countries; China Struggling With All by Zijun Li on April 11, 2006.)

HEALTH POLICY FOR THE DEVELOPING COUNTRIES

Investment in health constitutes an important component of investment in human capital. The state of health which is considered a stock, depreciates over time and at an increasing rate in later life. Investments in health would broadly include child care, nutrition, clothing, housing, medical services, and the use of one’s own time. “Healthy time” or “sickness-free time” contributes towards work, consumption and leisure activities.

The most important advance in population quality has been the increase in life span of people in low income countries. This reveals improvements in health. Since about 1950, life expectancy at birth has increased 10 percent or more in many LDCs. People of Western Europe and North America never attained so large an increase in life expectancy in so short a period. In India life expectancy at birth of males rose by 43 percent and that of females by 41 percent from 1951 to 1971.

Longer life spans provide additional incentives to acquire more education as investments in future earnings. The additional health capital and other forms of human capital tend to increase the productivity of the workers. Longer life spans result in more years of participation in the labour force and reduces “sick” time. Better health of workers in turn leads to more productivity per man hour at work.

Poverty is the major cause of disease in developing countries and more needs to be done than simple provision of medical facilities to improve health conditions. Reduction in poverty is to be seen as an overall objective of all general development and health policies in these countries. Health policies must be related much more to the environment and to the ecological, cultural and nutritional situation. Health programmes have been biased toward a small section of the urban population, which needs to be changed. Also, treatments should be widespread and ‘preventive’ rather than being ‘curative’.

Malnourishment is a major development problem. The interaction of malnourishment and infection has a far more serious effect on individuals than the combined effect of the two working independently. Consequently, the effects of nutrition actions and health programmes undertaken simultaneously are greater than the sum of their effects on the same populations would be if the actions were undertaken separately. Since integration of nutrition with health services is a particularly efficient way of using limited resources, improved nutrition should be considered an explicit objective in all relevant health work.

Substantial efforts are called forth on the part of governments and other development institutions towards addressing the health challenges being faced by the developing countries. Assistance agencies should emphasize food production, but with increased attention to those foods consumed by low-income groups and further support to projects that help to strengthen the purchasing power of the poor. They can also help government bodies fill gaps to their knowledge. Increased emphasis on nutrition is a logical extension of the effort to increase food production and consumption by those who need it. The food-health policy approach can complement and broaden other work of development-assistance agencies.

SPECIAL DRAWING RIGHTS (SDR)

The SDR is an international reserve asset, created by the IMF in 1969 to supplement the existing official reserves of member countries. SDRs are allocated to member countries in proportion to their IMF quotas. The SDR also serves as the unit of account of the IMF and some other international organizations. Its value is based on a basket of key international currencies.

The Special Drawing Right (SDR) was created by the IMF in 1969 to support the Bretton Woods fixed exchange rate system. A country participating in this system needed official reserves—government or central bank holdings of gold and widely accepted foreign currencies—that could be used to purchase the domestic currency in world foreign exchange markets, as required to maintain its exchange rate. But the international supply of two key reserve assets— gold and the U.S. dollar—proved inadequate for supporting the expansion of world trade and financial development that was taking place. Therefore, the international community decided to create a new international reserve asset under the auspices of the IMF.

Under the amended rules, the activities of the Fund were conducted under two separate accounts. The general transactions of the Fund including the sales of foreign currencies, to member countries, were conducted through the General Account. In other words, the Genral Account dealt with the general drawing rights of the member countries. But with the new scheme, a new account had been opened known as Special Drawing Account. All operations and transactions involving special drawing rights were conducted through the special drawing account. In other words, this account dealt with the special drawing rights of the member countries.

However, only a few years later, the Bretton Woods system collapsed and the major currencies shifted to a floating exchange rate regime. In addition, the growth in international capital markets facilitated borrowing by creditworthy governments. Both of these developments lessened the need for SDRs.

Today, the SDR has only limited use as a reserve asset, and its main function is to serve as the unit of account of the IMF and some other international organizations. The SDR is neither a currency, nor a claim on the IMF. Rather, it is a potential claim on the freely usable currencies of IMF members. Holders of SDRs can obtain these currencies in exchange for their SDRs in two ways: first, through the arrangement of voluntary exchanges between members; and second, by the IMF designating members with strong external positions to purchase SDRs from members with weak external positions.

SDR valuation

The value of the SDR was initially defined as equivalent to 0.888671 grams of fine gold—which, at the time, was also equivalent to one U.S. dollar. After the collapse of the Bretton Woods system in 1973, however, the SDR was redefined as a basket of currencies, today consisting of the euro, Japanese yen, pound sterling, and U.S. dollar. The U.S. dollar-value of the SDR is posted daily on the IMF's website. It is calculated as the sum of specific amounts of the four currencies valued in U.S. dollars, on the basis of exchange rates quoted at noon each day in the London market.

The basket composition is reviewed every five years to ensure that it reflects the relative importance of currencies in the world's trading and financial systems. In the most recent review that took place in November 2005, the weights of the currencies in the SDR basket were revised based on the value of the exports of goods and services and the amount of reserves denominated in the respective currencies which were held by other members of the IMF. These changes became effective on January 1, 2006. The next review by the Executive Board will take place in late 2010.

The SDR interest rate

The SDR interest rate provides the basis for calculating the interest charged to members on regular (non-concessional) IMF loans, the interest paid and charged to members on their SDR holdings, and the interest paid to members on a portion of their quota subscriptions. The SDR interest rate is determined weekly and is based on a weighted average of representative interest rates on short-term debt in the money markets of the SDR basket currencies.

SDR allocations

Under its Articles of Agreement, the IMF may allocate SDRs to members in proportion to their IMF quotas. Such an allocation provides each member with a costless asset on which interest is neither earned nor paid. However, if a member's SDR holdings rise above its allocation, it earns interest on the excess; conversely, if it holds fewer SDRs than allocated, it pays interest on the shortfall. The Articles of Agreement also allow for cancellations of SDRs, but this provision has never been used. The IMF cannot allocate SDRs to itself.

There are two kinds of allocations:

General allocations of SDRs have to be based on a long-term global need to supplement existing reserve assets. General allocations are considered every five years, although decisions to allocate SDRs have been made only twice. The first allocation was for a total amount of SDR 9.3 billion, distributed in 1970-72. The second allocation was distributed in 1979-81 and brought the cumulative total of SDR allocations to SDR 21.4 billion.

A proposal for a special one-time allocation of SDRs was approved by the IMF's Board of Governors in September 1997 through the proposed Fourth Amendment of the Articles of Agreement. This allocation would double cumulative SDR allocations to SDR 42.8 billion. Its intent is to enable all members of the IMF to participate in the SDR system on an equitable basis and correct for the fact that countries that joined the Fund subsequent to 1981—more than one fifth of the current IMF membership—have never received an SDR allocation. The Fourth Amendment will become effective when three fifths of the IMF membership (111 members) with 85 percent of the total voting power accept it. As of end-March, 2008, 131 members with 77.68 percent of total voting power had accepted the proposed amendment. Approval by the United States, with 16.75 percent of total votes, would put the amendment into effect.

(From internet.)

Merits and demerits of SDRs must be studied as well.