Sahadat Final

Neoliberalism in Health Care System In Perspective of Urban Governance in Bangladesh

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Abstract

Many nations have undergone changes in health care financing and services. Within the context of

globalization, public health improvement is occurring around the world. This assignment explores the

neoliberal mindset shaping public health care in Bangladesh. Neo-liberalism comprised of three

principles: individualism, free market via privatization and deregulation and decentralization. The

basic premise of this paper is to describe the enlargement of public health under neoliberalism

mindset. This assignment also depicts urban health care scenario and its aftermath on urban poor

people. It includes commercialization of health care in Bangladesh.

1. Introduction:

Since 1970-1980, the issue of neoliberalism has become a particular part of state’s policy,

laws, ways, public health and so forth. From then, neoliberalism has been occurring through

privatization, financialization, individualism, decreasing social opportunities, prioritizing

bourgeoisies’ interest injecting globalization process. Neo-liberalism in public health has

been a rigorous concept in Bangladesh. It encompasses commercialization of health sector,

decreasing Left hand facilities of state, cutting up urban poor incentives, increasing so-called

NGOs and INGOs in urban poor center, increasing deprivation of basic health care in public

hospitals, health care plights of socially excluded class, high-priced health care in Dhaka city

and so on. Emerging public health as neoliberalised way has been a tremendous challenge for

the urban working class and poorer section to live on earth with healthy dignity. It is to be

considered integrated outcome of globalization over the world.

2. Aims and Objectives of the Study:

i. To analyze the neo-liberalization process of Public Health,

ii. To find out neo-liberal effects Public Health,

iii. To know the flow of privatization in Public Health,

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iv. To know the neo-liberal dimensions of health care policy under urban

governance,

v. To know the nature of public health in neo-liberal era.

3. Literature Review on Neoliberal Urban Governance and

Health Care Systems:

In the book of “Punishing the Poor” by Loic Wacquqnt (2009), Wacquant explained

Bourdieu’s view. Bourdieu calls the “Left hand” the “Right hand” of the state. Bourdieu said,

“The Left hand, the feminine side of Leviathan, is materialized by the spendthrift ministers in

charge of social functions-public education, health, housing, welfare, and labor law-which

offer protection and succor to the social categories shorn of economic and cultural capital.

The Right hand, the masculine side, is charged with enforcing the new economic discipline

via budget cuts, fiscal incentives, and economic deregulation.”

Here, Wacquant tried to show the neoliberal systems in urban public health alongside other

social things. He explained that Left hand is the costing part of a country. As we depict

neoliberalization of urban public health, urban health is prime matter to discuss here. In this

book, it depicted that urban health care would be in privatization. Consequently, it would be

on the further side of urban poor. In terms of Dhaka city, it is the same like other urban city

around the world. Since State has to bear cost of health, Sate has cut it down and handed

over the private sector. At present, in Dhaka city, there are enormous private hospitals

available. In these private hospitals, there are no accesses of poor people, but only ruling

class people, bourgeoisie have access. It is because they have abundant resource flow. So,

health care opportunities for urban poor have been decreasing day by day, on the other hand,

neoliberalism has been injecting in public health process.

In the article of “MIGRATION, URBANIZATION AND POVERTY IN DHAKA,

BANGLADESH” by Professor Shahadat Hossain, published in Journal of the Asiatic

Society of Bangladesh (Hum.), Vol. 58(2), 2013, pp. 369-382, under the new wave of

privatization a significant number of private schools, universities and hospitals have been

established where the rich and affluent only have the access. The fact is, Dhaka has emerged

as the city of the new shopping malls, restaurants, cafes, beauty parlors and gymnasiums.

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This privatization of urban space discriminate the urban poor who are forced to move to the

urban peripheries. Beautification projects in the city have also marginalized poor

communities from the city. This article depicted the neo- liberalism of public health in Dhaka

city and health care plights of urban poor peoples.

Arjun Appadurai (2002) in his article “Deep Democracy: urban Governmentality and the

Horizon of politics”, Public Culture, 14(1): pp. 21-47, explained how neoliberalization

injected in public health in India. Appadurai showed that due to neoliberalization of urban

health care, the Society for the Protection of Area Resource Centers, or SPARC (a NGO),

Community Based Organization or CBO, and Mahila Milan launched initiatives in 1987 to

render health care facilities and other basic needs. Public health detached from urban poor.

By turn, the urban poor people ousted from public health with the soft touch of

neoliberalization and privatization in health sector.

In the article of “Urban process under capitalism: a framework for analysis”, David

Harvey explained three laws of accumulation- a. primary circuit of capital, b. secondary

circuit of capital, c. tertiary circuit of capital. Bangladesh has been experiencing secondary

circuit of capital where privatization is very much prevalent. With the proces s of

neoliberalization, market economy has become dominant in every spheres of Dhaka city

including public health, market etc. These ideals have been emphasizing commercialization

over the country.

In article “Public Health, Urban Governance and the Poor in Bangladesh: Policy and

Practice” by Ferdous Arfina Osman, Asia-Pacific Development Journal Vol. 16, No. 1,

June 2009, writer sought to identify the weakness of urban governance that cause the urban

poor to have inadequate access to primary and public health in the context of

neoliberalization process. It also showed linkage of urban governance, public health and

neoliberalism.

Professor Anu Muhammad (2015) wrote an article on “Bangladesh—a Model of

Neoliberalism: The Case of Microfinance and NGOs”. He analyzed globalization,

privatization, financialization and the trajectory of neoliberal reforms in Bangladesh. To open

the space for different forms of privatization and financialization, an ideological campaign

has demonized the state’s responsibility towards its citizens. NGOs’ proliferation occurred

but pledges that those NGOs committed, did not come true.

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Sue L.T. McGregor. (2001), placed “Neoliberalism and health care” and depicted

neoliberal scenario in terms of public health. She illustrated neolibera lism nature of health

care system.

4. Neoliberalism in Urban Governance: Theoretical Discussion

Neoliberalism is an approach to economic and social studies which control of economic

factors is shifted from the public sector to the privet sector. Drawing upon principles of

neoclassical economics, neoliberalism suggest that government reduce deficit spending, limit

subsidies, reform tax law to broaden the tax base, remove the fixed exchange rate, open up

markets to trade by limiting protectionism, privatize state-run businesses, allow private

property and back deregulation.

Urban Governance refers to ‘a system of governing with is concerned with the nature of the

relationship between the rulers and the ruled, the state and the society, and the government

and the governed.

4.1 Harvey’s Theory of Neoliberalism:

In “A Brief History of Neoliberalism“(2005), David Harvey explains the nature and

principles of neoliberal state where the individual right to freedom of action, expression, and

choice must be protected. He argues the state must use its monopoly of means of violence to

protect these freedoms at all costs. One of the greatest of all institutional barriers to economic

development and the improvement of human welfare is depicted as the absence of t ransparent

private property rights. He observes, Privatization and deregulation combined with

competition eliminate bureaucratic red tape, increase efficiency and productivity, improve

quality and reduce costs both directly to the consumer through cheaper commodities and

services and indirectly through reduction of the tax burden. To Harvey, neoliberals tend to

prefer governance by experts and elites.

David Harvey, in his article “The Urban process under Capitalism: a framework for

analysis” which published in 2002, stated that “The ‘urban’ has a specific meaning under the

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capitalist mode of production which cannot be carried over without a radical transformation

of meaning (and of reality) into other social context.” Within the framework of capitalism he

observes, the “urban process” on the twin themes of Accumulation and Class Struggle.

“The Right to the City”, published in 2008 by David Harvey, contends with Marxist

perspective the right of mass urban peoples to the urban area- the city. Harvey argues that in

the era of neoliberal political economy rich or owner class facilitate as much that visibly

shows the spatial difference and fragmentations within the same system where billionaires

have emerged and richest man is boasted by country here also the incomes of the poor urban

has diminished or stagnated. Accumulation by dispossession lies in the core urbanization

under capitalism while the poor, underprivileged and marginalized people suffer socially,

economically and politically where creative destruction has dispossessed them of any right to

the city.

4.2 Appadurai’s Theory of Deep Democracy:

In “Deep Democracy: Urban Governmentality and Horizon of Politics” (2002), Arjun

Appadurai claims that “The world seems marked by the global victory of some version of

neoliberalism…” He concisely argues the politics and behavior of state governance and

various activist movements and associations related private organizations. He explains that

how the new models of global governance and local democracy various groups are found to

emancipate and equity maintenance that recognize nongovernmental actors need to be made

part of this model of global governance and local democracy.

Appadurai critically describes the contradictions between the ideal types and combine high

concentration of wealth and even higher concentration of poverty and disenfranchisement in

urban process of the developing countries. He sees this current cris is as a crisis of redundancy

rather than as one of legitimation. Thus in many places of the world undoubted growth in a

‘privatization’ of the state in various forms, sometimes produced by the appropriation of the

means of violence by non-state groups. He also presides about the new geography of

governmentality and its population which he named – “Citizens without a city”.

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4.3 Wacquant’s Theory of Neoliberal Governance:

Loïc Wacquant in his writing “Punishing the Poor: the Neoliberal Governance of Social

Insecurity” (2009), describes the core thing of neoliberal system in terms of penalization of

state regulation over the poor and designed lower class people.

Wacquant argues the bureaucratic is transferring its nature into two meaningful struggles.

Firstly, he intend to show, the higher state nobility of policy- makers imply on promoting

market oriented reforms and the lower state nobility of executants attached to the traditional

missions of government. Secondly, he explains as left hand and right hand. The left hand is

the feminine side which is materialized by public education, health, housing, welfare and

labor law. The right hand, the masculine side, is possessed with enforcing the new economic

discipline via budget cuts, fiscal incentives, and economic deregulation.

Wacquant very precisely presents the transition process into neoliberalism and claims that

“The new priority given to duties over rights, sanction over support, the stern rhetoric of the

obligations of citizenships, and the material reaffirmations of the capacity of the state to look

the trouble making poor (welfare recipient and criminals) in a subordinate relation of

dependence and obedience towards state managers portrayed as virile protectors of the

society against its wayward members: all these policy planks pronounce and promote the

transition from the kindly ‘nanny state’ of the Fordist- Keynesian era to the strict ‘daddy

state’ of neoliberalism” (Wacquant, 2009: 290).

Argues with the explanation of David Harvey’s feature of neoliberalism, he elaborates that

“For Harvey, neoliberalism aims at maximizing the reach of market transactions via

‘deregulation, privatization, and withdrawal of the state from many areas of social provision.’

As in previous eras of capitalism, the task of Leviathan is to facilitate conditions for

profitable capital accumulation on the part of both domestic and foreign capital” (Wacquant,

2009: 309).

“Neoliberalism is a transnational political project aiming to remark the nexus of market,

state, and citizenship”; according to Wacquant this entails the articulation of four institutional

logics. They are: Economic Deregulation, Welfare State Devolution, Cultural Trope of

Individual Responsibility and lastly An Expensive, Intrusive and Proactive Penal Apparatus.

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5. Beginning and Development of Neoliberal Policy in Bangladesh

Neoliberalization through privatization of State Owned Enterprises (SOEs) began during mid

seventies in Bangladesh. The policy has been pursued by the successive governments. It is an

ongoing policy of the government.

Political- economic factors contributed to the initiation and promotion of the privatization

policy of State Owned enterprises (SOEs) in Bangladesh. It is argued that the privatization

policy has been the outcome of both ‘crisis ridden’ and ‘politics as usual’ policy conditions

similar to the theoretical concepts developed by Grindle and Thomas (1990).

The non-effectiveness of the nationalization policy of industries, poor performance of SOEs

in addition, heavy financial burden on the state, influence of structural adjustment

programmes and pressures of international donors have been the major factors those have

made the policy character as ‘crisis ridden’.

Moreover, the policy and its promotion have been the outcome of the usual political course of

the successive governments. Successive governments have been pursuing the policy as one of

their political strategy, which has shaped the policy character as ‘politics as usual’. As far as

the major actors of the policy are concerned, the heads of the governments, cabinet members

and the bureaucracy have been the dominant policy actors behind initiation and promotion of

the policy. The private sector in general and the media in particular have indirectly

contributed to the initiation of the policy and its subsequent implementation. The

involvement and reaction of public however, have not been clearly visible in the entire

process.

Grindle and Thomas (1990) while developing a broader framework for analyzing policy

reform in developing countries have pointed out two distinct contexts for policy changes:

1. Crisis-ridden Policy Changes and

2. Politics-As-Usual Policy Changes

According to them, a problem gets on the policy agenda and is felt necessary for policy

action whenever there exists any crisis. Certain kinds of policy issues, for example,

devaluation tend to get on policymakers’ agenda only when economic crisis exist. Other

kinds of policies, for example, decentralization emerge almost uniquely under politics-as-

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usual circumstances. Crisis-ridden policy reforms tend to bring major modifications from pre-

existing policies. Crisis ridden situation prompt policy makers to make innovative or radical

changes rather than incremental to meet the crisis (Grindle and Thomas, 1990: 73-79).

Moreover, circumstances of politics as usual result in the processes of agenda setting and

decision-making that are distinct from those that prevail under circumstances of perceived

crisis (Grindle and Thomas, 1990: 84). Under no crisis conditions, change is o ften

incremental, with considerable scope for trial and error or scaling up if initial efforts provide

positive results (Grindle and Thomas, 1990: 84-90). The above viewpoints and arguments

have relevance to the policy context of privatization policy of SOEs in Bangladesh, which

would be evident from the following discussion and analysis.

5.1 Political-Economic Factors that contributed to the policy formation and its

subsequent promotion:

The major political-economic factors that contributed to the initiation and promotion of the

privatization policy of SOEs has been discussed and analyzed below:

1. Non-Effectiveness of the Nationalization Policy:

After the independence of Bangladesh in 1971, the then ruling party Awami League adhered

to a socialistic ideology of governing the state, which prompted the government towards

nationalization of private enterprises (Umar, 1974: 135-140; Sobhan, 2005; Uddin 2005). The

government nationalized the industrial units left by Pakistani and other foreign owners as

well as firms owned by indigenous Bengalis in jute, textile and other manufacturing

industries. The government also nationalized the entire financial system, import trade, raw

jute export trade, and most of inland water transport. Because of that, approximately 90% of

industrial fixed assets were transferred to state ownership (Akram, 2003: 3-4).However; the

nationalization policy could not make positive contribution to the economy in general and to

the SOEs in particular due to several reasons. Although the new government followed the

strategy and philosophy of nationalization, subsequent experience with gross

mismanagement, inefficiencies and persistent losses of SOEs, drove home the point that the

country could ill afford the social costs of non- profitable SOEs (Akram, 2000: 439 –440;

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Khan & Hossain, 1989: 79: 92; Sattar, 1989: 1163). It proved more difficult than expected to

dispose of a large number of enterprises under the administration of government, saddled

with large debts, no inventory, and little managerial back-up. After the liberation of

Bangladesh, these units had been put under the patronage of the then political government,

many under officially designated administrators. Some of these administrators were

government officials, some were private citizens close to the government of that time; some

were put under the management of junior managers already employed by the erstwhile

owners of enterprises; some were even put in control of the workers of these enterprises

(Sobhan, 2005: 8-9). It is argued that nationalization was executed in great haste without

preparing proper inventories of assets. This left room for wide spread pilferage (Rashid,

1988: 41). Critics argue that “they were used for patronage for party workers which resulted

in excess employment, waste and inefficiency” (Rashid, 1988: 41).

Moreover, the lack of autonomy for the nationalized sectors, managerial deficiencies arising

from the vacuum created by the departure of the Pakistani entrepreneurs (at the time of

liberation war), and the politicization of the management structure of the nationalized units

without much energy given to their proper management on a commercial footing, contributed

to the policy’s non- effectiveness (Bayes et al. 1998: 92).

The performance of the nationalized sector in terms of services, production, sales and profits

were disappointing due to many factors. Exogenous factors included the disruption and

destruction caused by the liberation war, the problems of re-establishing the economy in the

aftermath of the war, inadequate investment in plant, increases in import costs, taxes and

tariffs, depreciation of the Taka, adverse movements in terms of trade and un certain foreign

aid flows, particularly during the recession of the 1970s and the early 1980s (Rashid, 1988:

63).

Endogenous factors included the lack of clear objectives, non-availability of raw materials,

labor problems, power failures, inexperience, poor management, and lack of managerial

autonomy and a result based system of accountability (making officials/managers responsible

for non achievement of tangible benefits/profits). Consequently, control was sought to be

exercised through day-to-day interference in operational matters by the public agencies

curtailing the autonomy to achieve objectives for which the SOEs were created (Farid, 1992:

207; Rashid, 1988: 63).

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A sense of crisis and urgency thus prevailed among the policymakers at the end of 1974. The

task was to make the SOEs viable enterprises as well as to provide greater scope for private

sector involvement. In fact, crisis conditions prompted the government to make a ‘u’ turn and

brought the denationalization issue on to the agenda.

2. Policies after the fall of the government in 1975:

In December1975, the new government announced that “it was ready to extend all possible

support to the private sector to utilize its full potential for economic development of the

country” (DCCI, 2000: 7). Ultimately this resulted in introduction of different policy

measures (discussed in part B). When a perception of crisis surrounds the consideration of

policy changes, considerable pressure develops to ‘do something’ about a problem if dire

consequences are to be avoided. It can be said that the situation of Bangladesh in 1975

involved conditions where a “perceived crisis sets in motion a policy making characterized

by pressure to act, high stakes, high level decision makers, major changes from existing

policy and urgency” (Grindle and Thomas, 1990: 76).

The Government of General Ziaur Rahman and his cabinet along with the higher level policy

makers, perceived a further deterioration of macro politico-economic condition. The

government of Ziaur Rahman perceived that since the losses of SOEs were piling up to the

detriments of the economy, denationalization would help capital formation on the one hand

and would restore the confidence of the business entrepreneurs on the other hand (Humphrey

1992).

At the same time the government could gain support of the business class through

abandoning nationalization which would strengthen the political base and would enhance

stability of the military government. Theoretically, “a situation of perceived crisis raises the

concerns for policymakers about macro political conditions such as politic al stability,

legitimacy and regime vulnerability and leads them to carefully assess the political and

economic consequences of the options available to them” (Grindle and Thomas,1990: 77).

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3. Loss making SOEs and subsequent financial burden on the state:

SOEs incurred chronic losses and continued to rely on state subsidy. Besides losses and low

rate of return, most SOEs in Bangladesh obtained equity injections from the state and

substantial amount of loans from nationalized commercial banks (NCBs). Up to March 2007,

total loan of nationalized commercial banks to 44 corporations (under which SOEs are

placed) was Taka199993.2 million of them, the amount of default loan was Taka9513.1

million which was however 4.76% of total distributed loan.

The poor economic performances of SOEs and the heavy financial burden on the state were

major concerns for the policymakers of the successive governments in Bangladesh. This has

contributed to the pursuance of the policy of privatization regarding SOEs after 1974.

During 2000, SOEs had total assets of Taka439 billion (US $ 9.8 billion) with a total short-

term debt of Taka386 billion (US $ 8.6 billion). This has led to the conclusion being drawn

that SOEs are grossly inefficient, producing a negative return on investment a nd delivering

annual losses of Taka 16 billion (US $0.35 billion) (Kashem et al. 2000: 51).

Most SOEs in Bangladesh are running with huge losses and have failed with few exceptions

to generate substantial profit. It is reported that almost all SOEs have turned into losing

concerns.

The SOEs have been drawing substantial resources from within as well as outside

government finances. Nearly one third of country’s Annual Development Programme (ADP)

resources go to SOEs to finance their investment-savings gap. Nevertheless, due to different

socio-political imperatives and stakes, successive governments have had to provide subsidies

to loss making SOEs in order to keep them functional.

Hence, it can be argued that the existence of poor perform in gloss making SOEs have been a

continuous burden on the government exchequer as the government has been consistently

providing grants and subsidies to the SOEs. The heavy financial burden on the government

due to continuous subsidies has created a sense of crises among policy makers. Successive

governments have been under pressure to find alternative policy options to protect the

economic image of the country and rescue the credibility of the government. This has

ultimately kept the privatization issue on the policy agenda.

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4. Influence of Structural adjustment program and International Donors

In developing countries, market-oriented policies such as deregulation, privatization, and

liberalization, were adopted or imposed under stabilization and structural adjustment

programmes sponsored by international donor agencies like the World Bank, International

Monetary Fund (IMF) (Cook &Kirkpatrick 1988; Suleiman and Waterbury 1990; Simrit

2004; Sobhan 2005; and Uddin 2005).

Structural Adjustment Programmes which emphasized, among others, shrinking size of the

state, an open market economy, deregulation, and promoting the private sector, were all

conducive to a policy of privatization. The new loans offered since the early 1980s by

international institutions to developing countries have been associated with loan

conditionality, particularly the stabilization and structural adjustment programmes with

privatization and deregulation as the central policy components. Most developing countries

requiring foreign assistance from the World Bank and IMF were very much pressured to

introduce these programmes and policies (Haque, 2000: 223-224; Huque, 2003:1).

This has been the case for Bangladesh also. One of the major areas where pressure from the

donors comes to exercise relates to the formulation and conduct of economic policies. The

donors’ attitude stems from the understanding that the size and importance of their

contribution to Bangladesh’s development effort gives them a right to dictate how it should

conduct development affairs (Sobhan, 1982: 146).

The privatization effort in Bangladesh gained momentum at the beginning of 1980s largely

due to the wave of structural adjustment programmes that has swept all over the developing

world (Sobhan2005; Haque 2000; Huque 2003; Uddin and Hooper 2003; Rahman1994;

Matin 1990).

Structural adjustment programmes which emphasized incorporation of market principles and

managerialism in the operation of public organizations in the belief that they would generate

more efficiency and benefits to the state and society. Hood(1994: 135) preferred to call the

system as New Public Management(NPM)9 and labelled the adoption of NPM with the

notion of ‘cargo cult’.

The aid dependency of developing countries to donor agencies, meant governments had to

take measures in favour of structural adjustment as prescribed and advocated by the World

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Bank and the IMF. Aylen (1987) argues that, “it is pragmatism and expediency, rather than

politics, that are the main motives of privatization in developing countries, and that outside

pressures and force of circumstance are more important than domestic pressures and

ideologies” (Aylen 1987 cited in Hulme et.al. 1998: 66).

The multilateral donor agencies are the most significant contributors to the total aid injected

to the economy of Bangladesh. The extreme dependence of Bangladesh on foreign aid has

given the donor agencies effective leverage over the economic policy making of the country

(Hassan, 2000: 401- 405).

Total aid disbursement in Bangladesh in 2004/05 rose by 32% year on year to US$ 1.3

billion.At the same time, net foreign aid during the period was also significantly higher,

rising by 45.5% to US$ 810million. Foreign aid remains an indispensable source of finance,

providing Bangladesh with around 40% of government revenue and about 50% of foreign

exchange.

5. The New Industrial Policy of 1982 and the Industrial Policy of 1986:

The international lending agencies became a major influence on government policies after the

fall of the government in 1975, in large part because of the economic dependence of

Bangladesh (Sobhan1982). “The World Bank, as early as September 1974, urged the

Bangladeshi government to restore private-sector confidence by denationalizing units of a

certain size” (Chowdhury, 1987: 91).The New Industrial Policy of 1982 and the Industrial

Policy of 1986 were formulated during the military regime of Ershad which gave importance

to the development of private sector. These two policies were based on Western ideologies of

privatization which were pursued by Margaret Thatcher and Ronald Reagan (Uddin, 2005:

159; Uddin& Hooper, 2003: 741).

In the face of political demonstration against its regime, Ershad government solicited western

support by adopting its policy recommendations on restructuring of SOEs under the concept

of ‘structural adjustment’ propounded by the World Bank and the IMF. As donor agencies

tended to make loan facilities conditional upon privatization, the government was left with no

alternative option but to comply with policy prescription of donors (Uddin 2005).

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The World Bank in 1990 imposed conditionality to privatize jute mills under the BJMC. This

was part of a wider set of conditions imposed by on the government of Bangladesh. These

involved closure of some publicly owned mills and privatization of the remainder (Sobhan,

2005: 17-18). After Ershad regime, the BNP government formulated the Industrial Policy

1991, encouraging private sector development. The government, advised and financed by the

World Bank, paved the way for wholesale privatization by promoting an enabling

environment, which included liberalizing foreign trade, relaxing exchange contro ls, and

restructuring import tariffs. As part of the preparations for privatization, in 1991 the Asian

Development Bank financed the Bangladesh Government’s public sector redundancy

programme, which was titled as ‘Improvement of Labour Productivity in the Public Sector

Enterprises’ – or widely known as the ‘Golden Handshake’.

The World Bank (1995) categorically asserted that the government and bureaucracy of

developing countries should withdraw from ‘businesses through disinvestments of all SOEs.

Same theme was reflected in another World Bank Study Report, which mentions that, “Given

the colossal losses of SOEs borne by the taxpayer, and the failure of several attempts to

improve their efficiency, the Government should withdraw from these businesses, soonest

possible. Failure to do, so will undermine growth” (World Bank, 1996: 96)

During the tenure of the Awami League government in 1996, the World Bank argued that the

Privatization Board (PB) chaired by are tired bureaucrat, was too weak to push ahead with

privatization. It was then perceived that a private sector chief executive of the PB might

privatize the SOEs more expeditiously. As a result, the Awami League led government

appointed a businessman, to become chairman of the PB and was accorded with the ra nk of a

State Minister (Sobhan, 2005: 23)14.

The intense pressure from the donors and aid conditionality had resulted on an escalation of

government efforts towards privatization in Bangladesh (Khan, 2004: 358-359)15. “The

World Bank and the IMF have particularly pressurized the government to privatize or to close

jute sector SOEs in Bangladesh”. On 1 July2002, the government, on IMF policy

prescription, closed the largest Jute Mills of the Bangladesh, Adamjee Jute Mills citing that

the mill had incurred a total loss of Taka 12000 million.“Privatization of SOEs would not

have been carried out in thousand years in Bangladesh had there been no pressure from donor

agencies. The Finance Ministry wants to appease donor agencies by privatizing SOEs in

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order to obtain donor’s financial assistance and foreign aid which is essential to undertake

development projects and even to meet up other governmental expenditures in Bangladesh”.

6. The impetus for trade liberalization:

This was associated with the structural adjustment programme and because of the impact of

the General Agreement on Tariffs and Trade (GATT) and World Trade Organization (WTO).

Though may be distantly related, privatization of enterprises has been considered as a driving

force towards liberalization of trade. It is perceived that enterprises under private initiative

would be more responsive towards liberalization of trade. The Bangladesh industrial policy

of 1991 has been formulated in that direction.

“The whole industrial policy was premised on the philosophy of a market-based competitive

economy. ---The most perceptible changes were, apparently, consistent with a free market,

neo-classical paradigm and with itsfold, with an outward looking, export- led strategy. ---The

early 1990s experienced the most pro-active phase of trade liberalization” (Bayes et al. 1998:

95-96).

Trade liberalization and open market economy is likely to give a competitive edge to the

privatized enterprises and they would be compelled to improve their performance for survival

and expansion. Privatization of enterprises is likely to give relief and leverages to the policy

makers for diverting the resources (allocated for SOEs) towards alternative measures for

establishing good governance in socio-economic affairs of the state. Imperatives for trade

liberalization have also created compelling circumstances that have propelled the

privatization issue.

7. Politics as Usual:

Privatization measures are not justified on economic grounds alone, the reasons that drive the

process are political as well (Suleiman and Waterbury, 1990: 3-4). Hence, apart from the

factors analyzed above, privatization issue regarding SOEs has also been appeared on the

government’s agenda under the context of ‘politics as usual’ conditions:

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“Reform initiatives appear to be more or less continuously on government agendas because

of a series of ideas about changing existing practice is debated, studied, discussed and

considered within bureaucratic agencies, legislatures and groups of interested publics”

(Grindle and Thomas,1990: 84).

‘Politics-as-usual’ is the normal political activities in order to address any problem which

might require long term planning and efforts. These actions generally do not originate from a

sense of perceived crisis rather from a need of improving or sustain any reform initiated by

any policy. Bangladesh has been no exception to this. The necessity for structural adjustment

in order to improve the economic condition of the loss making SOEs, the impetus for

privatization of SOEs and donor’s continuous advocacy and influences have made the issue

of privatization a general area of politics in Bangladesh. We will see from the following

discussion and analysis that there have been continuous modifications of industrial policies,

privatization policy as well as changes in government institutions at different times. As a

political desire and choice, these modifications and efforts have been made in order to

improve and speed up the privatization process.

8. Role of major Policy Actors and Development of the Policy:

As mentioned, the privatization policy was initiated during 1975and since then several policy

measures and efforts have been pursued. Different actors have been involved at different

times. But in most cases, the heads of state, cabinet ministers and the bureaucracy were the

dominant policy actors which are obvious because that has often been the case for developing

countries (Holwlett and Ramesh, 1995: 53-56).

When the New Investment Policy 1974 was revised during December 1975 and passed as

Revised Investment Policy 1975,General Ziaur Rahman (the then President of Bangladesh),

his industries minister and some influential members of the bureaucracy played the dominant

role behind the agenda setting and policy making arena (Humphrey, 1992: 46-58). The

Revised Investment Policy 1975 provided greater scope for private sector investment. An

Investment Corporation of Bangladesh (ICB) was established in 1976 and the Dhaka Stock

Exchange which was shut down during nationalization order during 1972 was reactivated.

AD is investment Board was established to facilitate the privatization process in line with the

Revised Investment Policy 1975. At that time a decision was made to return several

17

specialized textile units and jute twine mills to their former owners22. It was important

because jute and textiles belonged to the core of major industry that was taken over by the

nationalization policy.

The former Awami League government adopted ‘socialism’ as one of the state principle in

the 1972 Constitution of Bangladesh, which was a discouraging factor for private sector

growth. Later in1977 (during the tenure of General Ziaur Rahman) the constitution was

amended and the word ‘socialism’ was altered as “economic and social justice”. This change

made transition to a mixed economy much easier and paved the way for the major

privatization moves of 1982.

The New Industrial Policy (NIP) 1982 and The Revised Industrial Policy, July 1986 (RIP)

were framed during the tenure of General Ershad. The Industrial Policy of 1986 is basically a

refinement of the NIP of 1982. Generally Industrial Policy of 1986 broadend the scope of

NIP-82 with regard to private sector development. General Ershad was more familiar than

General Zia with private sector successes in Korea, Taiwan, Japan, and Hong Kong but he

used no models as such. Ershad’s approach was pragmatism. The Government of Ershad held

a series of discussions with representatives of various chambers of commerce, trade

associations, and industrial enterprises. Not only was it rare for the government to discuss and

consult with the private sector before a major policy decision was taken, it was also

18

surprising that those discussions had considerable influences in the formulation of the policy

that followed which was New Industrial Policy of 1982 (NIP).

General Ershad, Shafiul Azam (the then minister for Industry and Commerce), bureaucrats

Mr. Shamsul Haque Chishty and Mr. Shafiqur Rahman (influential Secretaries of the

Government of that time) were the dominant and crucial policy actors (Humphrey, 1992:63-

92).One common feature of the two regimes of General Ziaur Rahman and General Ershad

was that both of them were military officials of the highest echelon of the Bangladesh Army

who came to power with the help of Martial Law. In 1975, General Zia banned all political

activities (Osman, 2004: 273). After the fall of Zia regime in30 May 1981, a BNP led civilian

government under the leadership of Justice Abdus Sattar took over power, but General

Ershad seized power from the Sattar government in February 1982. Like General Zia,

General Ershad banned political parties, suspended the constitution and divided the country

into five martial law zones (Andaleeb and Irwin, 2004: 73).

As a result of that the legislature could not effectively take part in the agenda setting and

decision making concerning privatization during that time. Political instability eroded the

power of the legislature. In the absence of true democratic environment, the military regimes

in Bangladesh functioned in close association with the civil bureaucrats. Military

governments relied on the bureaucracy for regime- maintenance (Zafarullah, 2006: 357).

9. The Industrial Policy of 1991:

However, at the beginning of 1990s, a democratically elected government was formed under

the leadership of Prime Minister Khaleda Zia. To expedite the privatization effort of SOEs,

the Industrial Policy of 1991 was formulated during the rule of democratically elected

government of BNP in which only air travel, railways, production and distribution of power,

and defense industries were reserved for the public sector (Islam, 1999: 67).

Moreover, in 1991, the government created an Inter-ministerial Committee on Privatization

(ICOP) with the responsibility of developing privatization policy as well as considering,

approving and monitoring specific privatization proposals for the various administrative

ministries (Dowlah, 1996: 6). The above agency could not effectively attain its objectives

largely because of the lengthy and complicated process involved in implementing policy,

19

insufficient staff of its own with the technical knowledge of the privatization procedures and

because it was not given the man date and sufficient autonomy to engage in privatization

transactions. Its role was limited to monitoring and approval functions (World Bank,1994:

109; Dowlah, 1998: 240).

In order to facilitate and accelerate the task of privatizing SOEs and to carry out the function

under the direct control and supervision of a separate government institution, on 20 March

1993the government established the Privatization Board (PB) by dissolving all agencies

constituted before (Dowlah, 1996: 6).

However, two items in the mandate of the board were dropped, one of which was to facilitate

private investment in the reserved sectors of electricity and telephones, and the other to

facilitate the disinvestment of textiles industries (PIAG, 1994:2). Later the board was

accorded the status of an autonomous body. Different Ministries had also set up Privatization

Cells for assisting the PB for privatizing the SOEs under their control. Without having a clear

policy regarding privatization of SOEs there remained a danger that there would be confusion

and complexities in the discharge of functions. Hence, in September1996 the government

introduced the Privatization Policy 1996 and dissolved the earlier formed Disinvestment

Board. In the above cases, the head of the government, and the higher echelon of the

bureaucracy played the crucial role. Privatization issue was discussed in the parliament and

the business groups though not directly took part in policy making, provided moral and

encouraging support to the government initiatives. The Privatization Policy1996 was the

specific one compared to previous industrial policies relating to privatization of SOEs in

Bangladesh. Previously the thrust and avenues for privatization were mentioned in different

industrial policies and those were not spelled out in an integrated way. Procedures of

privatization of SOEs were not outlined in previous industrial policies. The Privatization

Policy 1996 very briefly spelled out the institutional frame work, methods of privatization,

guidelines for valuation, tender procedure for sale, the procedure for analysing the tenders,

payments procedure regarding privatization of SOEs (Privatization Board, 1996: 1-8).

It did not specify the goals, general principles to be followed, or the clear guidelines for

monitoring and steps for implementation. Moreover, the policy was framed through an

administrative order and had not been framed under any specific act passed by the

parliament, which was later the case with the Privatization Act 2000.

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10. The Industrial Policy 1999 and the Privatization Act 2000:

The Industrial Policy 1999 (which renewed government’s pledge for vigorously pursuing the

existing policy of privatization regarding SOEs), the formation of The Privatization

Commission (PC), the enactment of The Privatization Act 2000 and The Privatization

Policy2001 were the most prominent policy measures and efforts during the tenure of Sheikh

Hasina regime (1996-2001). These came into force with the joint action of the head of the

government, the legislature, and the bureaucracy. The legislature played a deciding role

behind the enactment of The Privatization Act 2000. The Privatization Bill 2000 was passed

in the Parliament. The draft of the Privatization Act 2000 and the Privatization Policy 2001

was prepared by the PC in collaboration with the Ministry of Law, Ministry of Industries, and

Ministry of Finance. Government officials of the above organizations played a key role in

framing the drafts of the policy and the act.

While framing the act and the policy the experiences learnt from the workings of the former

PB, augmented by some technical advice from World Bank Technical Assistance Projects

were considered. No feasibility study was conducted before framing of the act and the policy.

However, some workshops and seminars were held under the auspices of the PC where

feedback of different participants, scholars, lawmakers, politicians, labour leaders was

gathered. Experiences of some developed and developing countries like NewZealand,

Malaysia, Sri Lanka, and Pakistan were also considered. In order to get acquainted with the

privatization programme, and to effectively carry out the privatization programme, five teams

comprising of parliament members, workers and political leaders, journalists and government

officials were sent to Malaysia, New Zealand, Pakistan, Srilanka, Uzbekistan, and United

Kingdom. In order to inform the progress on privatization and its associated difficulties, a

meeting with the representatives of press and media was organized on 25 June 2001.

After the passage of the Privatization Act 2000 and the formation of the Privatization Policy

2001 the BNP led four party alliances government later introduced The Industrial Policy

2005.The Industrial Policy 2005 renewed the pledges of the previous industrial policies

particularly the policy of 1999 with more clarity in the areas for private sector development

(Bhuyan, 2005: 16). It is stated in the policy that state investments in the industrial sector will

be treated as residual investment in the future. SOEs would be complimenting to private

21

sector industries and would been courage to compete. The policy states that if the

privatization commission cannot privatize state-owned enterprises as expected, then the

concerned ministry will sell/transfer/lease those enterprises or take any other action in this

regard. While framing the policy, the Ministry of Industries took the lead role with the

assistance of other relevant ministries like the Ministry of Finance, Ministry of Planning.

The business community provided inputs and their view points in different policy papers

which were forwarded to the different ministries of the government regarding framing of the

privatization policy 2001. Workers and employees have generally opposed the privatization

move time to time35. Nevertheless, they significantly influenced the agenda setting and

decision making process of the government initiative and effort. Members of different

Chambers of Commerce and Industries and Labor Unions have raised their voice and concern

over the initiation and persuasion of privatization policy regarding SOEs in Bangladesh

(Humphrey, 1992: 46-92; Kochanek, 1993: 93-99). The media (generally newspapers and

other periodicals) has also influenced the agenda setting and policymak ing context by

criticizing or supporting government initiative and efforts in their different newspaper

reports. As for instance, the editorial of a newspaper emphasized on rethinking of the existing

privatization policy. It suggested the government to reduce the losses of SOEs and paying off

the outstanding loan of SOEs by employing honest, efficient, sincere and motivated staff for

SOEs, and to start monitoring mechanisms for ensuring effective running of privatized units.

Another editorial of an important daily newspaper opined that while going for privatization

reform, the government should emphasize not only on downsizing the labour employees of

SOEs but also on the improvement of the quality of management, financing, pricing,

procurement and marketing issues of SOEs which would help reduce the continuous losses of

existing SOEs. The editorial suggested for constituting a high-powered body of experts to

look into all aspects of management of SOEs and privatization.

11. International actors influence in the privatization process:

As we noted earlier, international actors (i.e. donor agencies like the World Bank and the

IMF) have always been influential in the privatization process. Though they did not directly

take part in the agenda setting and policy making but their advocacy and suggestion very

much influenced the policy makers in this regard. One notable feature here is that the role and

22

reactions of the general public, which are the ultimate beneficiary of the privatization policy,

has not been clearly visible regarding privatization of SOEs. Probably public feeling and

expectation have not been organized or the general public has so far been substantially

unaffected by the privatization effort. It is claimed that there have not so much publicity

activities on behalf of the government regarding privatization policy and its implementation

and hence the general public is not aware of the privatization issue. It is opined that public

opinion in reform measures is often neglected in Bangladesh and governme nt has a very low

regard to public opinion (Younis and Mostafa, 2000: 204).

Contrary to the countries of Western Europe and North America, there is absence of holding

opinion polls from the part of the government to gather public opinion on policy issues in

Bangladesh. One dominant reason behind lack of public participation could be that the policy

process is very much affected in developing countries by the political elites and bureaucracy

where the general public has a lesser degree of participation in the policy making process.

This is mainly because of characteristics of the political systems themselves, such as the

remoteness and inaccessibility of the policymaking process to most individuals in developing

countries. However, in western countries like the United States or the Western Europe,

pluralistic approach of policy making and implementation largely prevail and in those

countries public policies are the ultimate outcome of a free competition and interaction of all

groups and segments of the society, whether politicians, bureaucrats, pressure groups or the

general public. In pluralistic societies, power is widely distributed and the political system is

so organized that the policy process is essentially driven by public demands and opinion

(Parsons, 1995: 134).

However, regarding privatization of SOEs, the media have expressed the feeling and

expectation of the general public indifferent times and have acted on behalf of the general

public because media is generally regarded as the agent of general p ublic. Regarding the

media, the former chairman of the Privatization Commission said that, “While formulating

the drafts of the Privatization Act 2000and the Privatization Policy 2001, we considered the

criticism and suggestions that came out from journalists and reporters of important news

papers”.

Another chairman of the PC said that, “We always give importance to the constructive

criticisms and suggestions of news papers on the role of the PC and other broader areas of

privatization as the media generally reflects the view points of the public”.

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Moreover, the other societal group that is the business group (which can be considered as a

part of the general public) have been indirectly taking part in policy making by influencing

the policymakers through raising their concerns and stakes.

6. Neoliberalism in Health Care System

Health care reform is occurring around the world within the context of globalization,

neoliberalism.The neoliberal philosophy resonates with policy makers and members of the

private sector where national health care policy is currently being reshaped depending on the

neoliberal world’s view. While explaining the basic assumptions of this paradigm, the paper

will illustrate how this world’s view provides justification for the current trend towards

privatizing, weakening and reforming health care systems.

6.1 Positioning Health Care policy within Social policy:

Social policy is a means by which a society protects and enhances human life and dignity

while “Health Care” is often considered one of the three pillars of social policy, along with

education and social welfare/income security. Generally, health care policy is comprised of

government’s decisions affecting cost, delivery, quality, accessibility and evaluation of

programs, traditionally funded through taxation, designed to enhance the physical well-being

of all members of the population, with special focus on children, elders and, in some nations,

aboriginals and women. The health status of a nation can be a reflection of the health care

policy in place. The welfare of the consumer in a health care system relates to issues such as

safety, choice (encompassing cost, availability, accessibility and quality), information,

redress, having a voice, and health education. In a publically funded health care system, the

key delivery mechanisms are hospitals, health care professionals and public expenditures.

Recent restructuring, so called health care reform, implies different delivery mechanisms,

predominately the free-market, for-profit system.

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6.2 Neoliberalism and Health care policy:

Neoliberalism orthodoxy supports unregulated markets and a minimal welfare state,

government is seen to be limited in its efforts to intervene to temper the effects of market

forces on health and social welfare. This lack of government presence does not bode well for

consumer welfare. The neoliberal agenda of health care reform includes cost cutting for

efficiency, decentralizing to the local or regional levels rather than the national levels and

setting health care up as a private good for sale rather than a public good paid for with tax

money.

Neoliberal Rhetoric has a contribution to the transformation of health care policy for mutual,

public interest not just private interest. Neoliberalism is comprised of three principles:

I. Individualism

II. Free market via privatization and deregulation

III. Decentralization

I. Individualism:

“Individualism regards man—every man—as an independent, sovereign entity who possesses

an inalienable right to his own life, a right derived from his nature as a rational being” (Ayn

Rand, 1961:129).

Neoliberalists eliminate the concept of the public good and the community and replace it with

individual and familial responsibility. Advocates of neoliberalism believe in pressuring the

poorest people in a society to find their own solutions to their lack of health care, education

and social security. The values of neoliberalism are ownership of private property,

competition and an emphasis on individual success measured through endless work and

ostentatious consumption. These values reflect three basic tenets of neoliberalism:

(a) The necessity of free market (where we work and consume),

(b) Individualism, and

(c) The pursuit of narrow self- interest rather than mutual interest, with the assumption

that these three tenets will lead to social good.

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In neoliberalism, people do not care about the social conditions of production and work (e.g.,

nurses, care givers, doctors) but they do respect private property and they do get their

personal identity through private consumption. Many corporations delivering health care live

to sell, be damned the social or equity consequences, and feel quite justified in doing so.

Neoliberalists see no need for government to implement policy to ensure fair redistribution of

the nation's wealth, thereby narrowing the gap between the haves and have not’s. Any

transfer of monies by the state from one social group to the other (e.g., welfare recipients,

unemployment or health care benefits) are seen to hurt the rules of the market, which say that

only those who are part of the transaction should benefit from the transaction. Consequently,

social policies (including health care policies) are totally meaningless for neoliberalists since

they are seen as a type of discrimination for those who do not get to benefit from them.

Neoliberalists assume that all members of society should be treated equally with no

preferential treatment, their interpretation of social justice. Social po licy that targets certain

groups or needs in society (e.g., health care needs) is seen as preferential because only certain

people benefit which is, not all are seen to benefit from the government intervention.

II. Free Market via Privatization and Deregulation:

The major aim of neoliberalism is the deregulation and privatization of all public and state-

owned enterprises (often comprising schools, universities, health care, public infrastructures

such as roads, public transportation etc.), in order to ensure sustained economic growth,

innovation, competition, free trade, respect for contracts and ownership of property. It is

believed that the public sector (government) has to be reduced as far as possible to create a

free market. In a free market, all decisions about what to produce, how and using what

resources are made by business not by government. So that the consumers would be spending

their discretionary money on health care in the market place rather than receivinghealth care

from money collected in taxes and siphoned from the free market. This positionprovides

justification for a call for tax cuts to increase discretionary consumer spending on health care

in the private markets - let consumers make their own choices.

Deregulation involves -

26

i. Removing pieces of law that previously enabled government to deliver a service to

the public or

ii. Reworking laws so that more power is given to the private sector.

In the eyes of neoliberalists, markets are far superior to government in the allocation of

scarce resources (the underlying principle of economics).They believe that it is time to stop

government growth at all costs and switch energies to economic growth.

Privatization involves –

i. Arranging for a service to be provided for in the competitive marketplace rather than

government providing the service using tax dollars.

ii. The “private” in privatization refers to the business sector versus “public” which

refers to services paid for with money collected from the public in the form of taxes.

Anything that reduces government regulation that could diminish profits is justified under

neoliberalism including eliminating policies that protect the environment, human rights or

labour rights.

Health care policies do not escape this logic. The neoliberal assumption that private

ownership of formerly public assets (hospitals, clinics, etc.) generates economic growth is a

driving force behind market-oriented health care reform. Neoliberalists fervently believe that

private market mechanisms (supply, demand and price) are more efficient than public ones

because they generate profit and allow the benefits (choice, quality, accessibility) to trickle

down to ordinary citizens.

III.Decentralization:

The principle of decentralization defined as transfer of power arrangements and

accountability systems from one level of government to another.

The principle of Decentralization is supposed to –

i. Bring about more rational and unified health service that caters to local

preferences,

ii. Improve implementation of health programs,

iii. decrease duplication of services,

27

iv. Reduce inequalities between different target audiences,

v. contain costs due to streamlining,

vi. Increase community involvement in health care,

vii. Improve integration of health care activities between public and private

agencies and

viii. Improve coordination of health care services.

Although the neoliberal system advocates transferring central state power, responsibilities

and accountability to provincial, state, municipal or regional governments, the World Bank

concedes that there is little evidence that decentralization in health care actually works. For

instance, devolving central government responsibilities for health care to local levels leads to

more and smaller less accountable, less visible and less accessible health care centers. These

services are often off loaded onto smaller governments which do not have the ability or the

money to offer the same level of health care service.

Because of decentralization, the health care system may be so inaccessible, undependable and

inefficient that, people feel they are making a good consumer choice to buy health services in

the marketplace. This market choice leads to fewer people seeing themselves as citizens who

have right to health care paid for from tax money. Then, the survival of the fittest principle

sets in and people no longer feel it as their responsibility for health care for everyone.

7. Neoliberal Policies in Health care System:

“Neoliberalism seeks to disentangle capital from these constraints” (Harvey, 2005).

Neoliberalism was emerged as a remedy to a massive economic crisis that was started 35

years ago roughly, as the older formula was not working anymore against the capital

accumulation, high rates of unemployment and inflation worldwide. The main points of

neoliberalism include liberating private enterprise from any bonds imposed by the

government, shrinking the role of the state, cutting public expenditure for social services such

as education and healthcare, encouraging foreign direct investment by lowering trade

barriers, eliminating borders and barriers to allow for the full mobility of labour, capital,

goods, and services, rising capital flows, deregulation, decentralization, and privatization

(Martinez & Garcia, 2001; World Bank, 2002).

28

The worldwide implementation process of Health care policies, which are promoted by

international financial institutions such as the World Bank, International Monetary Fund

(IMF), and World Trade Organization (WTO), are generally called as ‘global integration’ or

‘globalization’. The World Bank provides loans and credits for financing infrastructure

projects, reforming of particular sectors of the economy, and structural reforms in health,

education, private sector development, agriculture, and environmental resource management

(World Bank, 2009).

7.1 Neoliberal Transformation of Health Care Policies:

Diagnosis

World Bank prepared a milestone report in 1993, titled ‘Investment in Health’, which

summaries the neoliberal policies in healthcare and guides the neoliberal transformation of

healthcare systems worldwide, including the developed and developing countries (World

Bank, 1993). A new approach was proposed for finance and organization of healthcare

services worldwide, based on the argument that the then-existing various health systems had

failed. According to the report, four major problems of health systems globally were –

i. Misallocation of resources,

ii. Inequity of accessing care,

iii. Inefficiency and

iv. Exploding costs.

It was claimed that government hospitals and clinics are often inefficient, suffering from

highly centralized decision-making, wide fluctuations in allocations, and poor motivation of

workers. Private providers were more technically efficient and offer a service that is

perceived to be of higher quality. Quality of care was also low, patient waiting times were

long and medical consultations were short, misdiagnosis and inappropriate treatment were

common. Also, public sector had suffered from serious shortages of drug and equipment, and

purchasing brand-name pharmaceuticals instead of generic drugs was one of the main reasons

for wasting the money spent on health.

29

Treatment:

As a comprehensive treatment plan to the structural problems diagnosed, defining the costs as

a first priority, and letting the stage to another actor, private sector, were proposed (World

Bank, 1993). According to the report, government policies for improving health had to

change in ways summarized below:

Cost-effectiveness was presented as the main tool for choosing among possible health

interventions and addressing specific health problems, and disability-adjusted life

years (DALY) as the measure of burden of diseases.

Governments were recommended to decide their countries’ health priorities and

resource allocation policies according to cost-effectiveness and DALY. Less cost-

effective services such as tertiary care, heart surgery, treatment of highly fatal

cancers, expensive drug therapies for HIV, and intensive care for seve rely premature

babies should not be paid by government; because “it is hard to justify using

government funds for these medical treatments at the same time that much more cost-

effective services which benefit mainly the poor are not adequately financed” (World

Bank, 1993).

Only a minimum package of essential services, which only covers five groups

(services to ensure pregnancy-related care, family planning services, tuberculosis

control, control of STDs, and care for the common serious illnesses of young

children), should be paid by the government, while the rest of the health system

becomes self-financed.

Charging user fees, strengthening the legal and administrative systems for billing

patients and collecting revenues are the proposed ways for ensuring cos t-effective

clinical care.

When well informed, households should buy healthcare with their own money and,

may do this better than governments can do it for them.

Greater reliance on the private sector to deliver clinical services would raise

efficiency.

Governments should privatize the healthcare services, by selling the public goods and

services, buying the services from the private sector, and supporting the private sector

with subsidies. Unnecessary legal and administrative barriers private doctors and

pharmacies face need to be removed.

30

Government financing of public health and essential clinical services would leave the

coverage of remaining clinical services to private finance, usually mediated through

insurance.

Governments need to promote competition in the financing and delivery of health

services, because it improves quality and drive down costs in the supply of health

services and inputs, particularly drugs, supplies, and equipment. Exposing the public

sector to competition with private suppliers can help to spur such improvements.

There is also considerable scope for improving the quality and efficiency of

government health services through a combination of decentralization, and

performance-based incentives for managers and clinicians. In the long run,

decentralization can help to increase efficiency.

On the other hand, government regulation is also crucial, because:

Private markets alone provide too little of the public goods crucial for

health, such as control of contagious diseases.

Private markets will not give the poor adequate access to essential clinical

services or the insurance often needed to pay for such services.

Government action may be needed to compensate for problems generated

by uncertainty and insurance market failure.

Safety and quality of privately delivered health services should be ensured.

Regarding pharmaceuticals, it was maintained that governments pay too much for drugs of

low efficacy, and drugs and supplies are stolen or go to waste in government warehouses and

hospitals. Competition should have been introduced in the procurement of drugs. National

essential drug lists, consisting of a limited number of inexpensive drugs that address the

important health problems of the population, should also be developed, and used to guide the

selection and procurement of drugs for the public sector. In other words, the other drugs

should not be reimbursed.

Besides, intellectual property rights (IPR) in pharmaceutical sector should be protected by

specific international agreements (e.g. TRIPS), and bilateral, regional and international free

trade agreements (e.g. NAFTA) in order to ensuring the continuing and widespread

availability of pharmaceuticals. Patents, data protection and data exclusivity were defined as

31

the main tools implemented for protecting IPR (World Intellectual Property Organization,

2004; WTO, 1994).

The whole process mentioned above, that can be named as commercialization of healthcare

services, was implemented worldwide in the last 20 years. It is possible to see that changes

are being made by the book: A general health insurance system, which has set up a new tax,

was introduced first, and a minimal service package was defined. Then the health centers for

primary health services were transformed into family physicians ’ private practice,

performance–based payment, which is calculated by quantity only, was introduced. Service

organization and planning were deregulated and left to market rules, private sector was

subsidized by public funds intensely, and public institutions were forced to compete with it

by cutting the government support. In the last phase, public hospitals are to be transformed

into autonomous institutions which are administrated by executive boards that include

representatives of trade chamber, and healthcare professionals who are employed by the

government will be contracted workers without job-guarantee.

8. Neoliberalization in Policy Planning of Urban Health Sector in

Bangladesh:

As is the case elsewhere in Asia, urbanization is growing at a rapid pace in Bangladesh. With

the increased urbanization, the basic amenities of life are not expanding for the urbanites.

Rather, the increased populations have been exerting continuous pressure on the existing

limited facilities. The poor, who constitute a large portion (45 per cent) of the urban

population, are the principal victims of this predicament and are significantly disadvantaged

in access to basic services, particularly public health services. Urban governance has yet to be

efficient enough to deal with this urgent issue. The country still lacks adequate policy

direction for urban public health and the management of existing services is also quite

inefficient.

In recent times, the world has been witnessing rapid urbanization; it is even more rapid in

developing countries. According to projections by the United Nations, rapid urbanization of

the Asia-Pacific region will continue and, by 2025,the majority of the region’s population

will live in urban areas (ESCAP 2007,para. 5).

32

In South Asia, the percentage of the population living in urban areas is increasing and, as a

part of this trend, Bangladesh is urbanizing at a rapid pace. Though the country is rural, a

national daily notes that 27 per cent of its population lives in urban areas (“The costs o f

urbanization”, The Financial Express (Dhaka),1 July 2007) and the urban population has

been growing at over 3.5 percent annually (CUS, NIPORT and MEASURE Evaluation 2006,

p. 13).

The national census conducted in 2001 showed that, over the previous 10 years, the

population in urban areas of the country had grown by 38 per cent, compared with only 10

percent in rural areas (Bangladesh 2003). Hossain (2003, p. 2) notes that, in 1974,only 7.86

per cent of the total population lived in urban areas. This figure had reached 20.15 per cent by

1991, and it is anticipated that the urban population will reach 36.78 per cent by 2015. A

projection in the National Water Management Plan also shows that, in the next 30 years, the

urban population of Bangladesh will outnumber the rural population and the density of the

already overly dense population will increase tremendously (Bangladesh 2005b, p. 10).In

Bangladesh, rural poverty, river erosion and better employment opportunities in urban areas

are the reasons that an increased number of rural people move to the cities.

33

The additional rural migrants exert tremendous pressure on the already scarce urban utility

services and other amenities of urban life, resulting in a lack of access to basic services

relating to primary health and public health services, such as water, sanitation, waste disposal

and food safety. In Bangladesh, only 72 per cent of the urban population has access to the

water supply (Bangladesh2005b). No urban area except Dhaka (the capital city) has a

conventional sewerage system and only 20 per cent of the population of Dhaka is served by

the sewerage network; only 50 per cent of the solid waste generated in urban areas in

Bangladeshis collected daily, leaving the remaining waste scattered on the streets and causing

environmental pollution (Asian Development Bank 2008).The urban residents least able to

compete for such limited supplies are the poor, who constitute nearly 45 per cent of the urban

population (CARE 2005).

As they do not have the resources to make alternative arrangements to meet their basic needs,

they are almost excluded from access to public health services, including pure water,

sanitation, food safety and waste disposal. In urban areas, the poor mostly live in a damp,

crowded and unhygienic environment. They are highly vulnerable to environmental hazards

and to various infectious and non infectious diseases, while access to primary health services

remains excessively poor.

34

Impoverishment continues due to a lack of serious concern for the urban poor at the national

level. Policy lacks a clear-cut direction regarding urban public health and the urban poor. The

legal basis for public health services in urban areas is provided through various local

ordinances, the execution of which is very poor. Urban local bodies, called city corporations1

and municipalities or pourashavas, are mainly responsible for managing public health

services in urban areas but they are ill-equipped to provide the required services. In addition

to the local bodies, various central Government organizations, private entities and non-

governmental organizations (NGOs) are also engaged in the provision of primary and public

health services. Despite the existence of multifarious service provisions, access to these

services for the urban poor is grossly inadequate due mainly to poor governance.

The discussion is organized into six sections. The first two sections illustrate the nature of the

urban governance of primary and public health services, including water, sanitation, waste

disposal and food safety, through a review of existing policy and relevant legislation and the

institutional arrangements for their implementation. The next two sections focus on the na ture

of policy implementation in practice by illustrating the nature of urban poverty in Bangladesh

and the extent of access the urban poor have to primary and public health services. Based on

these illustrations, the penultimate section pinpoints the policy and institutional weaknesses

contributing to the limited access of the urban poor to the existing services. The final section

of the paper concludes the study and puts forward certain recommendations for improving the

situation which have implications for the Asian region at large.

8.1 The Policy Framework:

This section illustrates the legal provisions of urban health services as articulated in the health

policy document and the relevant legislation. According to the Universal Declaration of

Human Rights, everyone has the right to a standard of living adequate for health and well-

being (United Nations1948, art. 25), and it is always the responsibility of government to

ensure it no matter how daunting the problems of delivery may be (World Bank 2003).

Likewise, the provision of basic health services is a constitutional obligation of the

Government of Bangladesh. Article 15 of the Constitution (Bangladesh 2004) stipulates that

it shall be a fundamental responsibility of the State to ensure the provision of the basic

necessities of life, including food, clothing, shelter, education and medical care. Again, article

35

18 of the Constitution asserts that the State shall raise the level of nutrition of its population

and improve public health as its primary duties.

The National Health Policy of Bangladesh was first adopted in 2000 and has recently (2008)

been revised. It reaffirms the constitutional obligation of providing basic medical services to

people of all strata (article 15) and improving the level of nutrition and public health (article

18). The policy also aims to develop a system to ensure the easy and sustained availability of

health services to the people, especially communities in both rural and urban areas. It aims to

reduce the degree of malnutrition among people, especially children and mothers, and to

implement an effective and integrated programme to improve the nutritional status of all

segments of the population. It aims to undertake programmes to control and prevent

communicable diseases and reduce child and maternal mortality rates to an acceptable level

and to improve overall reproductive health resources and services.

The principle of the policy is to ensure health services for every citizen and the equal

distribution of available resources to solve urgent health-related problems, with a specific

focus on the disadvantaged, the poor and the unemployed. To ensure the effective provision

of health services to all, the policy adopts a primary health care strategy and adheres to the

principle of facilitating and encouraging collaborative efforts between governmental and non-

governmental agencies. NGOs and the private sector will be encouraged to perform a role

complementary to that of the public sector in the light of governmental rules and policies.

The policy also adopts the strategy of integrating the community and local government with

the health service system at all levels.

Thus the priorities of the policy include the following:

• Providing health services for all, particularly the poor and disadvantaged,

• Improving maternal and child health services,

• Ensuring adequate nutrition for mothers and children through targeted programmes,

• Preventing and controlling communicable diseases,

• Engaging in public-private partnerships;

36

To support the execution of these policy statements, legislation has been promulgated from

time to time, but there is no specific legal provision relating to urban health care. Various city

corporation and pourashava ordinances deal with urban health issues. The Pourashava

(Municipality) Ordinance of 1977, the city corporation ordinances of 1982 and 1983 and the

recently revised local government(city corporation and pourashava) ordinances of 2008 have

all clearly assigned urban local government institutions with responsibilities regarding the

provision ofhealth services for their residents (Bangladesh 2008). As per the 2008

ordinances(schedules II and III), the city corporations and the pourashavas will be

responsible for the provision of a wide range of primary and public health services, including

the removal, collection and management of garbage; the prevention of infectious diseases; the

establishment of health centers, maternity hospitals and dispensaries; and water supply,

drainage and sanitation.

The Penal Code of 1860 ensures food safety, stipulating that anyone involved in the

adulteration of food or drink and sales of such products shall be punished by imprisonment

for a term of up to six months, or by a fine of up to1,000 taka,4 or both. The legislation also

prohibits the sale of adulterated drugs.

Later, the Pure Food Ordinance of 1959 was promulgated with provisions for food safety for

the citizens of all urban areas. The Bangladesh Standards and Testing Institution Ordinance

were promulgated in 1985 to ensure food safety. The food policy of Bangladesh also aims to

ensure the food safety of its population. There is no specific regulation for waste management

in Bangladesh.

City corporation and pourashava ordinances provide the legal provisions for waste

management in urban areas. The Bangladesh Environmental Conservation Act of 1995

provides for conservation of the environment, the improvement of environmental standards

and the control and mitigation of environmental pollution.

Under the Act, the Department of Environment was formed under the Ministry of

Environment, with the specific authority and responsibility to conserve the environment

(waste management) and even to accept assistance from law enforcement agencies and other

authorities as and when necessary. The following section describes how public health

services are being managed in urban areas in practice under the guidance of this policy and

legislation:

37

(A) Access of Poor in Health Services:

Accessibility is determined by the availability and affordability of services. Although the

urban poor can manage most of the basic human services informally ,by themselves, to

survive, health services is the one area that is beyond their control (Riley and others 2007).

Despite the fact that services are provided by various types of providers—public, private and

NGO—access of the poor to these services is quite limited. On the other hand, their earnings

are so low that expenditures for health care consume a negligible amount. The general

tendency of the urban poor is to spend a higher proportion of their income on food and

housing, while lower priority is given to health and education costs. The present section

depicts the extent of the slum poor’s access to primary and public health services in the

capital city of Bangladesh.

Although slums reflect urban poverty in a concentrated manner, all of those living in slums

are not poor. Usually, the per capita income; socio-economic status, particularly the housing

condition; and the possession of durable items inside the homes a re popular methods of

identifying the poor. The present study has considered these factors and the upper and lower

poverty lines set by the Household Income and Expenditure Survey (Bangladesh 2005c)

based on the cost of basic needs method as the basic criterion for identifying the poor.

According to the Survey, in 2005, for the Dhaka metropolitan area, the per capita income of

the poor at the lower poverty line was 820.26 taka ($11.83) and that of the poor at the upper

poverty line was952.67 taka ($13.74).

(B) Access to Public Health Services:

As a concept, public health refers to the broader and comprehensive view of health, as it

means the promotion and protection of the health of the general public. Public health services

are those that are provided to the general public by the government or NGOs to help them

live a healthy life. A pure water supply, hygienic sanitation, waste disposal and food safety

are significant among these services. The urban slums are the worst victims of the inadequate

provision of these services, mainly due to the refusal of the authorities to install

infrastructures in their informal settlements and also because of a high population density in a

limited space.

38

(C) Access to primary health care:

Bangladesh has achieved impressive progress in some health indicators of the Millennium

Development Goals, but there are gaps in the health conditions between the rich and the poor,

and also between the urban poor and the rural poor. In fact, the deprivation of the urban poor

is worse than that of the rural poor. The Ministry of Health itself admits that the health

indicators for the urban poor are worse than those for the rural poor due to the unavailability

of urban primary. Health care and poor living conditions (Asian Development Bank 2008, p.

181).

Infant and child mortality rates in urban slums are higher than the national average figures. In

urban slums, the infant mortality rate is 63 per 1,000 live births, while itis 29.8 in non-slum

urban areas and the national rate is 52. Similarly, thecontraceptive prevalence rate and the

total fertility rate are higher in slums than inthe non-slum urban areas.

The study finds a high prevalence of many communicable and non-communicable diseases

among the slum dwellers during a period of six month speeding the study. The respondents

reported fever (95 per cent), cough and cold (57 per cent), diarrhoea (53 per cent), skin

39

diseases (28 per cent), intestinal worms (17 per cent), and rheumatic fever (17 per cent) and

jaundice (10 per cent), although they were better protected from six preventable diseases

through the Expanded Programme of Immunization. In the selected slums, nearly universal

immunization coverage was found, as 91 per cent of the respondents reported that their

children had been fully immunized, mainly by the city corporation. Although various types of

curative services existed in the study areas, access of the poor to these services was quite

limited.

The treatment-seeking pattern of the urban poor depends on the severity of the illness. In the

case of minor illnesses, they do not see any doctor. Only in the case of major illnesses do they

opt for medically trained providers. Multiple sources of treatment were found in the study

areas, including: dispensaries/chemist shops, private for-profit and not-for-profit clinics,

public hospitals, NGOs and traditional/religious healers. Among these sources, public

hospitals provided low-cost and low-quality services, while private not- for profit hospitals

provide low-cost but quality treatment to the poor. A World Bank (2007a) study notes that

only 12 per cent of all urban poor report getting medical services from the government

service centers. NGO services are also popular among the poor because they are cheap. In the

selected slums, NGOs under the Urban Primary Health Care Project of the Ministry of Local

Government and Rural Development provided free health cards to the poor, which entitled

them to free medical care for simple ailments and delivery services during childbirth.

When asked about their first point of contact during an illness, 60 percent of the respondents

cited chemist shops as their preferred facility, making them the most popular choice for the

treatment of diseases. The second most popular facilities, preferred by 43 per cent of the

respondents, were private not-for-profit hospitals providing quality services at low cost. The

NGO clinics were slightly preferred (38 per cent) over public hospitals (37 per cent). Some

respondents also sought care from private doctor’s offices (13 per cent) and traditional

healers (10 per cent). In the case of minor illnesses (e.g. fever, cough and cold, stomach pain

and diarrhea), people usually opted for self-treatment by procuring medicine directly from a

dispensary or went to traditional healers. NGO facilities or private low-cost hospitals were

also visited for minor illnesses, but these facilities were usually visited when diseases were

not successfully treated by the previously cited sources.

40

(D) Maternal and child health: care-seeking pattern:

The majority of the households (82.76 per cent) in the selected slums had their last children

delivered at home, assisted by the elderly women in the family or in the neighborhood,

mostly mothers/sisters/mothers- in-law or untrained traditional birth attendants, because it was

cheap. Cost is a key barrier to access of the poor to delivery in an institution. The study found

a good number of women (55.17 per cent) having antenatal visits (1-3) during pregnancy,

while the number of them opting for post-natal care was negligible (13.79 per cent). Family

planning services were usually obtained from four sources: chemist shops, NGO facilities,

domiciliary health workers and the city corporation. Of these sources, the utilization of city

corporation services was the least common (10 per cent), while NGOs were the most popular

source (24 percent) and chemist shops were the second most popular. In urban slums, minor

diseases of children are usually treated by nearby dispensaries/chemist shops or traditional

healers. If they cannot be cured from these sources, then they have to be taken to hospitals or

clinics. Children are usually taken to the hospital with end-stage complications, as the

illiterate poor parents know little about the magnitude, distribution and risk factors of these

illnesses. The consequences of these end-stage treatments are cost escalation and even, in

some cases, the death of the child. Thus, the urban poor are highly impoverished in terms of

having access to public and primary health services. The following section describes how the

various factors of urban governance contribute to this impoverishment.

41

9. POLICY AND INSTITUTIONAL STATUS: CONSTRAINTS ON ACCESS TO

HEALTH SERVICES:

The preceding discussions demonstrate that the Government has a national health policy and,

from time to time, various pieces of legislation relating to health have been promulgated.

Furthermore, various types of public, private or NGO services (both targeted and non-

targeted) exist, but their implications for the poor are quite limited, as various studies show

that the health status indicators of the slum poor are significantly lower than those of the non-

slum urban residents . The present study also depicts a disquieting picture about the access of

the urban poor to primary and public health services. All of these facts signal poor

governance in the provision of public health services for the urban poor. Governance

weaknesses causing inadequate access of the urban poor to primary and public health services

are manifold, but they fit broadly into two categories: policy weaknesses and institutional

weaknesses (in implementing the policy).This section attempts to identify the policy and

institutional weaknesses causing inadequate access of the poor to the services provided.

42

(A) Policy weaknesses:

The policy weaknesses that cause the urban poor to have limited access to health services

include inadequacies in policy content resulting in an inability to address urban health issues

properly. In the health policy arena, public health has not been considered a priority issue. In

the National Health Policy, the term “public health” has been referred to in a vague manner

without any clarification. The policy has a narrow focus on health issues, as it has stressed the

importance of primary health and maternal and child health services to achieve its objective

of improving public health, without adequately emphasizing the improvement of water

supply, sanitation, food safety and solid waste management.

Another weakness of the existing policy is that it lacks a specific policy objective or principle

regarding the health of the urban poor. The policy has a clear bias towards rural areas, as

national statistics indicate that that is where the majority of the poor and disadvantaged

inhabitants of the country live. At the same time, a significant portion of the urban population

is poor, their number is increasing, and they live in more unhygienic conditions than their

rural counterparts. These realities have yet to receive due attention in the national policy. On

the whole, the policy objectives are too broad to have a specific impact on urban health.

In 2008, the health policy was revised by the non-party caretaker Government, paying

attention to the health of the urban poor for the first time. It proposed to adopt an urban health

sector strategy with the help of the Local Government Division of the Ministry of Local

Government in order to ensure primary health, family planning and reproductive health

services for the urban poor. In addition, it also proposed to undertake steps to revise and

update the laws related to food safety and emphasized proper hospital waste management.

The revised policy was left unapproved by the previous Government. Currently, the newly

elected Government has also expressed its intention to revise the health policy soon, the

outcome of which has yet to be seen.

In addition to the health policy document, there are many acts and regulations that provide

the legal basis for public and primary health services in urban areas. However, the majority of

these regulations are outdated and, for some public health issues, there is no regulation at all.

The absence of any act, regulation or guideline regarding waste management creates a serious

vacuum in the case of waste disposal. In the absence of a policy or any specific legislation,

43

the local bodies cannot set the requirements, standards or guidance for developing their waste

management services and infrastructure. The city corporation and pourashava ordinances of

2008 that regulate waste management in urban areas have no specific article regarding the

involvement of NGOs or other community-based organizations in waste management and

their rights to collect revenue to cover the cost of the services provided. Although the

ordinances have provided for the delivery of services by public-private partnerships, in

practice, they have failed to encourage adequate private sector participation, as the rights,

responsibilities and incentives for participation have not been specified (Asian Development

Bank 2008).

(B) Institutional weaknesses:

Besides the policy inadequacies, the lack of implementation of the policy and legislation due

to institutional weaknesses is another aspect of poor governance. As the local bodies are the

key implementing agencies, the effectiveness of public health services is closely influenced

by their leadership quality and managerial capacity. Most of the local government institutions

lack the capacity required to implement the policy, legislation and associated programmes.

The following institutional weaknesses cause the poor to have limited access to public health

services:

1. Local bodies lack of vision:

In Bangladesh, urban local government bodies have yet to have visionary leadership, mainly

because they lack autonomy. Local bodies are not financially independent and they have no

autonomy in decision-making. They are financially dependent on grants from the central

Government, as locally mobilized resources (mainly from property taxes) are often

insufficient even for their basic operation, let alone for public services. Thus, local bodies

depend on the centre for policies, plans, financial resources, human resources and even for

budgetary decisions, which severely restricts the creativity and innovativeness of local

leaders. Moreover, local leaders lack adequate knowledge and proper training to become

visionary with regard to the socio-economic development of their locality. In most cases, the

44

local government functionaries act as agents of the Government to execute its decisions. This

state of local government has been continuing since the country’s independence in 1971, and

the situation remains unchanged. Although the present Government in its election manifesto

pledged to create a strong and autonomous local government by decentralizing power to the

upazila (sub district) level through the formation of elected bodies, since assuming power, it

has been retreating from its promises. Such locally elected bodies have been formed, but they

have been kept non-functional as controversy has arisen over the Government’s decision to

retain central control over local affairs by granting power to the members of the parliament to

interfere in local level development activities, which the elected local leaders are not ready to

accept. To empower the lawmakers to intervene in the functioning of the newly elected

upazila parishads (councils), the parliament also recently passed the Upazila Parishad Act of

2009. According to this law, the parishads are not allowed to send development plans to the

Government without recommendations from the lawmakers (S. Liton, “UpazilaParishad law

goes against SC [Supreme Court] verdict”, Dhaka Daily Star, 19 April 2009). Thus, visionary

local leadership is still far from a reality in Bangladesh.

2. Lack of adequate authority of local bodies:

Although the pourashava sand city corporations are formally autonomous, in reality, their

autonomy is quite limited. The city corporation and pourashava ordinances of 2008 empower

the elected local bodies to plan, implement, operate and maintain public health infrastruc ture

and services without providing adequate financial and human resources and the required

authority. The World Bank (2007b, p. 109, para. 5.25) explains the lack of authority of local

bodies in this way: “Local autonomy is further stifled by the fact that local governments have

little or no choice on the staffing, nor do they have control over the wages for their

employees. Further, key personnel at the local levels are central Government employees with

limited accountability to residents”. The administrative operations of local bodies, including

the daily implementation and management of their budgets, are also subject to the rule-

making authority of the central Government (2008 Pourashava Ordinance, section 146; 2008

City Corporation Ordinance, section 157). Due to these weaknesses, local bodies fail to

perform their assigned functions properly.

45

3. Inadequate budgetary allocations for local bodies:

According to the city corporation and pourashava ordinances, local bodies are supposed to

spend 8 per cent of their budget on public health and 1 per cent on primary health care.

However, in practice, they spend only 4 per cent of the total budget on public health and less

than 0.5 per cent on primary health care. The reduced expenditure on public health and

primary health care is perhaps due to the lower priority placed on public health in the national

health policy document and partly because local bodies have scarce resources. As mentioned

earlier, local bodies are heavily dependent on central Government grants and the internal

revenues raised are not sufficient to perform their functions. Funds are often disbursed at a

reduced level and the disbursement usually specifies the areas on which funds are to be spent.

At this point, infrastructure development and road maintenance usually take priority over

public and primary health services. The processing of tax returns and the collection of taxes

by local bodies is at least ten times less than is required for the efficient management of

public services (Asian Development Bank 2008). Although holding taxes account for two

thirds of the total tax revenue, they are collected inconsistently, as people have a tendency to

evade taxes and the tax administration is not efficient enough to raise a fixed amount of tax

regularly. Externally funded projects for primary health care in urban areas are also scant.

There is no dedicated project targeted towards public health care, in general, and towards

urban primary health care, in particular, except the Second Urban Primary Health Care

Project. Finally, as a wide variety of functions compete for limited resources, public health

receives a lesser allocation (as a lower priority issue). Usually, a major portion of the revenue

earned is spent for staff salaries and benefits. In fiscal year 2006/07, for instance, 63 per cent

of the revenue earnings of Dhaka City Corporation was spent for employee salaries and

allowances (Asian Development Bank 2008).

4. Inadequate human resources:

The manpower of the local bodies is quite inadequate to perform the functions assigned to

them. A large number of vacancies in both city corporations and pourashavasis common. For

instance, although the Pourashava Ordinance of 1977 has a provision for a slum

improvement officer in pourashavas, the position has yet to be introduced. Although the Pure

Food Ordinance of 1959 provides for the appointment of a public food analyst by the local

46

bodies, in practice, they do not yet have such staff. In addition, many important positions,

such as health officer or chief executive officer, are often vacant. Moreover, the existing

human resources of local government institutions are not adequate to provide public health

services to city dwellers. For instance, Dhaka City Corporation has only two posts for food

and sanitation officers, four posts for health inspectors and four posts for sample suppliers in

its food and sanitation branch, which is quite inadequate to manage the huge task of food

safety and quality control in Dhaka city (Asian Development Bank 2008).

5. Lack of monitoring:

Although in urban areas, various community-based organizations and private associations are

involved in the provision of health services, sanitation services and waste management, their

jobs are not monitored effectively and they are not accountable to the local bodies or to the

Local Government Division of the Ministry of Local Government and Rural Development.

6. Lack of coordination:

Public health is a complex issue with multispectral mandates. It involves the functioning of

various ministries, including the ministries of local government, environment, health, food,

commerce, and housing and works. These ministries are performing their public health

functions in an uncoordinated manner, which often causes an overlap of functions and

services. There is no common platform to coordinate the activities of all of these ministries.

Due to a lack of coordination, the roles and responsibilities of different ministries with regard

to health are not clearly delineated and, consequently, resources are not allocated in an

effective manner. Although local government institutions are the key implementing agencies

of public health programmes, they are not strong enough to coordinate their functions with

the relevant ministries. A wide range of private organizations and NGOs supplement

government functions, but they are not working in a coordinated manner, either. The

activities of these NGOs are not properly linked with the pourashava activities. The absence

of an integrated pectoral approach to manage urban health services is the reason for this lack

of coordination.

47

7. Inefficiencies and weaknesses of the institutions providing health-care services

Despite the existence of some targeted programmes for the poor—for instance, free or

subsidized health cards provided by NGOs and subsidized low-cost services at public

hospitals and not- for-profit private hospitals—the poor do not have adequate access to them.

The prime causes include the following: public sector and NGO services are not always

cheap for the poor because they often still have to buy medicine (in most cases, it is not

provided for free) and make many informal payments (in the form of “tips”) at the facilities;

the institutions are not poor- friendly; the poor are not fully aware of the entitlements of the

NGO health cards; and waiting times are long, which leads to a loss of working hours

when visiting the health facility. The present study finds that cost is a major barrier

preventing the poor from accessing services. Low cost attracts the poor to public hospitals

(mostly as the last resort), but varieties of informal payments and the negligence and poor

attitudes of providers towards the poor cause them to lose confidence in the facilities and,

ultimately, poor patients feel discouraged from utilizing the services. One respondent

commented: “Health services are not for the poor. It is rather something that the rich can

manage (through money or power)”. The lack of poor- friendly services at the facilities is

another major factor impeding access to services. The health service institutions, particularly

the public facilities, are allegedly not poor-friendly for a few reasons. In part, the service

providers are not properly educated about patients’ rights, as this vital component is missing

from the medical training curricula; doctors are also apathetic about their duties due to low

salaries and a lack of incentives. Another reason may be that the facilities are overcrowded

(due to the lack of a referral system), which overburdens the providers. The study also found

that the poor were not fully aware of their entitlements in different targeted programmes (e.g.

the free NGO health cards), as information, education and communication services were quite

limited for the urban poor. In urban areas, there are no government domiciliary health

workers, while this category of provider plays an important role in making the rural poor

aware of the existing services.

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9.1 Privatization policy: New thrust and clear direction

In order to streamline the lagging privatization process, the Board of Disinvestment created

earlier was replaced by an Inter-Ministerial Committee on Privatization (ICOP) set up by the

Government in 1991. ICOP’s responsibilities included development of privatization policy

and approval and monitoring of specific privatization proposals for the various administrative

ministries which have Privatization Cells to identify SOEs for privatization. ICOP worked as

a coordinating body between the line Ministry and the Executive Committee of the National

Economic Council (ECNEC) to implement privatization. However, although ICOP was

created to expedite the privatization process, the lengthy process involving several layers of

approval still remained; and ICOP lacked necessary technical capacity and autonomy leaving

the privatization process to remain slow and cumbersome. To overcome these limitations, a

Privatization Board (PB) was set up in March 1993 to formulate the modalities for

transferring SOEs to the private sector. In order to further strengthen the role of the private

sector by accelerating the privatization process, the Government has adopted a

comprehensive privatization policy in June 1993 and laid down detailed procedures to

facilitate the process of privatization. The policy has aimed at relieving the financial and

administrative burden of the Government, improving efficiency and productivity, facilitating

economic growth, reducing the size of the public sector in the economy and help mee ting the

national economic goals.

9.2 Current status of neoliberalization in Bangladesh

While Bangladesh is considered a fore-runner in carrying out privatization, there seems to be

a common belief that the overall achievement has not been all that impressive. Lack of

enough political commitment and determination, absence of sufficient legal framework,

limited institutional capacity, mistrust among the workers and above all, political discord

between the party- in-power and the opposition political parties are generally identified as

important factors limiting the progress of privatization in Bangladesh. Moreover, opposition

to the privatization of the SOEs is not limited only to the above factors, it is also orchestrated

further by the country’s left- leaning academics, political leaders and opinion moulders. While

privatization in Bangladesh began since mid-1970s and the process has evolved through

many ups and downs till then, it is difficult to arrive at any conclusive judgment on the true

49

magnitude of privatization of SOEs taking place because of lack of hard statistics on the one

hand and the controversies surrounding the mode and methods of privatization of the units

involved on the other hand. For example, a study conducted by C.A.F. Dowlah (1997) for

World Bank (referred to as World Bank Study, 1997, henceforth) points out that a total of

1089 enterprises consisting of industrial units, commercial businesses and banks etc. were

privatized in Bangladesh between 1972 and 1996. The latest study conducted by ILO (1999)

estimates a total 1083 SOEs being privatized during the same period of which 610 were

industrial enterprises accounting for 56 per cent of the total denationalized units. Of the total

industrial enterprises privatized, cotton and jute textiles were the dominant sub-sectors,

followed by metal works, engineering and steel enterprises and vegetable oils. What is,

however, interesting that the overwhelming majority (over 70 per cent) of the units privatized

between 1972 and 1981 were small-sale enterprises both in terms of investment and

employment and were returned to their original owners. Another feature emerged from the

Table is the gradual tapering-off of the speed of privatization overtime as is evident from.

Accordingly the PB prepared a list of 105 SOEs for privatization during 1994-95, but the

actual progress remained dismal with only 13 enterprises being privatized during 1992-1996.

The progress seems to have slowed down further as only four industrial enterprises have been

privatized and transferred to private ownership between June 1996 and to-date. Additionally,

LOI has been issued for eight enterprises after final approval of the Cabinet Sub-Committee

for finance and economic affairs though their eventual transfer to the buyers is yet to take

place. As noted before, the transfer process is often lengthy and subject to uncertainity due to

legal complications, heavy loan liabilities, non-transparent bureaucratic procedures and

opposition by the trade unions.

The contradictory signals about sincere implementation of the privatization policy by the

Government, deterioration of the law and order situation and dramatic increase in rent-

seeking by the musclemen are also regarded as other important factors underlying recent

slowdown in the pace of privatization.

While the Government is also trying to attract the foreign investors, the efforts so far have

met with limited success. Political uncertainty, slow implementation of the policies and

support measures, bureaucratic procedures, and lack of adequate legal protection have been

50

The main deterrents to FDI inflows. Further, foreign investors will continue to remain

hesitant in buying SOEs unless the domestic investors exhibit enough interest and dynamism

and improves the image problem.

10. Health Care for Urban Poor in Bangladesh

In Bangladesh, rural poverty, river erosion and better employment opportunities in urban

areas are the reasons that an increased number of rural people move to the cities. The

additional rural migrants exert tremendous pressure on the already scarce urban utility

services and other amenities of urban life, resulting in a lack of access to basic services

relating to primary health and public health services, such as water, sanitation, waste disposal

and food safety.

The urban residents least able to compete for such limited supplies are the poor, who

constitute nearly 45 per cent of the urban population (CARE 2005). As they do not have the

resources to make alternative arrangements to meet their basic needs, they are a lmost

excluded from access to public health services, including pure water, sanitation, food safety

and waste disposal. In urban areas, the poor mostly live in a damp, crowded and unhygienic

environment. They are highly vulnerable to environmental hazards and to various infectious

and noninfectious diseases, while access to primary health services remains excessively poor.

10.1 ACCESS OF THE POOR TO HEALTH SERVICES

Hospital:

Any formal institution providing both outdoor and indoor services with more than 30 beds. In

Dhaka city, there are enormous public hospitals including Dhaka Medical College Hospital,

Shaheed Suhrawardy Medical College Hospital, International Center for Diarrheal Disease

Research Bangladesh, Mitford Hospital and so forth. These hospitals have been rendering

health services for the poor since many years ago.

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Clinic:

Any formal institution with or without indoor services having less than 30 beds. It can be

static (services continually provided in one location) or satellite (services provided on certain

days and hours of the week). In Dhaka city, there some urban shanty where NGOs, INGOs

and community based organizations are providing health care facilities as such at Korail

slum, at Ershad Nagar slum etc.

Diagnostic Centre:

Facilities that provide medical testing and imaging facilities. In addition some also provide

outpatient services. It is almost unusual that there are no diagnostic centers for urban slum

peoples in Dhaka city. It is the extreme consequence of neoliberalism of public health in

Bangladesh.

Drop in Centre (DIC):

A facility that serves only specific groups of people such as sex workers, intravenous drug

users, or street children. Services are largely focused on health education, with clinical care

available only 1 or 2 days a week. It can be either static or satellite. This type of facility is not

common but sustaining in some risk groups of Dhaka city.

Blood Bank:

Facilities dedicated to blood collection and preservation. Clinical services are not provided.

There is no scope of blood donation and blood transfusion center in slum areas of Dhaka.

Even they have not access to formal center to collect blood.

Delivery Centre (DC):

Informal MNCH facilities run by BRAC where poor women can receive ANC and PNC

services and have normal deliveries assisted by trained birth attendants or midwives. It is an

appreciative initiative of BRAC in urban slum with a view to rendering minimum health care

facilities.

EPI center:

These facilities only provide immunization services for children under the Government’s

Expanded Programme of Immunization. A few NGOs have been contracted out for this

service to include the deprived urban poor peoples. Though governmental facilities in this

case have scarcity, EPI has been continuing since the beginning.

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Relation of Sanitation System and Taking NGO services of Slum People:

A relation lies between sanitation system and taking NGO services. But who have used local

toilets or pool, take the services. About 81 percent people using local toilet and about 7

percent using nearer pool take NGO services and about 8 percent people using local toilet,

about 1 percent using the pool and about 3 percent having own toilet do not take NGO

services.

11. Impact of Neoliberal Policies on Health Care System

There are several impacts of neoliberal policies on health in Bangladesh. Here we can see

that:

11.1 International policies responsible for the weakening of health systems

In the last three decades the international health and aid policies have been disastrous for

health care delivery and universal access. International health policies have resulted in

expensive health care for the rich, and fragmented, ineffective services for the poor. As a

result, large segments of the population continue to suffer unnecessary casualties, pain and

impoverishment.

The 1978 WHO “primary health care strategy” soon receded into the background after the

United States withheld its contribution to the WHO budget in 1985. This caused a return to

the vertical programmer strategies of the 1950s for Developing countries. Within a year of

the Alma Ata conference, the Rockefeller Foundation and UNICEF, among others, were

arguing for a reduction in the scope of public PHC to the control of 4–5 diseases, a strategy

labelled “Selective Primary Health Care”. Professionals criticized this selective policy on the

grounds that comprehensive PHC, with the same disease control objectives but also securing

access to health care, incurred the same costs as selective PHC. However, they failed to curb

the US policy which soon was supported by the World Bank.

The World Bank dismissed as irrelevant “the provision of comprehensive health care in

public services”. Many intellectuals endorsed this neoliberal perspective. Publications

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depicted public health care as inefficient. This “scientific guidance” promoted the

privatization of health care via the split of the purchaser (patient) and the provider (hospitals,

health centers), the autonomous management of public hospitals, contracting out of services,

private financing initiatives and managed care. The Financial Institutions (FMI, WB, etc.),

donors and bilateral aid agencies conditioned their loans on the acceptance of limiting public

health service delivery to disease control (labelled “prioritization”) and governments had to

accept it. The World Trade Organization (WTO) enforced the privatization of health care and

opened the developing countries health markets to Western Health Care industries.

The international development assistance (donors) set up alliances with the private sector

who received part of the aid. Most of these alliances were disease-specific, public–private

partnerships (PPP), known as “Global Health Initiatives”. In 2004, of 79 initiatives at least 20

were partnerships for vaccines, drugs, etc. Currently more than 100 PPP have initiated dozens

of worldwide disease control programmers. The proportion of development assistance

disbursed through Global Health Initiatives has increased steeply over the last decade, as has

total development assistance for the health sector as a whole, from just ove r US$ 6 billion in

1999 to US$16.7 billion in 2006. The fastest growth was in funding for HIV/AIDS

programmer from US$1.5 billion in 2002 to US$ 8.3 billion in 2006. This displaced the share

of development assistance for primary health care which declined from about 28% to 15%

over the same period. The result of all that “generosity” has been the weakening of the

national health systems necessary for an effective response to health care and prevention of

all diseases.

The big donors are creating AIDS/other disease-specific systems that compete for health

workers and administrative talent, share the same infrastructure, demand extra-work

(reporting requirements) from the public health personnel and create a drain on resources

essential to the country's Health System. Global Health Initiatives’ vertically managed

programs have the potential to undermine healthcare systems for the people and so

exacerbate health inequity.

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11.2 The neoliberal reform of health care in Bangladesh

These neoliberal policies have contributed to the loss of access to health care and have

contributed to deepen the problem of the commodification of basic human necessities and

this has life-and-death implications for vulnerable populations. Some of the effects of these

policies in Bangladesh:

1. Cuts in Health Budgets and introduction of user fees:

In Bangladesh previous budgets cut to the health sector and the introduction of user-fees for

medical services. The reduction of government health care expenditure further limited the

few health care options available to the poor. The result was a tendency for the poor not to

access treatment.

2. Reduction of Public Service

Reduction of public services and limiting them to the poor who cannot afford to pay for the

services. That increases the gap between rich and poor and weakens public services and the

health system in Bangladesh.

3. Reduction of what is understood by “the common good” by limiting health care to

the control of certain diseases

Reduction of what is understood by the common good by limiting control of certain diseases

while excluding the social determinants of health. Once predominantly providers,

governments have become simple ‘stewards” steering care by regulation and supervision. The

disease- control focus overburdened first line public healthcare delivery. Disease control

programmers financed by Western countries represent a market for the development of new

pharmaceutical products by companies that have no interest in a public health market that

dispenses mostly generic and essential drugs.

4. Privatization of healthcare services and the autonomy of hospital management

The transfer of public care to the private for-profit sector is at the core of the neoliberal

policy. They even try to work it so that public money funds privatized care. Foreign Service

providers are likely to target only the profitable sectors or the higher income earners.

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Privatization of health services increases inequity of access by favoring those who can afford

to pay for health care. It also favour the drainage of professional personnel from the public to

the private sector, thus weakening the national health system even further.

5. The Liberation of Health Services

It means that foreign companies must be treated as local companies so governments cannot

control the sector any longer. GATS (liberalization of services) are against governments

offering subsidized services that the open market also offers; this endangers subsidized public

health care services. The public sector will have to compete with the private sector.

Liberalization of health services is on its way in Bangladesh. International health care

companies searching for opportunities to access other markets lobby their governments for

health sector liberalization and GATS is opening the door for them.

6. Commercialization of Health care:

A market for health care, medical equipment and medicines is being developed. Charitable

foundations and some NGOs are often used as means to privatize and develop the market.

The healthcare market is a growing and attractive economic sector and an investment

opportunity for private actors because of the growing middle class.

7. Privatized foreign aid: public-private partnerships (PPP)

Donors established disease-specific, public–private partnerships (PPP) with the private sector

known as Global Health Initiatives. As was seen above, these partners absorbed a great part

of the foreign international aid.

8. The strengthening of Intellectual property rights (IPRs)

Patents, custom duties, data exclusivity, etc. in Trade Agreements is a barrier to accessing to

cheap and good generic medicines. As most health services are paid out-of-pocket, prices of

medicines are a critical factor in determining the level of health care. The current patent

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system delays competition from low-cost generic producers, thus raising the prices of

medicines. Generic competition lowers the prices of medicines by an average of 40-80 %.

Furthermore, increased IP protection also impedes developing countries from establishing

their own pharmaceutical industry.

9. Limited or stifled state control and regulation

Deregulation in health prevents in developing countries from protecting their health

services, giving full power to companies while limiting state intervention.

12. Strengthen the Health Systems of Bangladesh:

For strengthening the health care systems of Bangladesh we should take different measures.

They are:

Fight against the privatization of health care financing in our own country and

worldwide.

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Oppose trade in social services, including health services.

Participate in the development of non-commercial health services with a social

purpose.

Work towards the development of local, integrated health care systems.

Participate in professional and socio-political organizations concerned with equity

in access to health care.

Develop bridges between the academic community and socio-political

organizations concerned with the social aspect of health care services.

Fight for health research and education independent of private interests.

Contribute to the development of professionalism in universities that is currently

undermined by a certain “scientism” that is at the service of private sector.

Thus, urban public health becomes the particular part of globalized health sector where

poorer section has a little entry to include them. Poor health care status in urban arena reveals

wreckage condition of public health.

However, neo-liberal public health in Dhaka becomes the new source for theorizing

contemporary public health under urban governance. City’s public health might be studied

through the slum health care facilities. The neo-liberal public health in urban area will remain

an important focus of research and documentation.

13. Summary of the Study:

This study seeks to identify the inadequacies of the Neoliberal policies and practices

contributing to the lack of urban governance planning and public health services for the urban

people in Bangladesh. To summarize the study we can observe some fundamental process:

1. The world has been witnessing rapid urbanization; it is even more rapid in developing

countries. This rapid urbanization has a negative consequence over the Health care

systems for urban people.

2. The full mobility of labor, capital, goods, and services, rising capital flows,

deregulation, decentralization and privatization in health sector, are the consequences

from the adoption of neoliberalism in the developing countries.

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3. In Bangladesh, not only privatization but also restructuring as well as feeble public

health has been a acute scenario by which every citizen comprehends the reality.

4. The worldwide implementation process of such policies, which are promoted by

international financial institutions such as the World Bank, International Monetary

Fund (IMF), and World Trade Organization (WTO) etc.

5. These neoliberal policies have contributed to the loss of access to health care and have

contributed to deepen the problem of the commodification of basic human necessities

and this has life-and-death implications for vulnerable populations.

14. Conclusion

The formation of neo- liberalized public health in urban area represents a vital sphere of

research that attracted us to document an assignment on it. The above stated data,

information, policy, and other discussions constructed a consummate depiction of

neoliberalized public health in Dhaka city under neoliberalized urban governance. The

assignment reveals that neo-liberal urban governance is closely linked to the urban public

health in terms of commercializing public health. Along with these factors, the wave of

massive urbanization in Dhaka city has triggered this policy in Bangladesh. Moreover, urban

lifestyle and fortified enclaves made this process more miserable to urban poor.

Thus, urban public health becomes the particular part of globalized health sector where

poorer section has a little entry to include them. Poor health care status in urban arena reveals

wreckage condition of public health.

However, neo-liberal public health in Dhaka becomes the new source for theorizing

contemporary public health under urban governance. The city’s public health can be studied

through the slum health care facilities. The neo-liberal public health in urban area will remain

an important focus of research and documentation.

59

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