The World is Fat: How the Obesity Epidemic is Affecting the Global Economy

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Obesity falls just behind war and terrorism in terms of how much it costs the global economy: $2 trillion annually, to be exact. With more than 2.1 bil...

Obesity falls just behind war and terrorism in terms of how much it costs the global economy: $2 trillion annually, to be exact.

With more than 2.1 billion people – nearly 30 percent of the global population and nearly two and a half times the number of adults and children who are undernourished – obesity has become a critical global issue.

Apart from the social and health impacts, obesity is an economic crisis, too. Today, the toll of obesity on health systems alone is between 2 and 7 percent of all health care spending in developed economies, and that does not include the cost of treating associated diseases such as Type 2 diabetes and heart disease.

A recent study conducted by the McKinsey Global Institute sought to find out what the impact of obesity really is on the world’s economy and what the most effective measures are for combating the disease.

A Global Epidemic

Over the last decade, no country in the world managed to trim its obesity prevalence. America’s waistline continues to expand and leads the countries with the highest obesity rates at a whopping 34.9 percent, but it isn’t the only country with an obesity problem.

The report found that Saudi Arabia, the United Arab Emirates, Mexico and South Africa rounded out the top five heaviest nations in the world. In China’s largest metropolises, more than half of the population was also found to be overweight.

“It seems that many of the emerging markets that are on this phenomenally fast growth trajectory are on an even faster obesity trajectory,” said Richard Dobbs, head of the McKinsey Global Institute and one of the authors of the study, in an interview with NPR.

Obesity was once a problem only for relatively prosperous developed economies, but as incomes rise in the emerging world, the problem is spreading. Today, roughly 60 percent of the world’s obese people are in developing countries.

And if current trends continue, the report predicts that 41 percent of adults in the world will be overweight by the year 2030.

The Impact on Health Care Costs

The estimate annual medical cost of obesity in the U.S. alone was $147 billion in 2008, and the medical costs for people who are obese were $1,429 higher than those of normal weight, the CDC reported. The  McKinsey Institute found that the global cost for obesity is even higher, estimating that obesity costs the world more than $2 trillion every year, roughly the same economic impact as smoking or an armed conflict.

A large chunk of that number is due to “productivity costs,” as people who are obese often work less, needing to take more time off due to illness.

The McKinsey Institute report assessed the productivity lost to obesity using the standard measurement of disability-adjusted life years, or DALYs, which measure the number of years that are lost or rendered economically unproductive due to the disease.

The number of DALYs lost to obesity today is three times as high in developed economies as it is in emerging markets. But that gap is slowly narrowing. The rise in the number of DALYs per 100,000 lost because of obesity decreased in developed economies between 1990 and 2010 but soared by 90 percent in emerging economies.

Obese individuals also suffer from shortened life spans, and obesity is responsible for around 5 percent of global deaths. According to the World Health Organization, about 3.4 million adults die every year because they are overweight or obese.

However, as health care systems improve, many people who are overweight or obese are living longer lives. The catch though, is that they are costing the systems that much more.

As obese individuals tend to get sick more often and are prone to a number of diseases linked to their weight, their overall quality of life is significantly reduced, leading to many more trips to the doctor’s office or hospital.

Solutions to Tackle Obesity

The McKinsey study found that “no single solution creates sufficient impact to reverse obesity: Only a comprehensive, systemic program of multiple interventions is likely to be effective.”

By reviewing around 500 obesity-reduction research trials around the world, the McKinsey Institute report identified 74 interventions to address obesity in 18 areas. These included subsidized school meals, calorie and nutrition labeling, restrictions on advertising of high calorie food and drinks and public health campaigns.

According to Dobbs, an effective program to combat obesity would likely need to be “a combination of top-down corporate and government interventions, together with bottom-up community led ones,” though the study’s authors note that there is still much to be learned on how to combat obesity.

“Rather than wait for perfect proof of what works, we should experiment with solutions, especially in the many areas where interventions are low risk,” the study concluded. “We have enough knowledge to do more.” 

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