Protecting the vulnerable in times of economic crisis: It may seem like a long way from Wall Street to the Main Streets of Africa, but as developing countries have become more integrated with the world economy – through trade, migration, and investment – they have also become more exposed to radical changes in the economic ups and downs of the developed world.
Protecting the vulnerable in times of economic crisis:
It may seem like a long way from Wall Street to the Main Streets of Africa, but as developing countries have become more integrated with the world economy – through trade, migration, and investment – they have also become more exposed to radical changes in the economic ups and downs of the developed world.
The exposure and impact varies across regions, countries and sectors, but it is becoming apparent that, what started as a financial crisis is fast turning into a human development crisis. Severe slumps in demand along with a credit crunch are affecting households and companies all over the world.
In many developing countries the consequence of the economic crisis might be a slowdown and, even, possible reversal of the gains made in human development and progress; more especially towards the achievement of the Millennium Development Goals, especially in the areas of health and education.
Developing countries are facing the same economic collapse as their richer counterparts, but they do not have same resources at their disposal that the US Treasury, the European Central Bank and the Bank of Japan possess.
Unless urgent and decisive action is taken to protect the most vulnerable, the economic crisis may soon be compounded by an equally severe crisis of global social and political stability.
In 2008, nearly one and half billion people were living in extreme poverty – on just over a dollar a day. The International Labour Organisation projects that, should growth rates decrease more rapidly in 2009, as many s 50 million jobs will be lost by 2010
Relation between infant Mortality Rate and the Logarithm of per Capita GDP.
The situation will be further exacerbated if developed countries cut their aid budgets, with some of the poorest countries witnessing a complete social and economic breakdown.
According to the International Monetary Fund, aid makes up more that 50 percent of the current of the current budgetary spending in 14 of the lowest countries.
In countries such as Afghanistan, Burundi and the Democratic Republic of Congo the ratio of aid to current expenditure is estimated to have reached more than 80 percent in 2008.
Moreover, analysis of past recessions indicate that, in tough times, women, children and the poorest segments of society are most susceptible to the consequences of economic collapse.
Studies have revealed that during economic downturns in developing countries, infant mortality is five times higher for girls than for boys and that the probability of a poor child dying in some developing countries is almost four times higher that a non-poor child in the same country.
One of the key goals of the UN is to work with developing countries to manage this vulnerability, in particular: the design of social protection programmes, including safety nets.
That assistance is more crucial than ever. The ability of the world’s poorest countries to recover economically may take several years to begin, while social recovery may take much longer.
The damage to human development will be severe and irreversible. A child taken out of school today or unable to access a nutritious diet will bear the consequences for the rest of her life.