Facts and Figures
- The International Monetary Fund is projecting that global growth in 2009 will fall by 0.5 per cent.
- The International Labor Organization is projecting that over 50 million more people could become unemployed in 2009. The ranks of the working poor — people working and living on less than US$2 a day — could also swell by well over 200 million.
- The Mine Workers Union of Zambia estimates that 10,000 out of a total of 23,000 registered miners will be laid off.
- In the peri-urban community of Gandasari in Jakarta, Indonesia, an estimated 10 per cent of permanent workers and 40 per cent of contract workers have already lost their jobs.
- Two hundred thousand Indonesian nationals previously working in Malaysia returned home in 2008 as a result of the recession there, with most of them women from the country’s rural areas.
- In China, well over 20 million domestic migrant workers are reported to have been laid off in early 2009.
- In Ghana, the Ministry of Finance estimates that remittances were down by over US$50 million in January 2009.
As the global recession continues to unfold, the financial and economic crisis’ impact on the poorest is becoming visible. While there is some talk of green shoots here and there, the impact on many developing countries is only now starting to emerge. And the consequences of taking a child out of school or using less nutritious food – because of the loss of jobs and income – will continue to take a serious toll long after economic recovery finally begins. It is critical, therefore, for the international community to begin to examine and respond to the potential human development implications of the crisis. A slide backwards may be unavoidable unless meaningful and decisive action is taken now.
Poor and low income families are clearly struggling. Already the World Bank is reporting that as many as 55 to 90 million more people could be pushed into extreme poverty as a result of the crisis in addition to the estimated 160 to 200 million people who fell into poverty from rising food prices between 2005 and 2008.
Women and children are particularly vulnerable. The impact of the crisis will entail more than current hardship: there may also be long-term implications for education, health and employment and growth prospects. As their incomes dwindle, the poor may be unable to afford nutritious food, healthcare and school for their children. Meanwhile, government budgets are likely to shrink, especially as tax revenues, exports, foreign investment and other sources of revenue threaten to evaporate. This will happen just as the need for increased public spending on vital public services becomes more crucial.
Beyond loss of income
The outcomes could be nothing less than devastating, especially for the most vulnerable. A decrease in a developing country’s GDP can translate into a serious deterioration in the health of its children as clean water, nutritious food and pre- and post-natal health care become harder to access. Child malnutrition may become more prevalent and children could begin dropping out of school. Already reports coming in from Zambia, Bangladesh and Kenya indicate that hunger is beginning to deter children from attending school, especially when faced with traveling long distances.
Parents are also taking children out of school so they can enter the labour force. UNDP is seeing this in Pakistan with as many as half of the country’s children currently at work, beginning with the food crisis in 2008. Meanwhile, children, girls and young women face an increased risk of human trafficking and sex work as a result of food and job scarcity. Girls and young women in some communities in Kenya and Zambia, for example, are increasingly turning to sex work out of economic desperation while teachers in Nairobi reported an increase in student pregnancies as girls exchange sex for food.
Passing poverty to future generations
When children grow up lacking education and suffering from the effects of malnutrition, they face irreversible physical and cognitive consequences for their development. Transient poverty can have consequences over the long run. This, in turn, affects a country’s long-term human and economic development prospects, meaning that the losses of today can translate into losses for generations to come. However, immediate interventions to improve child nutrition outcomes could result in productivity gains of lifetime earnings for the individual.
The time is now for all partners in human development to live up to their commitments to the poorest and most vulnerable. Aid, free trade and adequate policies need to ensure that the global crisis of today does not hamper the development prospects of tomorrow.
UNDP is supporting developing countries by:
- Designing social protection programmes and safety nets.
- Creating jobs through investment in labour-intensive infrastructure.
- Increasing the income and productivity of small farmers.
- Improving the monitoring of human development impacts of the crisis.
- Ensuring the continued financing of essential services like access to health and education.
- Strengthening institutional capacity to manage official development assistance.
- Advising on fiscal strategies and counter-cyclical policies
- Mobilizing additional resources
- Addressing the food crisis