THE MULTIPLIER EFECT OF GLOBAL CRISES

The economic crisis came in the wake of the food and fuel crises of 2008, which had already stretched people’s reserves and undermined their resilience. Local crises – for example, drought in Kenya and Jamaica, flooding in Bangladesh and Indonesia and heavy rains in Zambia – added to this ‘perfect storm’. This multiplier effect has increased the pressures on the world’s most vulnerable people. The signs are troubling.

The economic crisis is predicted to substantially slow down global efforts to eradicate poverty. Hardwon ground is being lost. All estimates point to the fact that progress on the Millennium Development Goal target of reducing by half the proportion of people living on less than one dollar a day has been slowed or halted by the global economic crisis. For many countries, this new reality might mean failing to achieve their poverty reduction targets. According to World Bank data, it is projected that in 2009 about 100 million more people will be trapped in extreme poverty – living on less than $1.25 a day – than was anticipated before the onset of the crisis, which means that in 2009 the number of people in extreme poverty will still be more than 1.3 billion; that number was expected to be reduced to 1.2 billion.14

The cumulative effects of recent global crises have already resulted in a sharp increase in hunger around the world. For the first time, more than one billion people are victims of hunger. In the last year alone, this number increased by 100 million people.15 Lower incomes due to the economic crisis and persistently high food prices have proven to be a devastating combination for the world’s most vulnerable populations.

The data available is still scarce, but case studies and testimonies point to negative trends on all dimensions of health – status of health, the utilization of health services and health expenditures. Malnutrition, especially micronutrient deficiencies, could increase as more households are forced to switch to less nutritious foods. We know that people who do not consume the right amount of nutrients become more prone to health problems, learn less and suffer from lower productivity. Even a few months of inadequate food and nutrition can condemn a child for life. It is estimated that higher food prices in 2008 have already increased the number of children suffering permanent cognitive and physical injury due to malnutrition by 44 million.16

The crisis could equally result in the world losing a new generation. The World Bank predicts that between 200,000 and 400,000 more babies could die each year between now and 2015 if the crisis persists.17 Past studies suggest that girl infants are much more likely to die from the effects of the global economic crisis: a 1 percent decrease in GDP growth is expected to increase the number of girl infant deaths by 7.4 compared with 1.5 boys per 1,000 births.18

The economic crisis also seems to be taking a toll on the psychological health of many vulnerable and poor households. Household surveys and interviews suggest that depression and drug and alcohol abuse could be on the rise. Focus groups in several countries told of the consumption of strong local brews to, as one respondent said, "kill the stress."19 Similarly, many people interviewed reported rises in domestic violence. In several higher-income countries, past crises show a close association between economic hardship and suicide.

Early indications show that households are having to cut back on health spending. People are reporting that they are switching from private to public health care services or are avoiding going to the doctor altogether. While there is no conclusive evidence from past crises on whether life-saving interventions decrease in times of an economic downturn, case studies have pointed to increases in adult mortality. This issue needs to be carefully watched.

As government’s fiscal space is squeezed, there is evidence that budgets – based on previous economic projections – will need to be revised downwards. Social expenditures are coming under pressure. The case of HIV/AIDS is instructive. Several countries in sub-Saharan Africa have announced cuts to their annual HIV/AIDS budgets. The Global Fund to Fight Aids, Tuberculosis and Malaria warns that funding for health programmes should not be compromised as a result of the economic crisis. In order to ensure that progress is not put at risk, the Global Fund is indeed calling on donors to increase their contributions. Even short-term interruptions of drug treatment can have dramatic effects on health, survival rates and increased risks of transmission.

The global economic crisis is expected to have a detrimental impact on education achievements in many countries. Country case studies already indicate negative trends: vulnerable households report difficulties in meeting school costs; children are being moved to cheaper institutions or to schools that provide food or material support. Time and time again, parents who were interviewed emphasized that they were trying to keep their children in school, which they saw as a key to a better future. How many of them will succeed is in doubt: there are a growing number of reports of increased absenteeism, school drop-outs and increases in child labour.

There is some evidence that the cumulative impact of the recent global crises has fanned the flames of social unrest. Regions that are particularly vulnerable to tensions and political instability are reporting increased social tensions within communities. Protest activities, including strikes by government employees, labour sit-ins by industrial workers and demonstrations by the general public, have been reported in the past year throughout the world.