Transcript The Global Economic Crisis, public budgets and child

The global economic crisis, public budgets and childsensitive social protection in Sub-Saharan Africa
Andy Sumner
[email protected]
Contents
1. The crisis so far
2. The crisis in SSA so far and public budgets
3. Policy responses, social protection, and policy narratives
looking ahead
4. Conclusions
1. The crisis so far
• What’s different?
 Crisis origins in the industrialized countries; speed of global
transmission; the size of the shock; compound nature (following
fuel and food shocks) and long run impacts for children.
• What happened and what didn’t?
 Growth slowdown but few outright recessions; falls in exports;
FDI; remittances but very variable; aid budgets under pressure
but no large fall (yet?)
• A new opportunity to promote social protection (SP)?
 SP in East Asia a result of last crisis; strong evidence that SP is a
cost-effective use of public budgets; many pilots in SSA and new
resources - VFF, RSRP but will future fiscal concerns squeeze SP?
• What does this all mean for child poverty?
Child poverty estimates of the current crisis
Countries, people, US$ or child mortality:
– 43 or 33 countries;
– 46, 53, 90, 108 million new poor;
– US$46 per poor African;
– 200-400,000 more infant deaths.
•
Depends on growth/poverty assumptions (remember debates
on poverty elasticities?) and whose growth estimates (IMF;
World Bank; UN-DESA and revisions);
How does a crisis transmit to child poverty?
Global macro-shocks and responses
Trade
Capital
National economy impacts and responses
Growth
Jobs
Budgets
Asset values
Prices
Household impacts and responses
Income falls
Dietary
changes
School dropouts
Health
impacts
Asset sales
Consumption poverty - MDG 1 - National poverty headcount (% of
popn) before/after selected economic crises
60
50
40
30
20
10
0
Malaysia (Sept. 1997)
South Korea (Oct. 1997)
Indonesia (July 1997)
Russia (August 1998)
Mexico (Dec. 1994)
Argentina (Dec. 2001)
Child nutrition - MDG 1 - Low birth weight (as % of all births)
before/after selected economic crises
16
14
12
10
8
6
4
2
0
Mexico (Dec. 1994)
Thailand (July 1997) Brazil (January 1999) Argentina (Dec. 2001) Indonesia (July 1997) Malaysia (Sept. 1997)
Source: World
Development
Indicators (Dec. 2008).
100
Child education - MDG 2 - Primary school completion rates (% of cohort)
before/after selected economic crises
98
96
94
92
90
88
Mexico (Dec. 1994)
Indonesia (July 1997)
Malaysia (Sept. 1997)
South Korea (Oct. 1997)
Russia (August 1998)
Child poverty impacts of previous crisis
• MDG 1a Consumption poverty
– unambiguous increases
• MDG 1b and 2 Child nutrition/health/schooling
– Generally worsen but not always – policy can prevent this.
• Impacts and equity
– Unequal impacts for children and by gender (HH coping mechanisms);
• Other…
– Strong evidence of psychological distress and mental health problems
(Das, 2008); elevated levels of community and intra-household conflict
during and post-crisis (Friedman and Thomas, 2007; World Bank, 2008a);
• But….
– Evidence is generally from middle income Asia and Latin America; current
crisis is different – compound nature after food/fuel shocks; More thinking
on long-run capabilities and inter-generational aspects?
Evidence on child poverty impacts of the current crisis
• Hossain et al., (2009) study in 5 countries:
 Food: higher proportion of income; less diverse/lower nutritional
value, less, women eating least/last; Range of health impacts
reported; School absenteeism and dropout, child labour; Intrahousehold tensions, abandonment of children and elderly and signs
of rising social tension; Criminalisation of youth and rising crime.
• People’s own crisis indicators? How about children’s?
 Changes in prices, reduction in the amount of paid workers; number
of vacant dormitories rented for export workers, reduced working
hours, termination/broken contracts, lay-offs, returning migration.
2. The crisis in SSA and public budgets
Surely low income, subsistence and/or agricultural
economies aren’t linked to complex global financial
markets?

% banking sector assets held by foreign banks: > 50% = e.g.
Mozambique (100%), Uganda (80%), Zambia (77%), Tanzania
(66%) Ghana (65%).

Remittances as % GDP: > 2% = e.g. Sierra Leone (9%), Kenya
(7%), Nigeria (6%), Uganda (4%); Ethiopia (2%).

Primary commodities as % exports: >80% = e.g. Ethiopia,
Ghana, Kenya, Malawi Mozambique, Nigeria, Rwanda, Sierra
Leone, Sudan,Tanzania, Uganda, Zambia.

Many countries have multiple economic vulnerabilities
Data so far on SSA and outlook
• Export earnings have not fallen radically but haven’t grown at
pre-crisis rates (exception is oil exporters have big falls)
• Large falls in FDI and remittances in many countries but not all;
• Significant deceleration in GDP per capita growth rates;
• Pressure on public expenditure in some countries immediately,
and most in next 2 years. Most striking trend is debt servicing
upward trend - large annual increases in debt servicing;
14
Real GDP per capita growth (%)
12
10
8
2008
2009
6
2010
4
2
0
Ethiopia
-2
Kenya
Malawi
Nigeria
Sudan
Ghana
Mozambique
Uganda
Tanzania
Zambia
60
Public spending as a % of GDP
50
40
2007
2008
30
2009
2010
20
10
0
Ethiopia
Kenya
Malawi
Nigeria
Sudan
Ghana
Mozambique
Uganda
Tanzania
Zambia
500
Debt service in US$m
450
400
350
2007
300
2008
250
2009
200
2010
150
100
50
0
Ethiopia
Kenya
Malawi
Sudan
Ghana
Mozambique
Uganda
Tanzania
Zambia
3. Policy responses, social protection, and policy
narratives looking ahead
• Context
 Some expansionary fiscal policy e.g. Zambia; Tanzania;
Mozambique; but exception – generally fiscal tightening and
likely to continue; (aid under pressure too).
• Policy narratives
 Shifting ‘conventional wisdom’ on public expenditure towards
social protection and ‘graduation’; plenty of evidence that SP
reduces child poverty; more pilots emerging in SSA; more
resources, more donor support, more domestic support?
• Looking ahead
 Taking human development to the next dimension(s) - what
might ‘human wellbeing’ offer SP?
From human development to ‘human wellbeing’?
What a child has;
What a child can do with
what they have;
How a child thinks about
what they have and can do.
Material wellbeing
i.e. MDGs and UNCRC child
survival; child development
Relational wellbeing
i.e. UNCRC - child
protection; participation
and Innocenti Scorecard
peer/family relationships,
behaviours/risks
Subjective wellbeing
i.e. UNICEF Innocenti score
card – SWB of health,
personal and schooling
‘Human wellbeing’ and the causes of child poverty
The case of the
IGT of child
malnutrition
Material Dimensions of Relational Dimensions Subjective Dimensions
Wellbeing – standard
of Wellbeing – personal of Wellbeing – values,
of living
and social relations
perceptions,
experiences
What is
transmitted?
Under-nutrition as
measured by agespecific height and
weight
Physiological
mechanisms, via
growth in the
womb;
Lack of information
on what a healthy
baby looks like
How is it
transmitted?
What determines
transmission?
Rules about who
deserves the most
and best food in
the household
Differential wages
for males and
females, dowry
and property IGT
Lack of agency of
women to
negotiate child
care.
Eating down in
pregnancy
(avoiding too much
weight gain)
Lack of external
norms about
healthy child size
Inability or
unwillingness to
interact with more
diverse group of
people, ideas;
‘Human wellbeing’ and policy responses
Types of policy
responses
Material Dimensions of Relational Dimensions Subjective Dimensions
Wellbeing – standard of of Wellbeing – personal of Wellbeing – values,
living
and social relations
perceptions,
experiences
Capabilities
Interventions
Asset transfer
schemes; credit
and savings
schemes (e.g. MDG
1)
Human and skills
development
schemes;
Empowerment
programmes (e.g.
MDG 2).
The social and
cultural dimensions
of education
programmes (e.g.
MDGs 2, 3, 5, 6).
Conditions
Interventions
Land reform;
The regulation of
markets (e.g.
monopoly
regulation)
Legal Reform;
Rights-based
approaches;
Governance
Reforms.
Societal campaigns
for social and
cultural reform
(e.g. dowry
campaign)
How might ‘human wellbeing’ help with SP?
Type of SP
Instruments (Davies and McGregor, 2009).
Protective
(social
assistance)
Social transfers; disability benefit; pension schemes; social
services
Preventive
(Insurance and
diversification)
Social transfers; funeral societies; livelihoods diversification;
social insurance; savings clubs;
Promotive
(economic
opportunities)
Social transfers; school feeding; starter packs; public works
programmes; access to credit; asset transfers; access to
common property resources
Transformative
(addressing
underlying social
vulnerabilities)
Land reform; the regulation of markets (e.g. monopoly
regulation); legal Reform; Rights-based approaches; governance
Reforms; societal campaigns for social/cultural reform (e.g.
dowries); promotion of minority rights
How might ‘human wellbeing’ help with SP?
Type of SP
Material Dimensions of
Wellbeing – standard of
living
Relational Dimensions Subjective Dimensions
of Wellbeing – personal of Wellbeing – values,
and social relations
perceptions,
experiences
Protective (social
assistance)
Social transfers; disability
benefit; pension schemes;
social services
Preventive
(Insurance and
diversification)
Social transfers;
- funeral societies
livelihoods diversification; social insurance;
savings clubs;
Promotive
(economic
opportunities)
Social transfers; school
feeding; starter packs;
public works programmes
Transformative
(addressing
underlying social
vulnerabilities)
Land reform;
The regulation of markets
(e.g. monopoly regulation)
access to credit; asset
transfers; access to
common property
resources
Legal Reform;
Rights-based
approaches;
Governance Reforms.
Societal campaigns for
social/cultural reform
(e.g. dowries); promotion of minority rights
4. Conclusions
• Poverty impacts of previous crises significant for child poverty;
Early evidence for current crisis supports this;
• SSA connected to crisis but highly nuanced impacts - some
countries very badly hit others less so;
• Fiscal/aid landscape shifting; thinking about a new policy
narrative - from human development to ‘human wellbeing’ implications for child poverty analysis, inter-generational
transmission, policy responses and child-sensitive SP?