Transcript IDS Research on the Financial Crisis

IDS Research on the Financial Crisis
UNICEF
16 July 2009
The In Focus Policy Briefings
www.ids.ac.uk/go/infocus7
1. Summary
2. Evidence from previous
crises
3. Qualitative Impact in 5
countries
4. Social Protection
Responses
5. Fiscal space
6. China and LICs
7. Global trade
8. Trade Credit
9. Narratives
10. A New Development
Paradigm
The Short Research Projects
Trade Credit
Global Trade and Prices
China’s impact on developing countries
Narratives about the Crisis
Rapid Qualitative Assessment of impact in
5 countries
Trade Credit is not a problem for
everyone
The Surprise
Interviewed established
garments and horticulture
firms in SSA
None of the firms
interviewed has had
problems with trade credit
But big problems for some
firms in Central America
And perhaps for smaller,
newer or less well
established firms
The Real Problems
Exchange rate changes
but for exporters to the UK
 Sterling devaluation reduces
income
 Local costs increase as
currencies appreciate
 Many inputs prices in dollars
Falling demand
 Slow renewals of orders for
garment companies
 Falls in demand for flowers
 Food not so badly affected
Not everyone loses from an
OECD recession
Scenario: 5% Decline in GDP of OECD Countries
5
No indication that Chinese
strategic investments in
Africa will decline
Demand for some inputs from China (e.g cobalt) has
collapsed, leading to halting of production and loss of
jobs e.g. in DRC
Chinese state companies are pushing ahead with
strategic energy sector investments and infrastructure
projects, for example, stakes in Rio Tinto and OZ
Minerals Ltd.
Private companies such as the Shenzhen based
company Huawei Technology are continuing to expand
in technology areas in Africa.
During early 2009 visits of government leaders to Africa,
China has committed to further aid and development
cooperation
The Food Crisis is far from over
• Effects of food and fuel price hikes
still being felt
• Food prices still higher than 2007
• Not dropping everywhere
• Uncertainty in agricultural markets
• Export sector job losses in Jakarta
- but not in Dhaka
• Diversification and adaptation
• Micro- and informal credit markets
hit
How might Development be
different
Context sensitivity - or throwing the
baby out with the bathwater?
A new era for global economic
governance?
A new opportunity to protect the poor
…and the planet