Global crisis hits most vulnerable

This new analysis, which was prepared by the Education for All Global Monitoring Report (GMR) team, was presented at the first session of the UNESCO Future Forum, devoted to the impact of the financial and economic crisis on multilateralism and UNESCO. The authors document the potential impact of the economic downturn on internationally agreed human development targets. They estimate that reduced growth in 2009 will cost the 390 million people in sub-Saharan Africa living in extreme poverty $18bn, or $46 per person. The projected loss represents 20 per cent of the per capita income of Africa’s poor – a figure that dwarfs the losses sustained in the developed world.

“These numbers will bring the regions limited progress in poverty reduction to a shuddering halt,” warns Kevin Watkins, Director of the GMR.

The findings also highlight wider human development impacts, including the prospect of an increase of between 200,000 and 400,000 in infant mortality. Child malnutrition, already rising, will be one of the main drivers of higher child death rates. “Millions of children face the prospect of long-term irreversible cognitive damage as a result of the financial crisis,” commented Patrick Montjourides, one of the authors.

Weak fiscal capacity will limit the scope for the world’s poorest countries to insulate their citizens from the crisis. Using a new indicator for fiscal capacity that takes into account budget deficits, government debt-to-GDP ratios, revenue-to-GDP and aid-to-GDP, the analysis estimates that 43 out of 48 low-income countries lack the capacity to provide a pro-poor fiscal stimulus.

Fiscal constraints are especially marked in many of the countries furthest from the internationally agreed human development goals. In an assessment of 43 countries categorised by the World Bank as facing extreme vulnerability, 27 of those most distant from the goal of universal primary education lack fiscal space. There is a real danger that these countries, many of which have been making progress towards universal primary education, will now suffer setbacks. The at-risk group includes Mozambique, Ethiopia, Mali, Senegal, Rwanda and Bangladesh

Increased aid could help to reduce fiscal pressure, but aid development assistance budgets are coming under increased pressure. The analysis estimates that the EU’s aid commitment to provide 0.56 per cent of GDP in aid by 2010 is discounting rapidly with lower growth projections. The real financial value of the commitment in 2010 will be $4.6bn lower according to the authors.

“Aid donors could clearly do far more to protect the world’s poorest people from a crisis manufactured by the world’s richest financiers and regulatory failure in rich countries,” commented Kevin Watkins. He contrasted the estimated $7bn needed in increased aid for low income countries to meet key education goals, with the $380bn in public money injected into banking systems in last quarter of 2009.

“We cannot allow rich countries to use this crisis as an excuse to turn their back on the world’s poor,” said UNESCO Director-General Koïchiro Matsuura. “Measures to revive growth and fix the financial system must be coupled with greater efforts to tackle the structural problems of extreme poverty and inequality.”

The authors call for a concerted international effort to limit the impact of the financial crisis on the poor. Measures called for include an increase of over $500bn in IMF special drawing rights, along with governance reforms to give developing countries and increased voice. They also call for the EU to provide a $4.6bn aid adjustment premium. They argue that increased aid should be directed towards social protection programmes and safety nets for the vulnerable populations.


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- Contact information : Caroline Descombris, c.descombris@unesco.org, +33 (0)1 45 68 16 24