Transcript Document

Development implications of the
financial and economic crisis
SNIS Academic Council Debate Series
Bern, 23.03.2009
Katja Hujo, Research Coordinator
www.unrisd.org
What is UNRISD?
• An autonomous United Nations agency
founded in 1963
• Engages in multidisciplinary research
on the social dimensions of
contemporary development issues
• Stimulates dialogue and contributes to
policy debates within and outside the
United Nations system
How is Research Organized?
• Cross-country and thematic papers
• Research coordinators based at
UNRISD or in universities
• 150–250 researchers at country level,
60% from developing countries
• Country-level research in 50–100
countries
How is Research Used?
• In global, regional, national and local
development debates
• By scholars, activists, government
officials, international organization
personnel, specialized and mass media,
and the general public
Research Programmes
1.
Social Policy & Development
2.
Democracy, Governance & Well-being
3.
Markets, Business & Regulation
4.
Civil Society & Social Movements
5.
Identities, Conflict & Cohesion
6.
Gender & Development
Social Policy and Development
The Multiple Roles of Social Policy
Production
human capital
stabilization
Reproduction
Protection
Redistribution
sharing care burden
market effects
equity and equality
gender-sensitive institutions life-cycle contingencies legitimation and social cohesion
Development Implications of the Global
Economic and Financial Crisis
• Transmission channels of crisis effects
on developing countries
• Possible consequences for social
development:
– Production, reproduction, protection,
redistribution
• Challenges for Social Policy:
– Financing
– Equity
– Social inclusion and democratization
Transmission Channels
• Foreign capital and domestic credit
– Net private capital flows estimated to half
in 2008 to US$ 467 billion and to US$165
billion in 2009 (IIF 2009)
• Trade and FDI
• Commodity prices
• Remittances
Importance of Aid
Trade
Commodity Prices
Remittances
Crisis effects on social development
• Production
–
–
–
–
–
Growth and employment 
Fiscal accounts: budget deficits 
Balance of Payments: Current account deficits 
Public debt  (risk spreads )
Financial sector (balance sheet effects, interest
rates , credit )
• Reproduction
– Gender effects: girls’ schooling and health,
maternal health, female employment in export
industries and public sector, access to micro-credit
– Care burden 
– Infant mortality 
Crisis effects on social development
• Redistribution
– Vertical: Income and assets
– Horizontal: between groups (gender, ethnicity and
race, migrants, sectoral and geographical)
• Protection
– Insecurity 
– Individual and market-based social protection
schemes insufficient
– Financing constraints for public schemes
Growth
Fiscal Accounts
Challenges for Social Policy
• Market-based social insurance schemes highly
affected by crisis (example: private pension funds
and savings’ accounts)
• Social protection activities at individual, household or
community level adversely affected by systemic crisis
(risk pooling, remittances etc.), although likely to bear
burden of failed markets and strained public schemes
• Universal tax- and contribution- financed schemes
best suited in case of systemic crisis (countercyclical, broadest possible pooling)
• Expansion of social assistance and emergency
programmes recommended
Challenges for Social Policy
• Financing:
– Respond to higher need with less money
(spending priorities, efficiency etc.)!
– No short-term response: expand domestic
financing instruments like taxation and social
insurance contributions
– External financing instrumens (aid, natural
resource rents, remittances) more volatile, more
difficult to influence through national policy, less
synergies for economy and state-citizenship
relations
Challenges for Social Policy
• Equity
– Multiple redistributive effects of crisis
makes it difficult to identify winners and
losers
– Progressive financing and spending
important; good to invest in social
infrastructure (gender, vulnerable groups)
– Likely move towards targeting,although
costly and not inclusive
Challenges for Social Policy
• Social Inclusion and Democratization
– « Benefit of Crisis » revisited:
• Prospects for new development paradigm, new
social contract based on solidaristic and
democratic values?
• Or increased social conflict, inequality,
informalization and poverty with erosion of
rights?
Thank you !
• Graphs taken from:
– World Bank 2009: Swimming against the
tide: How developing countries are coping
with the global crisis
– IMF 2009: The Implications of the Global
Financial Crisis for Low-Income Countries