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The human crisis

Shanta Devarajan's picture

My colleague Justin Lin says that it is important not to let the global financial crisis become “a human crisis.” Nowhere is this truer than in Africa. Although spared the first-round effects of banking failures, Africa is already facing the second-round impacts of declining capital flows, slowing remittances, stagnating foreign aid and falling commodity prices and export revenues. The continent will almost surely experience a deceleration in growth. And if history is a guide, this deceleration will have an impact on human development.

In an exhaustive study of growth accelerations and decelerations, Jorge Arbache and John Page (my colleague and predecessor, respectively) show that the impact on human development is asymmetric. Child mortality, for instance, rises during decelerations, but hardly falls during accelerations. Primary school completion rates are substantially lower in countries experiencing growth decelerations, as is life expectancy. Disturbingly, they also find that official development assistance (either per capita or as a share of GDP) is lower during decelerations, meaning that it is pro-cyclical.

Comments

Submitted by Xiao Ye on
A colleague sent me this link. I was truly shocked by the human sufferings linked to sweet chocolate that I adore. I don’t think giving up chocolate consumption would be a solution. Any comments and/or recommendations? http://iblog.worldbank.org/blog/fieldnotes/entry/hot_chocolate1

This blog is full of information. Thanks very much for sharing. Keep up the good work and help save Africa.

Shanta, I can't seem to get the link to the Arbache/Page paper to work. Is there another link? I found a few related papers by the duo and wanted to make sure I knew which one you were referring to in this posting. Karen http://karengrepin.blogspot.com/

Besides the facts mentioned in the excellent article above, we can also see increases in other social problems such as theft, burglary, kidnapping, suicide and murdered. There is an intimate, logical and justified link between the increase in social problems and a financial crisis, that reduces investment, given the drop in demand and consequently the increase of unemployment, which brings the increase of social problems. Great article with relevant data!

Submitted by Dooner on
Hello Shanta, Are you speaking about some kind of depression that the people can experience? Indeed, this may happen. But I think that this will teach people for a new treat to themselves, their country and to finance that they need to manage more carefully. The time of great crises and depressions, sooner or later will lead to great achievements.

What started as a global financial crisis and became the economic crisis has now is becoming a serious unemployment problems, and if we do not take action, there is a risk of global human and social crisis, with important political consequences.

These are difficult days and crisis sometimes crowds out common sense. But let’s do what we can to make sure that the global financial crisis doesn’t give birth to a more tragic human crisis. ---- http://bgsportal.blogspot.com

Submitted by sam99 on
Numerous international organizations have warned of the trafficking consequences of the ongoing global financial crisis. In its January 2009 global employment report, the ILO said the economic crisis is causing dramatic increases in the numbers of unemployed, working poor, and those in vulnerable employment. If the crisis continues, more than 200 million workers, mostly in developing economies, could be pushed into extreme poverty, according to the report. Regards

Submitted by David Shawn on
I agree here that primary school completion rates are substantially lower in countries experiencing growth decelerations, as is life expectancy. Disturbingly, they also find that official development assistance (either per capita or as a share of GDP) is lower during decelerations, meaning that it is pro-cyclical.

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