Of the six billion people sharing our planet, almost half live under the poverty line of $US2 per day. Though growth predictions vary it is likely that, by 2020, the population will increase by approximately another 1.2 billion, of which some 95% will live in developing countries. Such figures highlight the need to address the issues surrounding global poverty as a priority.
As part of the Economic and Social Research Council’s (ESRC) Global Financial Crisis lecture series, the second of three seminars looking at various aspects of the recession will focus on ‘Recession and Global Poverty’.
“How will the global financial crisis impact the extremely poor and extreme poverty?” asks Dr Peter Boone, of the ESRC’s Centre for Economic Performance. “Subsistence living and lack of accumulated wealth mean many of the extremely poor are well-insulated from the current crisis. However, the problems are in the future: reduced public finances, less global growth, less foreign aid, and possibly more civil wars, will mean the extremely poor do not get the health services, education and opportunities needed to pull themselves and their children out of poverty. This doesn’t have to be the case: despite all these problems, we have the knowledge and capacity to make large inroads towards ending extreme poverty.” Dr Boone will outline steps that the international community can take to ensure that we can lessen the impact of the crisis for the most vulnerable.
Professor of Economics, Tony Venables, of the University of Oxford, will discuss the impacts of the recession on developing countries, focusing his presentation on Africa. Africa has had strong economic growth for nearly a decade, but the latest forecasts have growth in 2009-10 dropping to around 3%, barely more than population increase. As a consequence tens of millions more people will remain in poverty and attainment of the MDGs made less likely. “Different economies are affected through quite different transmission mechanisms; drying up of capital flows; reduced export prospects; lower remittances; and lower commodity prices which affect some economies positively and others negatively.” explained Professor Venables. “The key question for the future is whether the recession is a one-off reduction in income and increase in poverty, or whether it will also reduce Africa’s growth prospects over coming decades, returning it the stagnation of the 1980s and 90s.”
Considering how the global financial crisis will exacerbate poverty for the most vulnerable households in developing countries will be Dr J Allister McGregor, Leader of the Vulnerability and Poverty Reduction Team at the Institute of Development Studies at the University of Sussex. Dr McGregor will also outline the potential outcomes of a failure by the global community to respond to the possible negative impacts of crisis on developing countries.