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The global crisis and aid effectiveness

Trade union participants highlighted their decade-long struggles to change the neo-liberal economic policies that were at the root of the crisis. Coupled with inadequate global governance, these policies had resulted in fundamental economic imbalances ; and the crisis was brought to a head by reckless financial speculation. The widespread increase in inequality over the past two decades was not only socially unjust, it was at the core of the macroeconomic imbalances that sparked the crisis. Deregulated financial markets and financial innovation did not lead to more efficient economies, but simply increased the risks. It has become clear that the activities of some financial players amounted to criminal behaviour, and those concerned should be brought to justice.

The economic and human cost of multiple crises

Trade unions wished to highlight the stark reality of the disastrous consequences for workers in the north and the south, as a result of a financial crisis they had no stake in. In fact there were multiple, on-going crises in finance, fuel and food. The brunt of these crises were being borne by the most vulnerable and poorest people, with negative consequences for the livelihoods and well-being of households, women and children. In many developing countries, the crisis has meant a rise in precarious employment and working poverty, and any progress that has been achieved in reducing informality is threatened by millions of job losses in the formal sector. The surge in rural, precarious and informal employment will mean a setback in putting decent work at the heart of sustainable development.

The global economic crisis is a threat to eradicating poverty. It is a threat to continued, sustainable development. It is a threat to social justice for workers everywhere. The magnitude of the global economic crisis can be measured by falling income levels, reduced access to health services and education and inadequate social safety nets for many in the developing countries. There has been an erosion of people’s savings, a lower purchasing power as a result of the food crisis and a fall in remittances by more than 7 percent1.
The latest global employment trends from the ILO predict a continuation of high unemployment rates despite an increase in global economic growth, and in the emerging and developing countries, employment levels will not recover substantially before 20111.

The crisis has severely undermined progress made in attaining the Millennium Development Goals (MDGs), as well as nationally agreed development objectives, especially in low income countries ; Sub-Saharan Africa is projected to fall short of reaching the MDG target 1.A2. As a result of the crisis, between 47 and 84 million more people are estimated to remain poor or to have fallen into extreme poverty3. And in total, currently about 28 percent (or about 1.4 billion people) of the world’s population live on less than US$ 1.25 per person per day4. Among the most severely affected are the rural and urban poor, landless farmers, female-headed households, women workers, children, and those recently made unemployed.

Differing impacts of the crisis for women and men are beginning to be evident. Whereas the manufacturing sector was the first to be affected and men took the first hit in terms of lay-offs, the evidence suggests that the manufacturing sector is stabilizing, and that women are now gradually swelling the ranks of the unemployed, and of employees of the informal economy. Studies have shown that gender-based and domestic violence increase in times of crisis, predominantly affecting women and girls.

Despite talk of ―green shoots‖, the global economy’s recovery is at best fragile, and a further recession is entirely possible. What growth has occurred is unevenly distributed among developing and emerging countries and dependent on the pace of international trade and on the stability of capital flows. A few emerging market economies that had built up their own reserves have been able to cushion themselves from the worst effects of the crisis. This is the case for China, India and Brazil, while countries that were heavily dependent on external financing, (CEE and Russia), remain in deep recession.

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Les opinions exprimées et les arguments avancés dans cet article demeurent l'entière responsabilité de l'auteur-e et ne reflètent pas nécessairement ceux du CETRI.

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