The global economic crisis, public budgets and child- sensitive social protection in Sub-Saharan Africa Andy Sumner [email protected].

The global economic crisis, public budgets and child-sensitive social protection in Sub-Saharan Africa

Andy [email protected]

Contents

1. The crisis so far

2. The crisis in SSA so far and public budgets

3. Policy responses, social protection, and policy narratives looking ahead

4. Conclusions

1. The crisis so far

• What’s different? Crisis origins in the industrialized countries; speed of global

transmission; the size of the shock; compound nature (following fuel and food shocks) and long run impacts for children.

• What happened and what didn’t? Growth slowdown but few outright recessions; falls in exports;

FDI; remittances but very variable; aid budgets under pressure but no large fall (yet?)

• A new opportunity to promote social protection (SP)? SP in East Asia a result of last crisis; strong evidence that SP is a

cost-effective use of public budgets; many pilots in SSA and new resources - VFF, RSRP but will future fiscal concerns squeeze SP?

• What does this all mean for child poverty?

Child poverty estimates of the current crisis

Countries, people, US$ or child mortality:– 43 or 33 countries; – 46, 53, 90, 108 million new poor; – US$46 per poor African; – 200-400,000 more infant deaths.

• Depends on growth/poverty assumptions (remember debates on poverty elasticities?) and whose growth estimates (IMF; World Bank; UN-DESA and revisions);

How does a crisis transmit to child poverty?

Child poverty impacts of previous crisis

• MDG 1a Consumption poverty– unambiguous increases

• MDG 1b and 2 Child nutrition/health/schooling– Generally worsen but not always – policy can prevent this.

• Impacts and equity– Unequal impacts for children and by gender (HH coping mechanisms);

• Other…– Strong evidence of psychological distress and mental health problems

(Das, 2008); elevated levels of community and intra-household conflict during and post-crisis (Friedman and Thomas, 2007; World Bank, 2008a);

• But…. – Evidence is generally from middle income Asia and Latin America; current

crisis is different – compound nature after food/fuel shocks; More thinking on long-run capabilities and inter-generational aspects?

Evidence on child poverty impacts of the current crisis

• Hossain et al., (2009) study in 5 countries: Food: higher proportion of income; less diverse/lower nutritional

value, less, women eating least/last; Range of health impacts reported; School absenteeism and dropout, child labour; Intra-household tensions, abandonment of children and elderly and signs of rising social tension; Criminalisation of youth and rising crime.

• People’s own crisis indicators? How about children’s? Changes in prices, reduction in the amount of paid workers; number

of vacant dormitories rented for export workers, reduced working hours, termination/broken contracts, lay-offs, returning migration.

2. The crisis in SSA and public budgets

Surely low income, subsistence and/or agricultural economies aren’t linked to complex global financial markets?

% banking sector assets held by foreign banks: > 50% = e.g. Mozambique (100%), Uganda (80%), Zambia (77%), Tanzania (66%) Ghana (65%).

Remittances as % GDP: > 2% = e.g. Sierra Leone (9%), Kenya (7%), Nigeria (6%), Uganda (4%); Ethiopia (2%).

Primary commodities as % exports: >80% = e.g. Ethiopia, Ghana, Kenya, Malawi Mozambique, Nigeria, Rwanda, Sierra Leone, Sudan,Tanzania, Uganda, Zambia.

Many countries have multiple economic vulnerabilities

Data so far on SSA and outlook

• Export earnings have not fallen radically but haven’t grown at pre-crisis rates (exception is oil exporters have big falls)

• Large falls in FDI and remittances in many countries but not all;

• Significant deceleration in GDP per capita growth rates;

• Pressure on public expenditure in some countries immediately, and most in next 2 years. Most striking trend is debt servicing upward trend - large annual increases in debt servicing;

3. Policy responses, social protection, and policy narratives looking ahead• Context

Some expansionary fiscal policy e.g. Zambia; Tanzania; Mozambique; but exception – generally fiscal tightening and likely to continue; (aid under pressure too).

• Policy narratives Shifting ‘conventional wisdom’ on public expenditure towards

social protection and ‘graduation’; plenty of evidence that SP reduces child poverty; more pilots emerging in SSA; more resources, more donor support, more domestic support?

• Looking ahead Taking human development to the next dimension(s) - what

might ‘human wellbeing’ offer SP?

From human development to ‘human wellbeing’?What a child has;

What a child can do with what they have;

How a child thinks about what they have and can do.

‘Human wellbeing’ and the causes of child poverty

The case of the IGT of child malnutrition

Material Dimensions of Wellbeing – standard of living

Relational Dimensions of Wellbeing – personal and social relations

Subjective Dimensions of Wellbeing – values, perceptions, experiences

What is transmitted?

Under-nutrition as measured by age-specific height and weight

Rules about who deserves the most and best food in the household

Eating down in pregnancy (avoiding too much weight gain)

How is it transmitted?

Physiological mechanisms, via growth in the womb;

Differential wages for males and females, dowry and property IGT

Lack of external norms about healthy child size

What determines transmission?

Lack of information on what a healthy baby looks like

Lack of agency of women to negotiate child care.

Inability or unwillingness to interact with more diverse group of people, ideas;

‘Human wellbeing’ and policy responses

Types of policy responses

Material Dimensions of Wellbeing – standard of living

Relational Dimensions of Wellbeing – personal and social relations

Subjective Dimensions of Wellbeing – values, perceptions, experiences

Capabilities Interventions

Asset transfer schemes; credit and savings schemes (e.g. MDG 1)

Human and skills development schemes; Empowerment programmes (e.g. MDG 2).

The social and cultural dimensions of education programmes (e.g. MDGs 2, 3, 5, 6).

Conditions Interventions

Land reform;The regulation of markets (e.g. monopoly regulation)

Legal Reform;Rights-based approaches; Governance Reforms.

Societal campaigns for social and cultural reform (e.g. dowry campaign)

How might ‘human wellbeing’ help with SP?

Type of SP Instruments (Davies and McGregor, 2009).

Protective (social assistance)

Social transfers; disability benefit; pension schemes; social services

Preventive (Insurance and diversification)

Social transfers; funeral societies; livelihoods diversification; social insurance; savings clubs;

Promotive (economic opportunities)

Social transfers; school feeding; starter packs; public works programmes; access to credit; asset transfers; access to common property resources

Transformative (addressing underlying social vulnerabilities)

Land reform; the regulation of markets (e.g. monopoly regulation); legal Reform; Rights-based approaches; governance Reforms; societal campaigns for social/cultural reform (e.g. dowries); promotion of minority rights

How might ‘human wellbeing’ help with SP?Type of SP Material Dimensions of

Wellbeing – standard of living

Relational Dimensions of Wellbeing – personal and social relations

Subjective Dimensions of Wellbeing – values, perceptions, experiences

Protective (social assistance)

Social transfers; disability benefit; pension schemes;social services

Preventive (Insurance and diversification)

Social transfers; - funeral societies

livelihoods diversifica-tion; social insurance; savings clubs;

Promotive (economic opportunities)

Social transfers; school feeding; starter packs; public works programmes

access to credit; asset transfers; access to common property resources

Transformative (addressing underlying social vulnerabilities)

Land reform;The regulation of markets (e.g. monopoly regulation)

Legal Reform;Rights-based approaches; Governance Reforms.

Societal campaigns for social/cultural reform (e.g. dowries); prom-otion of minority rights

4. Conclusions

• Poverty impacts of previous crises significant for child poverty; Early evidence for current crisis supports this;

• SSA connected to crisis but highly nuanced impacts - some countries very badly hit others less so;

• Fiscal/aid landscape shifting; thinking about a new policy narrative - from human development to ‘human wellbeing’ - implications for child poverty analysis, inter-generational transmission, policy responses and child-sensitive SP?