The real cost of recession


Nine years ago, 189 nations agreed to take action to reduce the number of people around the world living on less than 80p a day. But as the recession shows no signs of slowing down, what impact is the economic crisis having on the war on poverty

Days before the G8 Summit met in July in L’Aquila, Italy to discuss the economic crisis and international development, a UN report warned that current progress in eradicating poverty and hunger is too slow to meet the agreed 2015 targets. The targets, agreed in the Millennium Development Goals (MDGs), aim to improve worldwide development. The report also estimates that up to 90 million more people will be living in extreme poverty by the end of 2009, undoing the progress of the last nine years.

On the same day, Douglas Alexander, the UK’s International Development Secretary, announced details of a new white paper, Building our Common Future. It promises to change the way the UK provides funding and a renewed commitment to contributing £9bn a year to international development by 2013 – roughly 0.7% of Gross National Income (GNI).
According to UN statistics, in 1990 1.8 billion people across the globe lived on less than 80p ($1.25) a day. By 2005 that figure had dropped to 1.4 billion. This, the UN stated, was due to the success of the Millennium Devel¬opment Goals (MDGs).

In light of the UN report, the Secretary-General, Ban Ki-Moon, said, “We cannot allow an unfavourable economic climate to prevent us from realising the commitments made in 2000, The global community cannot turn its back on the poor and the vulnerable. Now is the time to accelerate progress towards the MDGs.”

Last year development fund¬ing dropped for the second year in a row, raising concerns about the impact the global economic crisis. In addition, gains made in the eradication of hunger re¬versed due to increasing food prices and rising production costs.

Tom Morrison, from the Department of International Development (DFID) said, “The current recession is having a huge impact on the MDG targets. For farmers in developing countries especially, the cost of production is increasing at a far greater rate than the rising price of food. So although they are making more money on the food they produce, it is harder and more costly to produce.”

Furthermore the financial meltdown in many western economies has affected developing countries trying to export their produce in order to independently finance their own development programmes.

In 2005 at the G8 Summit in Gleneagles, leaders of developed countries committed to increasing their development aid. However the shrinking global economy threatens to reduce the total figures commited as many countries express their contribution as a percentage of GNI.
Last year the UK contributed approximately 0.4% of GNI, 0.3% shy of the 2013 target of 0.7%.

Douglas Alexander said, “We have made great strides over the past decade in tackling global poverty but there is much still to do. The economic downturn has had a devastating effect on the developing world. The economic crisis has highlighted as never before the interdependence of nations, rich and poor, across the world.”

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