Global Economic Crisis : Main Root Problem of Poverty?
The latest UN report on world social crisis, stated that “ Over the period 2008-2009, the world experienced its worst ﬁnancial and economic crisis since the Great Depression of the 1930s. In 2009 global output contracted by 2 per cent . Global unemployment rose sharply from 178 million persons in 2007 to 205 million in 2009. Th e rapid rise in unemployment has triggered an increase in vulnerability, especially in developing countries without comprehensive social protection. Estimates suggest that between 47 million and 84 million more people fell into, or remained trapped in, extreme poverty because of the global crisis. The economic crisis was preceded by the food and fuel price hikes in 2007 and 2008. According to the FAO, the number of people living in hunger in the world rose to over a billion in 2009, the highest on record. Th ese multiple crises have set back the progress many countries have made towards achieving the internationally agreed development goals, including the Millennium Development Goals.[i]”
Try to understand the logic behind the blaming Global Economics Crisis as the root of the problem of unemployment by concluding a liner correlation amongst the variables attributed to the poverty as follows: Poverty is caused by employment, employment is caused by no investment; no Investment because of no economic growth, no economic growth is caused by collapsed of global financial system.
This logic may work in developed country not for developing country, although SHA ZUKANG- under Secretary-General for Economic and Social Aﬀairs of UN in the preface of the report say : “ Although the ﬁnancial crisis did not originate in the developing countries, their economies, especially those more integrated into international ﬁnancial markets, were not immune to the ﬁnancial turmoil. They were hurt through a variety of channels, including collapsing trade and commodity prices, capital ﬂow reversals, higher costs of borrowing, declining remittance incomes”
The argument is weak since the pattern and concept of economic crisis in 1930 is far different with the pattern of current economic crisis, including the concept of poverty and quality of live . How ever I’m agree that deficit of global financial market system is the problem of current global and environmental crisis. If they realize the global system is the root of the problem, so the only solution is changing or transformed it. We can measure the success of this global talk that involving 12 000 leaders of UN system, states member, CSO, and private businesses from the degree of changing in global economics system . Blaming global economic crisis is the only excuse of UN of their fail to implement their humanity mandate
Since the last two days CNN the only English channel in Rio that is not dubbed in Porto debating the request of 120 billion euro bailout to save Spain financial crisis. As it happened in Greece , there is still pro and contra with regards to the need of ball out. Obama suggest decrease spending and budget cutting, while Director of IMF said that bailout is the solution since the problem is lack of money. She said “ this the only way to save Spain and all Europe country that euro system work” UN MDGs-8 report 2011 reported that “Donor countries provided a record-high $129 billion in oﬃcial development assistance (ODA) in 2010”[ii] Further more the report say that this amount of support although still far from the 0,7 percent of UN targeted , have give significant impact on achieving some target of MDGs. If IMF want to be the hero of humanity , she will see the social global crisis is much danger than Spain that is believed by Spain people can solve their own problem without bailout as Greece done; and donate the money for the capital of sustainable development. That will really make different ; although this is only a dream of utopist.
Thinking about poverty alleviation can not be measured by income or expenditure, but more important is its reliance. The resilience only happened when the world agree to change their global economic system that will ensure just distribution, enough consumption and sustainable planetary boundaries . However, again this is just a dream if major member of states especially developing countries never want to change their position in maintaining their paradigm and its domination, . TWN reported that 29 May to 2 June informal negotiations in New York on the outcome document for the Rio+20 Conference, substantial differences remain between developed and developing countries over understandings and intentions of the ‘green economy’ concept . There are also rumors here in Rio that EU states leader will not come due to urgent priority to solve European financial crisis, while US president will also not come due to next year election. Long way step toward sustainable development. ( Sigit Wijayanta, June 12)
[i]The global Social Crisis, the Report of World Social Situation in 2011, http://www.uncsd2012.org/index.php?page=view&type=400&nr=195&menu=45
[ii] The MDG Gap Task Force Report 2011: The Global Partnership for Development: Time to Deliver, UNDESA, http://www.uncsd2012.org/index.php?page=view&type=400&nr=186&menu=45
Photo : Behind the beauty of Rio – by Setya Dharmadja