Despite emerging signs of recovery, children and women in many countries are likely to be severely affected by the overall impact of the economic crisis, and those already most vulnerable are likely to be the hardest hit. The most immediate impact is being felt through increasing unemployment in poor households, many of which were already facing unusually high food prices. These threats will be compounded where governments, facing tightening budgets, reduce expenditures on health and education, shifting the burden of service provision to these already struggling households. For example, during the Asian financial crisis, Thailand reduced education and public health spending by 6 and 9 percent respectively compared to the previous year and Indonesian public health expenditure fell by 7 percent during the first year.1,2
While the full impacts of this crisis on children are still unfolding, past economic crises give an indication of how severe the impacts may be. During the Asian financial crisis, Indonesia saw significant declines in school enrolment among the rural poor, as the percentage of 7-12 year olds not enrolled in school doubled from 6 to 12 percent.3 Where public services are cut, young girls are at particular risk of being taken out of school to work or care for the sick and elderly.
The greatest impact, however, may be felt in children’s health.4 During the 1989-1990 economic crisis in Peru, infant mortality increased by 2.5 percent, resulting in approximately 17,000 additional child deaths. During Mexico’s economic crisis in the 1990s, the under-five mortality rates rose 7 percent above expected levels.
Initial indications suggest that the impacts of the current crisis are likely to be even more severe. After contracting by about 1 percent in 2009, global activity is forecast to expand by about 3 percent in 2010, which is well below the rates achieved before the crisis,5 and the World Bank projects that in addition to the 130-155 million people pushed into poverty by the soaring food and fuel prices in 2008, another 53 million people will be living on less than $2 a day.6 With estimates suggesting that a 1 percentage point contraction in the economies of developing countries leads to as many as 40,000 additional infant deaths, without an adequate response to the crisis the consequences for children could be dire.7
1. Knowles, James, Ernesto Pernia and Mary Racelis. Social Consequences of the Financial Crisis. Asian Development Bank Economic Staff Paper 60. Manila; 1999. (pdf)
2. Stalker, Peter. Beyond Krismon: The Social Legacy of Indonesia’s Financial Crisis.” UNICEF Innocenti Working Paper; 2000. (pdf)
3. Frankenberg, E., D. Thomas and K. Beegle. The Real Costs of Indonesia's Economic Crisis: Preliminary Findings from the Indonesia Family Life Surveys, Labor and Population Working Paper Series 99-04: RAND Corporation; 1999. (pdf)
4. Bhutta, Z., F.A. Bawany, A. Feroze and A. Rizvi. The Impact of the Food and Economic Crisis on Child Health and Nutrition Working Paper. Prepared for UNICEF Conference on the impact of the economic crisis on children; 2009. (pdf)
5. World Economic Outlook 2009. Sustaining the Recovery. International Monetary Fund. October 2009. (pdf)
6. World Bank press release (Feb 12, 2009) Crisis Hitting Poor Hard in Developing World, World Bank says. (read)
7. Baird, S., Friedman, J. and Schady, N. Aggregate Income Shocks and Infant Mortality in the Developing World. World Bank Policy Research Working Paper 4346; 2007. Cited in: Ferreira, F., Shady, N. Aggregate Economic Shocks, Child Schooling and Health. World Bank Policy Research Working Paper 4701; 2008. (pdf)
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