What have we learned from the Global Economic Crisis?

Last week we (Oxfam International) met to discuss a series of studies on the impact of, and response to, the global economic crisis (GEC). Partly because the discussion took place in Bangkok, the research (and therefore this summary) was very weighted towards East Asia and the Pacific, but here are some initial impressions.

concept-resilience-jan06From studies in 11 countries, if one word emerges with enhanced importance from the GEC, it is resilience. Of countries, communities, households, and individuals. Resilience holds the key to preparing for and coping with shocks, and rebuilding lives afterwards.

In many countries the crisis is far from over – not much sign of green shoots there. But in any case, it is vital to learn the wider lessons on how to build resilience, replenish it where it is depleted, and avoid ‘self harming’ forms, such as selling off assets. This won’t be the last crisis, and one of the lessons is that building resilience prior to the shock to a large extent determines its impact. A list of things that help going into a crisis includes

· Free, universal health and education systems
· Social protection systems in place, not confined just to formal sector workers
· Social capital (family networks, social organizations, faith/religion)
· Natural capital – strong natural resource base that isn’t already over-exploited
· Diversified economic activity (national and household levels)
· Good economic management (low debt, low fiscal deficit, good domestic resource mobilization)
· Crisis-proof credit system (state-owned banks and microfinance institutions have had a better crisis than many private banks)
· Labour market regulation (and rule of law to ensure its implementation) reduces mass lay-offs
· Discriminating integration with global trade and finance
· Commodity stabilization funds or other countercyclical measures during boom times

dog_blog_cartoonAs well as many nasty bites, the research revealed several ‘dogs that didn’t bark’ – things that we expected to happen, based on previous crises, but that have happened differently or not at all. In a surprising number of cases, migrants have failed to return to their villages; people have kept their jobs, albeit with lower wages, fewer hours, and worse conditions; families have managed to keep their kids in school; governments haven’t slashed public services and political regimes have avoided major upheavals (apart from Iceland). Much of this was down to improved resilience, both as a result of lessons learned from previous crises (e.g. Asia 1997/8; Latin America 1980s), which prepared people for future shocks, and due to the ways governments’ and donors’ responses to the GEC have reduced people’s vulnerabilities.

The nasty bites that did come were both expected and unexpected: job losses have compounded high food prices and families (especially women) have reduced their food intake and quality; the informal sector (waste-pickers, home workers, street vendors) has been hit by less demand and more competition; farmers have had to deal with less credit and climate variations, have produced less and provided less labour for the landless poor.

I’m now working on a paper summarizing the case studies, trying to include more material from other regions (where I suspect resilience may be more limited than in East Asia). If anyone knows of particularly good case studies (other than the AfDB, World Bank, IDS and ODI work I’ve already talked about on this blog), from Africa, Latin America, South Asia, Central Asia and Eastern Europe, I would love to hear about them. Over the next couple of months we will be publishing the national case studies, regional summaries, and various other crisis-related material – I’ll keep you posted.

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Comments

3 Responses to “What have we learned from the Global Economic Crisis?”
  1. jnorins

    Not to be too cynical, but the list of resiliency factors seem a bit idealistic for most developing countries. Which countries were used for the case studies? Isn’t it also the case that some countries have not really been harmed by the crisis because they had limited involvement in the global economy to begin with? This idea of resiliency is quite interesting and I look forward to reading some of the forthcoming case studies.

  2. I would have to agree with jnorins statement regarding countries not being harmed by the crisis because they are not involved in the global economy or at least to the extent that other countries are. This was a good read though and I look forward to more.

  3. Perhaps the most astonishing element of the blatant incompetence of ‘experts’ in analyzing financial markets is their consistent ignorance with respect to the fundamental problem created by private banks, such as the criminal enterprise known as the Federal Reserve Bank, literally making money out of nothing then lending it out plus interest.

    Honestly, what do you think would happen in your neighborhood if you gave someone a printer and let them make money out of nothing? How long before they use their fiat-money to own all judges, politicians, cops, military and prison industrial complexes and your home? It took the Fed 100 years.

    The US Fed Bank funded all the major wars while their owners manufactured armaments for both sides. We have to stop being so utterly incompetent and focus instead on the real problem, the NWO bankers.

    For a useful chart proving the Fed instigated all the major recessions in the US go to http://www.libertyforlife.com/banking/us-federal_reserve_bank.htm

    You can learn much more about the Fed on the Liberty For Life site under the “Evil Fed Bank” links. It’s time to wake up guys.

    Take a look at the InfoTelesys Get IT Ed project on the Afghanistan link on the .com site. That and the Get IT Bank project would eliminate world hunger and most wars.

    With much appreciation for your effort and eagerness to help.

    My kindest regards,

    Liberty For Life
    C

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