What impact will the global financial crisis have on the UN’s work and how can these effects be alleviated? This report, based on a meeting of senior managers from UN agencies in 2009, calls for rapid action to address both the immediate challenges of the crisis and long-term issues. A coherent, comprehensive and coordinated strategy is needed. Recommendations include the establishment of a social protection floor, to consist of: (1) access to essential services; and (2) social transfers in cash and in kind.
The crisis is multi-dimensional and has had serious financial, economic and social effects. It has impacted upon exchange rates, fiscal policies, export and import markets and has led to a global jobs crisis. While the financial crisis will initially impact on people in the area of jobs, the impact will soon be felt in the area of service provision. The number of people suffering from chronic hunger is expected to rise from 890 million (2006) to around one billion in 2009. Unless the right measures are taken, 50 million additional job losses are estimated as a result of the current crisis by the end of 2009 as compared to the end of 2007.
The flow of resources to developing countries may decline as funds for development and the flow of income from migrant workers’ remittances are reduced. There are considerable risks associated with the reduction of development spending. Commitments to increase development aid must be met. Donors will need to deliver at least $300 million in the next two years.
Policy coherence and coordination are essential. Promoting coordination of strengthened financial oversight and of economic stimulus packages, for example, will enhance their overall effectiveness. Providing relevant policy advice will contribute to protecting people, accelerating recovery from the crisis and preventing its recurrence. The crisis will affect countries differently and policies must be adapted to fit specific national priorities. Action is needed in the following areas:
- Additional financing for the most vulnerable: Devise a joint World Bank-UN mechanism for the common articulation and implementation of additional financing.
- Food security: Strengthen programmes to feed the hungry and expand support to farmers in developing countries.
- Trade: Fight protectionism, including through the Doha round and strengthening aid for trade initiatives and finance for trade.
- A green economy initiative: Promote investment in long-term environmental sustainability and putting the world on a climate-friendly path.
- A global jobs pact: Take measures to boost employment, production, investment and aggregate demand.
- A social protection floor: Ensure access to basic social services, shelter, and empowerment and protection of the poor and vulnerable. A social protection floor could consist of two main elements: (a) Services: geographical and financial access to essential public services (such as water and sanitation, health, and education); and (b) Transfers: a basic set of essential social transfers, in cash and in kind, paid to the poor and vulnerable to provide a minimum income security and access to essential services, including health care.
- Humanitarian intervention, security and social stability: Take emergency action to protect lives and livelihoods, meet hunger and humanitarian needs, protect displaced people and shore up security and social stability.
- Technology and innovation: Develop technological infrastructure to facilitate the promotion and access to innovation.
- Monitoring and analysis: Strengthen macroeconomic and financial surveillance and implement an effective economic early warning system. It is important to urgently establish a UN-wide vulnerability monitoring and alert mechanisms to track developments and report on the political, economic, social and environmental dimensions of the crisis.
Mr Somavia is Director-General of the International Labour Organisation and Chair of the UN High-Level Committee on Programmes.
