UNICEF Economist Explains Effect of Recession on Global Poor

The launch of Fordham University’s Consortium on Social Justice and Poverty was marked by a discussion on an invisible population that is feeling the effect of the global recession: the poor.

“I’m going to start with this message,” said Ronald U. Mendoza, Ph.D., (GSAS ’97) an economist for UNICEF’s division of policy and practice. “Children are at risk because of the economy. It’s that simple. This economic crisis will be suffered greatly by children and families that had nothing to do with the excesses that caused this downturn. I can’t think of a greater injustice.”

Mendoza used statistics to outline how the unprecedented decline in global economic growth is affecting the world’s poor because of the spike in oil and food prices, such as rice and wheat.

“Though the price of rice was at its highest in the middle of 2008 and has dipped somewhat, it’s still substantially above the 10-year average,” he said, adding that, for a variety of reasons, the poor are often the least equipped to weather the impact of shocks on their income.

They have few assets to sell and limited or no access to formal credit and insurance markets to help smooth income shocks. They often lack the education and marketable skills that are necessary for successful migration to areas with economic opportunities.

The global economic crisis hit children in poverty as the result of a ripple effect, Mendoza said.

“Remittances have also declined,” he added. “Studies have shown that women adjust by working longer hours. Other times, children are pulled out of school to save money for the family or to join the workforce. Sometimes, you have less nutritious food on the table or less food, period.”

This will continue to result in intergenerational transmission of poverty, Mendoza said.

UNICEF is fighting the battle against child hunger by enhancing nutrition security and working with 15 countries with signs of deteriorating situations around marginalized populations.

“You can help by just learning more about this issue,” Mendoza said.

Panelist Sophie Mitra, Ph.D., assistant professor of economics, discussed how the economic downturn affects not only children and families, but also teenagers, women, the disabled and informal and migrant workers.

“The impact of this crisis is heterogeneous in that is not restricted to the poorest. Some in the middle class are falling below the poverty line as we speak,” she said.

According to recent figures from the United Nations, the increase in the number of “extreme poor” in 2009 versus 2008 has reached astonishing numbers. In Africa, there are 11.9 million more extreme poor compared to 2008. In eastern and Southeast Asia, there are 56 million additional extreme poor than there were in 2008. In western Asia, there are .07 million more and in Latin America and the Caribbean, 3.6 million more are classified among the extreme poor.

Mitra proposed a policy response that will protect the most vulnerable.

“An increase in pro-poor spending because, in past crises, pro-poor spending has always been cut,” she said.

Mitra recommended a “bailout for the poor” that includes reforming or expanding the social safety net. This expansion/reform could include the creation of public works programs such as the one in India that guarantees informal workers at least 100 days of work per year; as well as cash transfer programs to poor households.

The third panelist at the event, Sister Ann Braudis, M.M., Ph.D., of the Maryknoll Office for Global Concerns, discussed how the economic crisis affects climate change and sustainable development.

She said using gross domestic product to measure the wealth of countries is a broken system, considering that the cleanup and everything related to a chemical spill at a Superfund in New Mexico, for example, is counted in the United States’ GDP.

“The time for a new way of counting wealth has arrived,” she said.

Sister Braudis, who has spent time working in countries such as the Philippines and Bolivia, urged attendees to conserve water, which may turn out to be the next big shortage in developing countries.

“We are a species charged with the care of our planet,” Braudis said. “The future of everything depends upon this. We have a moral sense of responsibility for the health and maintenance of the planet. The challenge we face today is to align our behaviors with our understanding.”

The panel was moderated by Monsignor Joseph G. Quinn, J.D., J.C.L., Fordham’s vice president for mission and ministry. “The fact that there are so many of you here today is a great sign of the goodness and work at Fordham,” he said.

Dale Lindquist, D.Min., associate director of the Beck Institute on Religion and Poverty, said the kickoff event placed the focus on a topic of the utmost importance.

“Poverty is a real problem in this country,” he said. “Many think we’re an affluent country, but that’s because we don’t really think in terms of the poor. The poor and the really poor are an invisible population—they just don’t exist. They are just not in the public awareness and I think having a consortium like this brings it into the awareness of the University and that is really an enormous contribution.”