Saturday, October 3, 2009

Panel 4: Including children in policy responses: Past lessons and future scenarios

Panel 4: Including children in policy responses: Past lessons and future scenarios
Chair and opening presentation: Richard Blewitt, HelpAge International, UK

Richard Blewitt is CEO of HelpAge International. Prior to working at HelpAge, Richard was at the British Red Cross, where he became Director of Strategy, Planning and Coordination. Between 1991 and 1996 Richard worked with Save the Children on emergency and food security issues in East Africa, and in their Ethiopia and Sudan programmes. Richard has also worked for ActionAid as Emergency Operations Manager and has been on secondment with the UN Office for Coordination of Humanitarian Affairs. Richard began his career as a teacher in Sudan.

Social protection responses to economic crises and their impacts on children: Learning from past lessons. Rica Garde, Save the Children, UK.

Abstract: The global economic crisis is expected to push millions of people into poverty in developing countries. As previous economic crises have shown, children tend to be among the hard-hit when households experience economic shocks. As households are forced to make difficult choices, more children are pulled out of school or fall into malnutrition for example —both of which were seen in during the 1997 Asian Financial Crisis in countries such as Indonesia. While these are temporary events, they have also been proven to have long-term negative consequences for children including reductions in lifetime educational achievement and wages.

In response the current crisis, there has been increased attention to social protection as part of the response. Past experience indicates that social protection programmes can play a significant role in helping households cope during crises, and in mitigating or preventing negative consequences for children. Learning lessons from these experiences may bring important insights to the current crisis. This paper will therefore analyse the development and evolution of social protection programmes in previous crises and the consequent impacts for households and children. Given that the impacts of the current crisis in developing countries are in fact the result of multiple economic phenomena (food and fuel prices, financial system disruptions, global economic slow down), this paper will look at two very different case studies – the introduction of the National Safety Net programme in Indonesia during the Asian crisis and the evolution of the Productive Safety Net Programme in Ethiopia as a response to repeated food crises. Based on these case studies, it examines the characteristics of these programmes, how they were adopted and implemented, their mitigating effects for children and their potential to turn into long-term anti-poverty schemes. The paper will close with lessons for the current crisis that can be drawn from the case studies.

Rica Garde is an economic policy officer at Save the Children UK. She has contributed to a number of Save the Children UK flagship reports including “The Next Revolution: Giving Every Child a Chance to Survive” and the upcoming “Hungry for Change: An Eight-step, Costed Plan of Action to Tackle Global Child Hunger”. She has worked on a research project on remittances for the Poverty and Economic Policy Network while based in the Philippines. Previously she was a research officer for trade and economics at the Australian Embassy in Manila working on issues concerning agriculture trade, the mining sector, and the Asia Pacific Economic Cooperation among others. She has also worked as a consultant for the ASEAN+3 Research Group Studies in 2005 and 2006. Miss Garde obtained an MSc Development Administration and Planning from the University College London and an MA Economics from the University of the Philippines.

Towards understanding the impact of the international financial crisis on child poverty in South Africa: A micro-macro simulation perspective. Servaas van der Berg, University of Stellenbosch, South Africa and Dr. Ramos Magubu, South Africa Fiscal and Financial Commission, South Africa.

Abstract: The financial crisis in the world’s major economies and the subsequent world recession has also now deeply affected South Africa. Some of the impacts are felt in investor and consumer confidence, as well through strongly declining prices of South African export commodities. Consequently, most of the economy has slid into recession, with resultant impacts for unemployment and prices. In this context, it is likely that poverty is on the increase and that this increased poverty will affect children. Almost 40 percent of South Africa’s total population is children(IES 2005), of which two-thirds live in poverty. This can be compared to the adult poverty headcount of 45 percent.

This study will provide insights into the magnitude of the shocks associated with the crisis in macroeconomic terms in South Africa, the country’s capacity to withstand or cushion these shocks, and the extent of fragility in terms of poverty levels and key indicators of child wellbeing (both money metric and non-money metric). Analysis will combine macro and microeconomic tools to assess the extent of the crisis’ impact on the country. Computable General Equilibrium (CGE) modeling will be employed to assess the impact of the crisis on key macro variables. Results of the macro model will then be used to assess the individual and household level effects of the crisis using household survey data and suitable microeconometric techniques that investigate the impact of the crisis on poverty through employment, earnings and household demand behaviour. Of particular importance to this study is the consideration of how the crisis’ effect is mediated through the child support grant, which has been expanded greatly in recent years, and is particularly aimed at children in poor families. This may offer a potential source of protection against poverty for poor children, if the care-givers regard such grants as firstly for the benefit of the children concerned.

Servaas van der Berg is a Professor of Economics and National Research Foundation Research Chair in the Economics of Social Policy, University of Stellenbosch in South Africa. He is a member of the SACMEQ Research Committee, Umalusi Research Forum, Ministerial Committee on School Retention and National Education Policy Thing Tank.

Ramos Mabugu was born in Zimbabwe and obtained B.Sc. and M.Sc. degrees in economics from the University of Zimbabwe before receiving his Ph.D. from Gothenburg University. He has taught and supervised at postgraduate level at the University of Zimbabwe (1996-2002) and University of Pretoria in South Africa (2003-2006). In 2006 Ramos joined the Financial and Fiscal Commission of South Africa. He has published in international and domestic journals as well as contributing chapters to peer reviewed books and conference proceedings. Ramos is currently an Associate Editor, Journal of Environment and Development Economics, Cambridge University.

Simulating the impact of the global food, fuel and financial crises on children and policy responses in Burkina Faso. John Cockburn, University of Laval, Poverty and Economic Policy Network, Canada.

Abstract: Burkina Faso, like the rest of the world, is beginning to see the hard-won economic gains of recent years wear away as a consequence of the impact of the global financial crisis. Growth, which is essential for much-needed poverty alleviation, is expected to fall from 5% in 2008 to 3.5% in 2009. A slowdown in export growth from 6.9% in 2007 to 3.5% in 2008, partly due to a drop of 11% in the cotton price, risks worsening even though the financial system in Burkina Faso is so far resilient to the global financial crisis. This paper aims to track the impact of these changes on individual households, their members and, in particular, children by combining two types of analysis: one at the macro level and the other at the micro level.

The macroeconomic assessment of the global economic crisis requires the use of a computable general equilibrium (CGE) model to incorporate the structural aspects of the economy and capture the many and varied direct and indirect interactions between factor markets, goods markets, households, government, and private and foreign partners. In order to distinguish the impacts on individual households and their members, by evaluating the monetary poverty, nutritional, educational and health impacts on children, a micro-economic analysis will also be undertaken. It will focus on the distributional and child welfare impacts of the external shocks and eventual policy responses.

Finally, the macro-micro model will be used to simulate the effects of various policy options to assess their potential to mitigate the impact of the crisis on poor households. These findings will be used to inform government policy-making.

John Cockburn is co-director of the Poverty and Economic Policy research network and professor at Laval University in Québec. He completed a PhD at Oxford University in September 2001 on child labour and schooling in rural Ethiopia and CGE-based micro simulation analysis of trade liberalization in Nepal. His areas of specialization include child poverty, macro-micro poverty modelling, trade policy analysis and manufacturing competitiveness. He has been active in providing training and technical support to developing country researchers throughout the developing world since 1990.

Appraising the impacts of the 2008/9 global economic crisis and of policy responses on children in Cameroon. Christian Arnualt Emini, University of Yaoundé II, Cameroon.

Abstract: This study aims at assessing the impacts of the 2008/9 global financial and economic crisis on children in Cameroon. Especially, it focuses on the analysis of the multidimensional poverty of children and also appraises the potential effects of consecutive policy responses.
Four primary transmission channels through which the crisis has most likely shocked Cameroon economy are considered: trade (fall in international demand and/or prices of coffee, banana, cotton, wood, aluminium and other mining products, rubber, etc.), foreign direct investments, remittances, and foreign aid.

The methodological approach used is a top-down/bottom-up framework, which encompasses a dynamic computable general equilibrium (CGE) model on the one hand, and a micro simulation module on the other hand. The CGE model is used to simulate the various scenarios of external shocks or policy responses, considering the production sectors and agents interacting within the economy, as well as the labour market structure. Simulation results generated by the CGE model (mainly the changes in prices, consumptions and incomes) are then used within the micro simulation module in order to assess the poverty impacts of scenarios on households and children. Monetary poverty and caloric poverty impacts on children are measured using a Quadratic Almost Ideal Demand System, while impacts on school participation of children, child labour, and on children access to health care are appraised through bi-variate Probit econometric regression within the same micro simulation module.

Child-sensitive policy responses explored include, inter alia, the subsidizing the sales prices of food products, paying cash transfers to poor families; government budget being balanced through an increase of foreign grants in both cases.

The simulation results show that, considering the monetary poverty criterion, the crisis engenders one percent increase of the number of poor children in 2008, and 3 percent increase in 2009, 2010 and 2011, compared to the Business-as-Usual (BaU) scenario. The number of poor children, as regarding the calorific poverty, increases by one percent in 2009 and 2010, and by 2 percent compared to the BaU scenario.

Foreign aid transferred in cash to poor families is revealed here to be the most efficient of the child-sensitive policy responses. The supplementary number of poor children generated by the crisis is completely annihilated thanks to this policy.

Christian Arnault Emini is an Assistant Professor at the Department of Economic Analysis and Policies of the Faculty of Economics and Management, University of Yaounde 2 in Cameroon. He received his Doctorate from the same University in 1998. His PhD thesis assessed the welfare impacts of replacing several cascade-type taxes by an imperfect Value Added Tax (VAT), following the tax reform implemented in Cameroon and other country-members of the Central Africa Customs and Economic Union in 1994. He is a member of the “Poverty and Economic Policies” network based in Laval University where he officiates both as a researcher and speaker. Since September 2005, Dr Emini has served as an adviser of the Prime Minister of Cameroon for Economic Analysis and Prospects’ Affairs.

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