Multiple threats are converging to leave families reeling
by UNICEF, Oxfam, UNCTAD, GI-ESCR, agencies
9:05am 8th Feb, 2023
Multiple threats are converging to leave families reeling, by Jasmina Byrne - Chief of Policy, UNICEF Innocenti – Global Office of Research and Foresight.
2022 was incredibly difficult for people around the world. We were confronted by a series of major crises, including a continuing pandemic, a major war in Europe, an energy crisis, rising inflation and food insecurity.
These events hit children particularly hard, compounding the already severe impacts of the COVID-19 pandemic. Millions of children had to flee their homes because of conflict or extreme weather events. At the same time, child malnutrition and the number of children in need of humanitarian assistance rose.
The war in Ukraine, for example, has led to higher food and energy prices, which in turn has contributed to rising global hunger and inflation.
Efforts to address inflation through rising interest rates in the US have driven up the value of the dollar against other currencies, making developing countries’ imports, debt repayments and their ability to access external financing more difficult.
As we explain in our new report, ‘Prospects for Children in the Polycrisis: A 2023 Global Outlook’, these realities have added up to what has been termed a ‘polycrisis’ – multiple, simultaneous crises that are strongly interdependent.
As we look to 2023, it’s clear that the polycrisis is likely to continue shaping children’s lives. The effects of these intertwined and far-reaching trends will be difficult to untangle, and solutions will be difficult to find as policymakers struggle to keep up with multiple urgent needs.
The situation is particularly dire in economically developing countries. Higher food and energy prices have contributed to a rise in global hunger and malnourishment, with children among the most affected.
The polycrisis is also limiting access to healthcare for many children, making it harder for them to receive treatment and routine vaccinations. Recovery from learning losses caused by the closure of schools will be slow and felt for years to come, while the shift to remote learning has left children from low-income families facing the greatest challenges in catching up.
At the same time, the combination of higher financing needs, soaring inflation and a tighter fiscal outlook will widen the education financing gap needed to achieve the Sustainable Development Goals.
Climate change, too, is also a part of this polycrisis, with visible effects, including devastating floods in Pakistan and droughts in East Africa, making it harder for children to access education, food and healthcare, and causing widespread displacement of populations.
All these factors have led UNICEF to estimate that 300 million children will be in need of humanitarian assistance this year. This staggering number highlights the urgency for international organizations and governments to step in and provide assistance.
But the polycrisis doesn’t have to lead to further instability or, ultimately, systemic breakdown. Some of the stresses we saw in 2022 have weakened somewhat, and new opportunities may arise to alleviate the situation. For example, food and oil prices have dropped from their peaks, and good harvests in some countries may help to lower global food prices.
Fortunately, we know there are solutions and strategies that work. One potential solution is to increase investment in social protection programmes, such as cash transfers and food assistance, which can help alleviate the immediate economic impacts of the polycrisis on families. These programmes can also help to build resilience and reduce vulnerabilities.
The establishment of learning recovery programmes will help tackle the learning losses and prevent children from falling further behind. And early prevention, detection and treatment plans for severe child malnutrition have been effective in reducing child wasting.
Ultimately, a coordinated and collective effort is needed to protect the rights and well-being of children. This includes not only providing immediate assistance but also addressing the underlying causes of the polycrisis and building resilience for the future.
This cannot be achieved without a more coordinated and collective effort from international organizations and governments to help mitigate the effects of the polycrisis and protect children's futures.
And, crucially, we must listen to children and young people themselves so that we can understand the future they want to build and live in.
In fact, we followed this approach when we were assessing trends for ‘Prospects for Children in the Polycrisis’, asking young people from across the world age 16 to 29 to give us their views on some of the challenges their generation faces.
It’s critical that we take action to protect the most vulnerable among us. The future may be uncertain, but by working together we can help to build a better future for our children.
* Prospects for Children in the Polycrisis: A 2023 Global Outlook: http://uni.cf/3JIDDwt
In a joint Statement, the Heads of the Food and Agriculture Organization, International Monetary Fund, World Bank Group, World Food Programme and World Trade Organization described the Global Food and Nutrition Security Crisis.
"Globally, poverty and food insecurity are both on the rise. Supply chain disruptions, climate change, the COVID-19 pandemic, financial tightening through rising interest rates and the Russia’s war in Ukraine have caused an unprecedented shock to the global food system, with the most vulnerable hit the hardest.
Food inflation remains high in the world, with dozens of countries experiencing double digit inflation. According to WFP, 349 million people across 79 countries are acutely food insecure.
The prevalence of undernourishment is also on the rise, following three years of deterioration. This situation is expected to worsen, with global food supplies projected to drop to a three-year low in 2022/2023. The need is especially dire in 24 countries that FAO and WFP have identified as hunger hotspots, of which 16 are in Africa.
Fertilizer affordability as defined by the ratio between food prices and fertilizer prices is also the lowest since the 2007/2008 food crisis, which is leading to lower food production and impacting smallholder farmers the hardest, worsening the already high local food prices. For example, the reduction in 2022 of the production of rice, for which Africa is the largest importer in the world, coupled with prospects of lower stocks, is of grave concern".
http://www.wfp.org/stories/wfp-and-fao-sound-alarm-global-food-crisis-tightens-its-grip-hunger-hotspots http://www.wfp.org/publications/hunger-hotspots-fao-wfp-early-warnings-acute-food-insecurity-october-2022-january-2023 http://www.wfp.org/stories/child-malnutrition-mounts-un-agencies-issue-call-action http://www.ipcinfo.org/
* FAO Crop Prospects & Food Situation (Dec. 22): http://bit.ly/3xB6mfH
Multiple crises unleash one of the lowest global economic outputs in recent decades, says UN report. (UNCTAD)
A series of severe and mutually reinforcing shocks — the COVID-19 pandemic, the war in Ukraine and resulting food and energy crises, surging inflation, debt tightening, as well as the climate emergency — battered the world economy in 2022. Against this backdrop, world output growth is projected to decelerate from an estimated 3.0 per cent in 2022 to 1.9 per cent in 2023, marking one of the lowest growth rates in recent decades, according to the United Nations World Economic Situation and Prospects (WESP) 2023.
The report presents a gloomy and uncertain economic outlook for the near term. Global growth is forecast to moderately pick up to 2.7 per cent in 2024 as some of the headwinds will begin to subside. However, this is highly dependent on the pace and sequence of further monetary tightening, the course and consequences of the war in Ukraine, and the possibility of further supply-chain disruptions.
The tepid global economic prospects also threaten the achievement of the 17 Sustainable Development Goals (SDGs), when the 2023 SDG Summit in September marks the mid-point of the implementation of the 2030 Agenda.
“This is not the time for short-term thinking or knee-jerk fiscal austerity that exacerbates inequality, increases suffering and could put the SDGs farther out of reach. These unprecedented times demand unprecedented action,” said Antonio Guterres, United Nations Secretary-General. “This action includes a transformative SDG stimulus package, generated through the collective and concerted efforts of all stakeholders,” he added.
Amid high inflation, aggressive monetary tightening and heightened uncertainties, the current downturn has slowed the pace of economic recovery from the COVID-19 crisis, threatening several countries — both developed and developing — with the prospects of recession in 2023. Growth momentum significantly weakened in the United States, the European Union and other developed economies in 2022, adversely impacting the rest of the global economy through a number of channels.
Tightening global financial conditions coupled with a strong dollar exacerbated fiscal and debt vulnerabilities in developing countries. Over 85 per cent of central banks worldwide tightened monetary policy and raised interest rates in quick succession since late 2021, to tame inflationary pressures and avoid a recession. Global inflation which reached a multi-decade high of about 9 per cent in 2022 is projected to ease but remain elevated at 6.5 per cent in 2023.
Weaker job recovery and rising poverty
Most developing countries have seen a slower job recovery in 2022 and continue to face considerable employment slack. Disproportionate losses in women’s employment during the initial phase of the pandemic have not been fully reversed, with improvements mainly arising from a recovery in informal jobs.
According to the report, slower growth, coupled with elevated inflation and mounting debt vulnerabilities, threatens to further set back hard-won achievements in sustainable development, deepening the already negative effects of the current crises. Already in 2022, the number of people facing acute food insecurity had more than doubled compared to 2019, reaching almost 350 million.
A prolonged period of economic weakness and slow income growth would not only hamper poverty eradication but also constrain countries’ ability to invest in the SDGs more broadly.
“The current crises are hitting the most vulnerable the hardest — often through no fault of their own. The global community needs to step up joint efforts to avert human suffering and support an inclusive and sustainable future for all,” said Li Junhua, United Nations Under-Secretary-General for Economic and Social Affairs.
The report calls for Governments to avoid fiscal austerity which would stifle growth and disproportionately affect the most vulnerable groups, affect progress in gender equality and stymie development prospects across generations. It recommends reallocation and reprioritization of public expenditures through direct policy interventions that will create jobs and reinvigorate growth. This will require strengthening of social protection systems, ensuring continued support through cash transfers, and discounts on utility bills, which can be complemented with reductions in consumption taxes or custom duties.
Strategic public investments in education, health, digital infrastructure, new technologies and climate change mitigation and adaptation can offer large social returns, accelerate productivity growth, and strengthen resilience to economic, social and environmental shocks.
Stronger international commitment is urgently needed to expand access to emergency financial assistance; to restructure and reduce debt burdens across developing countries; and scale up SDG financing.
* World Economic Situation and Prospects 2023, report by UN Department of Economic and Social Affairs: http://bit.ly/40tZRIH
Over the last decade, the richest 1 percent captured half of all new wealth, report from Oxfam, Fight Inequality, agencies.
The richest 1 percent grabbed nearly two-thirds of all new wealth worth $42 trillion created since 2020, almost twice as much money as the bottom 99 percent of the world’s population, reveals a new Oxfam report today. During the past decade, the richest 1 percent had captured around half of all new wealth.
“Survival of the Richest” is published on the opening day of the World Economic Forum in Davos, Switzerland. Elites are gathering in the Swiss ski resort as extreme wealth and extreme poverty have increased simultaneously for the first time in 25 years.
“While ordinary people are making daily sacrifices on essentials like food, the super-rich have outdone even their wildest dreams. Just two years in, this decade is shaping up to be the best yet for billionaires —a roaring ‘20s boom for the world’s richest,” said Gabriela Bucher, Executive Director of Oxfam International.
“Taxing the super-rich and big corporations is the door out of today’s overlapping crises. It’s time we demolish the convenient myth that tax cuts for the richest result in their wealth somehow ‘trickling down’ to everyone else. Forty years of tax cuts for the super-rich have shown that a rising tide doesn’t lift all ships —just the superyachts.”
Billionaires have seen extraordinary increases in their wealth. During the pandemic and cost-of-living crisis years since 2020, $26 trillion (63 percent) of all new wealth was captured by the richest 1 percent, while $16 trillion (37 percent) went to the rest of the world put together.
A billionaire gained roughly $1.7 million for every $1 of new global wealth earned by a person in the bottom 90 percent. Billionaire fortunes have increased by $2.7 billion a day. This comes on top of a decade of historic gains —the number and wealth of billionaires having doubled over the last ten years.
Billionaire wealth surged in 2022 with rapidly rising food and energy profits. The report shows that 95 food and energy corporations have more than doubled their profits in 2022. They made $306 billion in windfall profits, and paid out $257 billion (84 percent) of that to rich shareholders.
The Walton dynasty, which owns half of Walmart, received $8.5 billion over the last year. Indian billionaire Gautam Adani, owner of major energy corporations, has seen this wealth soar by $42 billion (46 percent) in 2022 alone.
Excess corporate profits have driven at least half of inflation in Australia, the US and the UK. At the same time, at least 1.7 billion workers now live in countries where inflation is outpacing wages, and over 820 million people —roughly one in ten people on Earth— are going hungry.
Women and girls often eat least and last, and make up nearly 60 percent of the world’s hungry population. The World Bank says we are likely seeing the biggest increase in global inequality and poverty since WW2.
Entire countries are facing bankruptcy, with the poorest countries now spending four times more repaying debts to rich creditors than on healthcare. Three-quarters of the world’s governments are planning austerity-driven public sector spending cuts —including on healthcare and education— by $7.8 trillion over the next five years.
Oxfam is calling for a systemic and wide-ranging increase in taxation of the super-rich to claw back crisis gains driven by public money and profiteering. Decades of tax cuts for the richest and corporations have fueled inequality, with the poorest people in many countries paying higher tax rates than billionaires.
Elon Musk, one of the world’s richest men, paid a “true tax rate” of about 3 percent between 2014 and 2018. Aber Christine, a flour vendor in Uganda, makes $80 a month and pays a tax rate of 40 percent.
Worldwide, only four cents in every tax dollar now comes from taxes on wealth. Half of the world’s billionaires live in countries with no inheritance tax for direct descendants. They will pass on a $5 trillion tax-free treasure chest to their heirs, more than the GDP of Africa, which will drive a future generation of aristocratic elites.
Rich people’s income is mostly unearned, derived from returns on their assets, yet it is taxed on average at 18 percent, just over half as much as the average top tax rate on wages and salaries.
The report shows that taxes on the wealthiest used to be much higher. Over the last forty years, governments across Africa, Asia, Europe, and the Americas have slashed the income tax rates on the richest. At the same time, they have upped taxes on goods and services, which fall disproportionately on the poorest people and exacerbate gender inequality. In the years after WW2, the top US federal income tax rate remained above 90 percent and averaged 81 percent between 1944 and 1981.
Similar levels of tax in other rich countries existed during some of the most successful years of their economic development and played a key role in expanding access to public services like education and healthcare.
“Taxing the super-rich is the strategic precondition to reducing inequality and resuscitating democracy. We need to do this for innovation. For stronger public services. For happier and healthier societies. And to tackle the climate crisis, by investing in the solutions that counter the insane emissions of the very richest,” said Bucher.
According to new analysis by the Fight Inequality Alliance, Institute for Policy Studies, Oxfam and the Patriotic Millionaires, an annual wealth tax of up to 5 percent on the world’s multi-millionaires and billionaires could raise $1.7 trillion a year, enough to lift 2 billion people out of poverty, fully fund the shortfalls on existing humanitarian appeals, deliver a 10-year plan to end hunger, support poorer countries being ravaged by climate impacts, and deliver universal healthcare and social protection for everyone living in low- and lower middle-income countries.
Oxfam is calling on governments to:
Introduce one-off solidarity wealth taxes and windfall taxes to end crisis profiteering. Permanently increase taxes on the richest 1 percent, for example to at least 60 percent of their income from labor and capital, with higher rates for multi-millionaires and billionaires. Governments must especially raise taxes on capital gains, which are subject to lower tax rates than other forms of income.
Tax the wealth of the richest 1 percent at rates high enough to significantly reduce the numbers and wealth of the richest people, and redistribute these resources. This includes implementing inheritance, property and land taxes, as well as net wealth taxes.
http://www.oxfam.org/en/press-releases/richest-1-bag-nearly-twice-much-wealth-rest-world-put-together-over-past-two-years http://www.oxfam.org/en/research/survival-richest http://www.icrict.com/icrict-in-thenews/2023/1/22/the-world-will-plunge-into-chaos-if-we-dont-tax-windfall-profits
Davos World Economic Forum: “The stakes are too high for more empty gestures”, says Amnesty International’s Secretary General Agnes Callamard:
“In the last few years, it’s as if Pandora’s box has been pried open unleashing untold crises on the world. We find ourselves facing challenges that often overlap and intertwine – the climate crisis; a global pandemic; armed conflicts; the latest of the industrial revolutions – tech – ripe for exploitation; widespread food insecurity; a global economy delivering unimaginable wealth to a bare few while low wages or unemployment leave millions on their knees.
“Regrettably, many of the globally staged gatherings set up to solve these problems have merely become forums for virtual signalling with few or no concrete outcomes.
“In order to ensure this year’s event in Davos isn’t relegated to the same fate, the highly influential elites attending must reflect on why they are there. Their focus should be to push forward tangible solutions that we already know work, rather than opting to protect the existing global economic system at any cost.
Side events and panels should be filled with conversations on new taxes for fossil fuel companies, on incentivising human rights consistent green energy provision.
They should be addressing endemic corruption, ending tax evasion and aggressive tax avoidance, tackling inequalities – including racism and sexism – at their very root, starting with their own board rooms and cabinet offices. The stakes are too high for more empty gestures.”
http://www.amnesty.org/en/latest/news/2023/01/davos-world-economic-forum-the-stakes-are-too-high-for-more-empty-gestures/ http://www.ips-journal.eu/topics/economy-and-ecology/davos-man-must-pay-6444/ http://www.fightinequality.org/news/governments-davos-under-pressure http://bit.ly/3kqmSvj http://ips-dc.org/report-extreme-wealth-the-growing-number-of-people-with-extreme-wealth-and-what-an-annual-wealth-tax-could-raise/ http://www.ipsnews.net/2023/01/austerity-2023-will-fuel-protests/ http://ny.fes.de/article/food-energy-cost-of-living-protests-2022 http://www.socialeurope.eu/corporate-power-arbitrage-in-a-fractured-world http://www.un.org/sg/en/content/sg/statement/2023-01-18/secretary-generals-remarks-the-world-economic-forum
Taxing super-profits to beat inflation, defend rights, by Magdalena Sepulveda, Director - Global Initiative for Economic, Social and Cultural Rights.
Pandemics, wars and recessions do not exempt states from human-rights commitments. They must tax multinationals and the richest more to protect the most vulnerable.
For many, it began with cancelling a doctor’s appointment, not buying clothes for their children, giving up on visiting relatives because of the cost of transport and paying only the most urgent bill. Quickly, they were forced to cut back on food, by reducing first quality and then quantity, then even skipping meals. Even though they are working and receiving a salary, today they find themselves lining up at food banks to feed their children and themselves.
Everywhere, households are losing the inflation battle. Once their coping mechanisms are exhausted and nothing more can be dispensed, what remains are feelings of anguish and lack of control. No longer having a say in decisions affecting their lives, they are forced to depend on others, resulting in a loss of dignity. This is, in fact, a violation of their human rights.
At the forefront of the victims of the cost-of-living crisis are, as always, the most vulnerable: children, women, the elderly, people with disabilities, minorities and migrants.
In the United Kindgom, for example, 2.2 million more people have been forced this year to forgo expenditures essential to their wellbeing. The UK’s New Economics Foundation calculates that soaring costs weigh nine times more on the poorest than on the richest 5 per cent, in proportion to their income.
In the United States, while 38 per cent of white households say they are facing serious financial problems, among Latino families the proportion rises to 48 per cent, hits 55 per cent for their black counterparts and peaks at 63 per cent among native Americans.
Worldwide, women, especially when also single parents, are the primary victims of the price spike, which the Institute for Women’s Policy Research in the US calls ‘she-flation’.
And the impact on children is devastating: a recent report by the United Nations children’s charity, UNICEF, and the World Bank calculates that, worldwide, three-quarters of households with children have experienced a drop in income since the beginning of the pandemic. In one in four households, adults have gone without food for days at a time to try to feed their children.
It is obviously in developing countries—even more exposed because of the pandemic, the rise in interest rates on their debts and the volatility of capital movements—that the situation is most worrying.
In sub-Saharan Africa, at least 12 per cent of the population is now acutely ‘food insecure’, where lack of access to adequate food puts a person’s life in immediate danger.
Even in Brazil, a country off the UN hunger map since 2014, 33 million people now have nothing to put on their plates.
Economic recovery, itself highly hypothetical, will not be enough. And the austerity programmes several states are implementing—Oxfam has calculated that three quarters of governments are planning to cut spending, with total cuts of $7.8 trillion dollars—will only make the situation worse, by reducing the resources for already very fragile public services. Along with social-protection systems, these are the most effective instruments states have to fight poverty and inequality.
Equally, if governments try to replenish their coffers via indirect taxes, such as value-added tax, this is once again at the expense of the poorest. Sales taxes are not progressive and, unable to save, the poorest have the highest relative propensity to consume.
Neither resort is inevitable. States can instead increase their ‘fiscal space’ by taxing companies and the super-rich more.
The energy multinationals have recorded record profits: Shell reported more than $20 billion in one half-year, Total $29 billion and BP $16 billion—previously unheard-of figures. They owe this only to the political situation—in particular, the war in Ukraine—rather than any jump in their productivity.
Everywhere, taxes on super-profits must be put in place, as recommended by the UN secretary-general, António Guterres, and as some countries, especially in Europe—such as the UK, Czechia and Spain—have started to do.
But focusing on the energy sector is not enough, as explained by the Independent Commission for the Reform of International Corporate Taxation (of which I am a member, along with such figures as Joseph Stiglitz, Jayati Ghosh and Thomas Piketty).
Pharmaceutical companies have seen their profits soar thanks to the pandemic, especially as vaccines were developed thanks to public subsidies. The food sector, where oligopolies are common, has also benefited greatly from the situation. It is by speculating on the markets of basic food products such as wheat that another sector, finance, is now making unprecedented profits. And let’s not even talk about digital companies, the big winners of the pandemic and the champions of tax-avoidance strategies.
Multinationals are not phantom entities. When their profits explode, it is their principal shareholders who benefit, even if they do so discreetly. Take Cargill, which controls, along with three other companies, 70 per cent of the world’s food market. It made more than $5 billion in profit last year—the highest in its 156-year history—and is expected to do even better this year. Thanks to this windfall, the family now has 12 billionaires. There were ‘only’ eight of them before the pandemic.
Indeed, 573 new billionaires emerged in the first two years of the pandemic, or one every 30 hours, according to Oxfam calculations. The total wealth of billionaires is now equivalent to 13.9 per cent of the world’s gross domestic product, three times more than in 2000. The world’s ten richest men have more wealth than the poorest 40 per cent of humanity—3.1 billion people—combined.
As the world celebrates International Human Rights Day, we must remember that pandemics, wars and recessions, terrible and painful as they are, do not exempt states from meeting their human-rights commitments. Nor do they allow them to prioritise other issues.
On the contrary, it is in the midst of crises that the commitment to human rights is most meaningful, as it is through social protection and public services that states succeed in protecting the livelihoods—and so the economic, social, and cultural rights—of the most vulnerable. This is also the only way to make democracy meaningful for all.
* Magdalena Sepulveda is executive director of the Global Initiative for Economic, Social and Cultural Rights and a member of the Independent Commission on International Corporate Tax Reform (ICRICT). From 2008 to 2014 she was United Nations rapporteur on extreme poverty and human rights.
http://www.gi-escr.org/latest-news/an-op-ed-by-our-ed-magdalena-seplveda-on-taxing-the-superprofits-to-win-the-inflation-batte-and-defend-human-rights http://socialeurope.eu/taxing-super-profits-to-beat-inflation-defend-rights http://www.gi-escr.org/latest-news/celebramos-la-convocatoria-a-la-primera-cumbre-latinoamericana-por-una-tributacin-global-incluyente-sostenible-y-equitativa http://www.gi-escr.org/private-actors-public-services http://www.gi-escr.org/publications/white-paper-loss-and-damage-the-missing-piece-international-tax-cooperation-for-new-climate-finance http://www.oxfam.org/en/press-releases/richest-1-bag-nearly-twice-much-wealth-rest-world-put-together-over-past-two-years http://www.oxfam.org/en/research/survival-richest http://inequality.org/research/extreme-wealth-tax/
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