News: Feb 10, 2021
In times of crisis, governments often struggle with budget deficits. The International Monetary Fund can provide funding, but the money comes with a set of conditions. Most often the IMF asks the borrowing government for austerity interventions – rather than stimulating the national economy.
“It’s the never-ending story of stimulus vs austerity,” says Adel Daoud at the University of Gothenburg. “But we don’t know that much about which families are affected the most by austerity measures.”
Adel Daoud holds a PhD and works at the University of Gothenburg Department of Sociology, where he has looked at how families at different income levels are affected, using large global datasets and machine learning. That is a subset of Artificial Intelligence, working with algorithms that successively develop and improve through experience.
“We have found significant negative impacts of International Monetary Fund, IMF policies for children also in families in middle income groups,” says Adel Daoud.
The COVID-19 pandemic has made the situation for children even more serious. Many of them might lose a whole year of schoolwork; this multi-dimensional poverty has been estimated to lead to future losses in wages amounting to almost USD 900 per year. A large number of families and children risk being thrown back into extreme poverty. Infant mortality, mental health and gender-based violence make the prospects even darker.
“At the same time, we know that investments in children have the highest return rates. For one dollar spent, the return for society may be five dollars or more,” explains Andrés Franco, Deputy Director of Multilateral Partnerships at UNICEF.
Adel Daoud and Andrés Franco were both speakers at the Global Sustainable Futures webinar on 2 February, focusing on ’Favourable policies for children – with and without a pandemic’.
Andrés Franco pointed out that the pandemic has led to a contraction of global economies. The support packages – maybe 13 trillion US dollars – are primarily concentrated to high-income countries, while many low- and middle-income countries lack social protection systems and means to stimulate the economy. Some measures have actually contributed to a prioritization away from children, such as postponed immunisation programmes.
“We need more research,” Andrés Franco concluded. “We need to know how to safeguard spending, and how to ensure effective and efficient use of financial resources. This will ultimately benefit children and their families.”
Countries in Sub-Saharan Africa are already in debt with Tanzania and Sudan carrying the heaviest burdens of IMF conditioned loans.
“Austerity has a large impact on children,” says Adel Daoud. “Investing in children and incorporating children’s perspective is imperative.”
Subject: Favourable policies for children – with and without a pandemic
Speakers: Adel Daoud, Senior Lecturer, Department of Sociology and Work Science, University of Gothenburg and Andrés Franco, Deputy Director, Multilateral Partnerships, UNICEF.
Date: 2 February 2021
Global Sustainable Futures encourages research collaboration between the two universities in Gothenburg and partners in low- and middle-income countries. Please feel free to get in touch – find contact information to the team here.
