Rasmus Heltberg, Naomi Hossain, Anna Reva, and Andy Sumner
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NEW FRONTIERS OF SOCIAL POLICY Public Disclosure Authorized Public Disclosure Authorized LIVING THROUGH CRISES HOW THE FOOD, FUEL, AND FINANCIAL SHOCKS Public Disclosure Authorized AFFECT THE POOR Rasmus Heltberg Naomi Hossain Anna Reva Editors Public Disclosure Authorized LIVING THROUGH CRISES NEW FRONTIERS OF SOCIAL POLICY Living through Crises How the Food, Fuel, and Financial Shocks Affect the Poor Rasmus Heltberg, Naomi Hossain, and Anna Reva Editors © 2012 International Bank for Reconstruction and Development / International Develop- ment Association or The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org 1 2 3 4 15 14 13 12 This volume is a product of the staff of The World Bank with external contributions. The fi ndings, interpretations, and conclusions expressed in this volume do not necessarily refl ect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. Because The World Bank encourages dis- semination of its knowledge, this work may be reproduced, in whole or in part, for noncom- mercial purposes as long as full attribution to the work is given. For permission to reproduce any part of this work for commercial purposes, please send a request with complete information to the Copyright Clearance Center Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; telephone: 978-750-8400; fax: 978-750-4470; Internet: www.copyright.com. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Offi ce of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2422; e-mail: [email protected]. ISBN: 978-0-8213-8940-9 e-ISBN: 978-0-8213-9460-1 DOI: 10.1596/978-0-8213-8940-9 Library of Congress Cataloging-in-Publication data have been requested. Cover photo: Curt Carnemark, World Bank. Cover design: Naylor Design, Inc. NEW FRONTIERS OF SOCIAL POLICY In many developing countries, the mixed record of state effectiveness, market imperfections, and persistent structural inequities has undermined the effectiveness of social policy. To overcome these constraints, social pol- icy needs to move beyond conventional social service approaches toward development’s goals of equitable opportunity and social justice. This series has been created to promote debate among the development community, policy makers, and academia, and to broaden understanding of social pol- icy challenges in developing country contexts. The books in the series are linked to the World Bank’s Social Devel- opment Strategy. The strategy is aimed at empowering people by trans- forming institutions to make them more inclusive, cohesive, resilient, and accountable. This involves the transformation of subjects and benefi ciaries into citizens with rights and responsibilities. Themes in this series include equity and development, assets and livelihoods, citizenship and rights- based social policy, and the social dimensions of infrastructure and climate change. Titles in the series: • Assets, Livelihoods, and Social Policy • Building Equality and Opportunity through Social Guarantees: New Approaches to Public Policy and the Realization of Rights • Delivering Services in Multicultural Societies • Inclusive States: Social Policy and Structural Inequalities • Institutional Pathways to Equity: Addressing Inequality Traps • Living through Crises: How the Food, Fuel, and Financial Shocks Affect the Poor • Social Dimensions of Climate Change: Equity and Vulnerability in a Warming World CONTENTS Foreword xi About the Editors xv About the Authors xvii Study Team and Acknowledgments xxiii Abbreviations xxv Living through Crises: An Overview 1 Rasmus Heltberg, Naomi Hossain, Anna Reva, and Andy Sumner Chapter 1. Anatomy of Coping: Evidence from People Living through the Crises of 2008–11 23 Rasmus Heltberg, Naomi Hossain, Anna Reva, and Carolyn Turk Chapter 2. Bangladesh: Pathways and Impacts of the Global Economic Shocks 61 Mamunur Rashid, Bayazid Hasan, and Naomi Hossain Chapter 3. Crisis Monitoring among Low-Income Workers in Cambodia: Monitoring Vulnerabilities and Discovering Resilience 91 Veronica Mendizabal, Theng Vuthy, Tong Kimsun, and Pon Dorina Chapter 4. Impact of the Economic Crisis in the Central African Republic: Quantitative and Qualitative Assessments 117 Lea Salmon, Josias Tebero, and Quentin Wodon viii • CONTENTS Chapter 5. Risk and Resilience: Summary of Rapid Qualitative Assessments of Social Impacts of the Economic Crisis in Kazakhstan 143 Sandra Schlossar, with Carolyn Turk Chapter 6. Crises in Kenya: Living with Hunger in an Era of Economic and Political Shocks 163 Grace Lubaale and Naomi Hossain Chapter 7. Coping with the Global Economic Crisis in Mongolia: Findings from Focus Group Discussions 185 Anna Reva, Rasmus Heltberg, Altantsetseg Sodnomtseren, and Sarantuya Jigjiddorj Chapter 8. Perceptions of the Economic Crisis and Poverty in Senegal: A Quantitative and Qualitative Analysis 207 Abdou Salam Fall, Lea Salmon, and Quentin Wodon Chapter 9. Economic and Political Crises in Thailand: Social Impacts and Government Responses 233 Veronica Mendizabal, Supang Chantavanich, Samarn Laodumrongchai, Mya Than, Artit Wong-a-thitikul, Warathida Chaiyapa, Cheewin Ariyasuntorn, and Pamornrat Tansanguanwong Appendix 1. Country Studies 257 Index 261 Box 9.1 Thailand’s Political Crisis 234 Figures 1. Transmission Channels 5 1.1. Coping Mechanisms Determine the Ultimate Impact of Shocks 25 2.1. The Impacts of the World Financial Crisis on Economic Growth Rates in Selected Asian Countries, 2006–12 62 2.2. Prices of Staple Foods, 2008–11 70 CONTENTS • ix 3.1. Real Daily Income for Cyclo Drivers, Motortaxi Drivers, and Ricefi eld Workers 98 3.2. Real Daily Income for Garment Workers, Waitresses, and Tourism Workers 99 8.1. Trends in Levels of Satisfaction for Basic Needs in Senegal, 2001–02, 2005–06 214 Tables 1. A Mix of Vulnerabilities and Resilience Is Evident in Coping Responses 3 1.1. Coping Responses Cited as Common or Very Common 28 2.1. Livelihood Changes in Bangladesh, 2010–11 73 3.1. Cambodia and the 2008–09 Global Economic Crisis 93 3.2. Sample of Income and Consumption Monitoring and Focus Group Discussions, 2009–10 95 4.1. Central African Republic: Development Indicators 118 4.2. Impact on Poverty of an Increase in Selected Food and Fuel Prices, 2008 125 4.3. Share of Households Exposed to Different Types of Shocks 128 4.4. Share of Households Benefi ting from Outside Support in Case of Shocks 129 5.1. Employment Strategy Activities 159 6.1. Consumer Price Index, 2009–11 166 6.2. Livelihood Diversifi cation Strategies Reported in Mukuru in 2010 173 6.3. Food-Related Adjustments Reported in 2009, 2010, and 2011 174 7.1. Summary of Major Impacts during the Four Rounds of Research 192 8.1. Senegal: Development Indicators, 2000–09 208 8.2. Trends in Poverty Measures in Senegal, 1994–95, 2001–02, 2005–06 212 8.3. Trends in Subjective Well-Being in Senegal, 2001–02, 2005–06 213 8.4. Potential Impact of an Increase in Food Prices on Poverty in Senegal, 2005–06 217 9.1. Key Indicators 235 x • CONTENTS 9.2. Daily Wages of Informal Workers of HomeNet, Klong Toey Slum, Bangkok, 2008 and 2009 240 9.3. Main Coping Strategies Used by the Groups in the Sample during Q1 2009 and Q1 2010 244 9.4. January 2009 Stimulus Package 248 9.5. 15-Year Free Education with Quality Program 250 9.6. Household Debt in 2009 253 FOREWORD In our world of accelerating change, we are ever more globally connected. The most recognized dimensions of connection are those that affect the richer countries and middle classes everywhere. The runaway explosion of information and communication technologies is one dimension. The rich country debt and banking crisis is another. They conspicuously affect the rich, the less poor, and the powerful. But there is a less-recognized, less-researched, less-understood, and less-publicized domain at the other pole: how global crises affect those in developing countries who are poorer, more vulnerable, powerless, and less visible. It is they and their realities who are the focus and concern of Living through Crises, showing how these populations were hit and harmed by the food, fuel, and fi nancial crises of 2008–11, and the range of their responses. To be sure, they have received broad-brush generalized coverage in the media, and journalists may occasionally bring to light individual cases with sound bites of what people say. The extremes of refugee crises and near- famine conditions get prominent and important coverage. But the quieter everyday crises and suffering of ordinary poor people, their struggles and adaptations, and how these evolve, are largely overlooked. Quantitative surveys of income and expenditure pick up some aspects, although such surveys usually take a long time to conduct, process, and report, and so cannot keep up with rapid change. Some cost of living surveys and indices, and some early warning systems, are more timely but leave many signifi - cant gaps. Food prices are straightforward for governments to monitor, but labor market impacts are less easy, and migration and remittances harder still. Perhaps most critically, surveys are ill equipped and unlikely to cap- ture and report on the contextual detail of how different groups of poor people are affected and how they cope, and how the effects of crisis and the strategies of coping persist and change. And as this book shows, whole groups of marginalized and excluded people can be missed. xii • FOREWORD The cases and conclusions presented here go far in showing how these gaps can be fi lled.