1. IDS Research on the Financial Crisis
UNICEF
16 July 2009

2. The In Focus Policy Briefings www.ids.ac.uk/go/infocus7
Summary
Evidence from previous crises
Qualitative Impact in 5 countries
Social Protection Responses
Fiscal space
China and LICs
Global trade
Trade Credit
Narratives
A New Development Paradigm

3. The Short Research Projects
Trade Credit
Global Trade and Prices
China’s impact on developing countries
Narratives about the Crisis
Rapid Qualitative Assessment of impact in 5 countries

4. Trade Credit is not a problem for everyone
The Real Problems
Exchange rate changes but for exporters to the UK
Sterling devaluation reduces income
Local costs increase as currencies appreciate
Many inputs prices in dollars
Falling demand
Slow renewals of orders for garment companies
Falls in demand for flowers
Food not so badly affected
The Surprise
Interviewed established garments and horticulture firms in SSA
None of the firms interviewed has had problems with trade credit
But big problems for some firms in Central America
And perhaps for smaller, newer or less well established firms

5. Scenario: 5% Decline in GDP of OECD Countries
Not everyone loses from an OECD recession
Scenario: 5% Decline in GDP of OECD Countries 5

6. No indication that Chinese strategic investments in Africa will decline
Demand for some inputs from China (e.g cobalt) has collapsed, leading to halting of production and loss of jobs e.g. in DRC
Chinese state companies are pushing ahead with strategic energy sector investments and infrastructure projects, for example, stakes in Rio Tinto and OZ Minerals Ltd.
Private companies such as the Shenzhen based company Huawei Technology are continuing to expand in technology areas in Africa.
During early 2009 visits of government leaders to Africa, China has committed to further aid and development cooperation

7. The Food Crisis is far from over
Effects of food and fuel price hikes still being felt
Food prices still higher than 2007
Not dropping everywhere
Uncertainty in agricultural markets
Export sector job losses in Jakarta
but not in Dhaka
Diversification and adaptation
Micro- and informal credit markets hit

8. How might Development be different
Context sensitivity - or throwing the baby out with the bathwater?
A new era for global economic governance?
A new opportunity to protect the poor
…and the planet