Poverty and Social Impact Analysis of the Economic Crisis

 Photo: UNCDF
Photo: UNDP Fiji

In 2009, the Government of Norway provided US$ 1.2 million over two years to UNDP, part of which was allocated for PSIA (Poverty and Social Impact Analysis) projects. Countries where these projects are implemented will be able to identify the impact of the economic and financial crisis and come up with policy options to protect poor and vulnerable groups.

Eighteen countries were selected based on the merits of their proposals: Armenia, Kiribati, Lithuania, Moldova, Namibia, Paraguay, Morocco, Philippines, Syria, Ukraine, Uzbekistan and seven countries in the Caribbean. The PSIA studies are to be completed within 4-6 months.

Countries with strong government involvement and interest in PSIA and significant potential to build expertise among researchers and policy-makers are given additional funds. These funds will be used to disseminate results of PSIA studies more extensively, to expand policy dialogue around crisis response measures and to further develop their capacity.

The PSIA approach is being used for the first time in the Eastern Caribbean, a region hit hard by the crisis. UNDP is providing training and technical expertise to conduct a regional study that analyses the channels through which the crisis affects the countries, reviews individual and government responses to the crisis, compares them across countries and assesses vulnerability and resilience of the countries in the region. The process is coordinated with the United Nations and other donors. One of the key recommendations of the study is to put in place a coherent social protection policy consistent with both medium- and long term development plans.

PSIA studies conducted in these selected countries cover many different problems exacerbated by the economic crisis and present wide-ranging policy options to respective countries’ governments. For example, in Armenia and Kiribati, PSIA studies identified people most vulnerable to the crisis. In Uzbekistan, it analysed problems of urbanization which worsened with the onset of the crisis as people migrate into cities in search of jobs. In Lithuania, Moldova and Paraguay, the studies recommend introducing or expanding social protection programmes. In the Philippines and Syria, the key recommendation is to change the emphasis of macroeconomic policies, while in Namibia and Ukraine they assess measures already taken by governments to respond to the economic crisis.

In several countries, the PSIA studies were conducted in collaboration with other UN and international agencies.