Simulating the Impact of the Global Economic Crisis and Policy. Responses on Children in West and Central Africa

The current global financial and economic crisis, which exacerbates the impacts of the energy and food crises that immediately preceded it, has spread to the developing countries endangering recent gains in terms of economic growth and poverty reduction. The effects of the crisis are likely to vary substantially between countries and between individuals within the same country. Children are among the most vulnerable population, particularly in a period of crisis. Especially in least developed countries, where social safety nets programs are missing or poorly performing and public fiscal space is extremely limited, households with few economic opportunities are at a higher risk of falling into (monetary) poverty, suffering from hunger, removing children from school and into work, and losing access to health services. This study simulates the impacts of the global economic crisis and alternative policy responses on different dimensions of child welfare in Western and Central Africa (WCA) over the period 2009-2011. It is based on country studies for Burkina Faso, Cameroon, and Ghana, which broadly represent the diversity of economic conditions in WCA countries. In order to capture the complex macro-economic effects of the crisis and the various policy responses – on trade, investment, remittances, aid flows, goods and factor markets – and to then trace their consequences in terms of child welfare – monetary poverty, hunger (caloric poverty), school participation, child labour, and access to health services – a combination of macro- and micro-analysis was adopted. The simulations suggest that the strongest effects are registered in terms of monetary poverty and hunger, although large differences between countries emerge. More moderate impacts are predicted in terms of school participation, child labour, and access to health care, although these are still significant and require urgent policy responses. Specifically, Ghana is the country where children are predicted to suffer the most in terms of monetary poverty and hunger, while Burkina Faso is where the largest deteriorations in schooling, child labour and access to health services are simulated. Among the policy responses examined to counteract the negative effects of the crisis on child well-being, a targeted cash transfer to predicted poor children is by far the most effective program. A comparison between a universal and targeted approach is also presented.Global economic crisis, child poverty, hunger, education, child labour, health, West and Central Africa, Burkina Faso, Cameroun, Ghana, social protection

Developing Country Superwomen: Impacts of Trade Liberalisation on Female Market and Domestic Work

This study analyses the effects of trade liberalisation on male and female work in Nepal. Our contribution is principally based upon the leisure activities modeling on one hand, and the effects of male participation in domestic work with trade policy analysis on the other hand. While previous studies explicitly incorporate leisure activities that required data about which little is known, we use a microeconomic model and alternative calibration procedures to avoid arbitrariness. The experiment conducted in this study shows that the complete elimination of tariffs on imported goods in Nepal benefits women more than men in terms of earnings as their wage increases relatively to men. Generally, female market work expands in rural households and contracts in urban households. It appears that the entrance into market production has not been met with an equivalent reduction in the time they spend in domestic work. Consequently the leisure time of women declines as they enter the labor market. Furthermore, the study indicates that leisure time consumed by men, which is already greater than that consumed by women, increases with trade reform. The extend of male participation in domestic work significantly conditions the impacts on male and female wage rates and household labor supply decisions. When male participation in domestic work activities is low, women generally devote less time to market labor. However, their contribution to household income strill increases following trade reform as their wage rates rise relative to male market wage rates. Women are more responsive to the market when there is greatest scope to substitute between female domestic and market work, as occurs when men are more involved in domestic work. However, even in these cases their domestic work does not necessarily decrease in the same proportion.Nepal, trade, gender, leisure, home production, and computable general equilibrium

Case Study: A gender-focused macro-micro analysis of the poverty impacts of trade liberalization in South Africa

This case study examines the impacts on poverty and equality of the extended trade liberalisation strategy that South Africa has been following since 1994. The paper features an integrated CGE microsimulation model with explicit incorporation of non-market activities and gender decomposition. This makes it possible to assess the effects of trade liberalization on between and within-group poverty, as well as on gender-disaggregated household production and leisure. The findings reveal that trade liberalization is strongly gender biased against women.household production; leisure; South Africa; trade liberalisation; gender

Case Study: The growth and poverty impacts of trade liberalization in Senegal

Most empirical studies find relatively small welfare and poverty impacts of trade liberalization, mainly as a result of the static framework generally used, in which welfare gains and poverty impacts result solely from a short term reallocation of resources. Using Senegal as a case study, we illustrate the results of integrating the growth and productivity gain effects of trade liberalization with the resulting long-run impacts on welfare and poverty. We show that the distributional impacts between poor and non-poor depend upon the specific nature of the trade liberalization policies adopted; and the characteristics of the economy in which it occurs. In the Senegalese case, the predicted principal beneficiaries of trade liberalization are urban and higher skill workers.trade liberalization; CGE; productivity gains; growth income curve

The Gender and Poverty Impacts of Trade Liberalization in Senegal

Developing countries are deeply engaged in trade negotiations at the bilateral, regional and international (WTO) levels. As imports, exports and tariff duties all occupy an important part of their economies, far-reaching impacts on production, labor and capital markets, household incomes and, perhaps most importantly, economic growth will indubitably ensue. As men and women occupy very different roles in these economies, particularly in terms of the import and export orientation of the sectors in which they work, they will be affected very differently by these reforms. To anticipate these changes, a dynamic economy-wide model is developed with an application to Senegal. Whereas most similar existing studies consider the comparative static resource reallocation effects of trade reforms, ours is the first to focus on the growth effects (“dynamic gains from trade”), which are thought to be possibly much larger. The trade-productivity link is revealed to be the strongest growth channel, raising GDP by over three percentage points by the end of our 15 year simulation period. Trade liberalization is found to increase the gender wage gap in favor of men, especially among unskilled workers, as men are more active in export-oriented sectors such as cash crops and mining whereas women contribute more to import-competing sectors such as food crops. Furthermore, the ensuing growth effects further widen the over-all gender wage gap, as the productivity gains from increased openness are greatest in female-intensive sectors in which imports rise markedly. Thus, this suggests the need to implement policies aimed at increasing both unskilled and skilled women’s exposure in labor-intensive export industries, which is currently male dominated. A linked microsimulation analysis, based on a survey of Senegalese households, show that trade liberalization reduces poverty in Senegal, particularly in rural areas. While the fall in the relative wages of rural workers would initially lead us to believe that rural households would lose the most from trade liberalization, they are in fact compensated by greater consumer price savings, given that they consume more goods from the initially protected agricultural and agro-industrial sectors.Senegal, Trade, Gender, Poverty, Growth

The Gender and Poverty Impacts of Trade Liberalization in Senegal

Developing countries are deeply engaged in trade negotiations at the bilateral, regional and international (WTO) levels. As imports, exports and tariff duties all occupy an important part of their economies, far-reaching impacts on production, labor and capital markets, household incomes and, perhaps most importantly, economic growth will indubitably ensue. As men and women occupy very different roles in these economies, particularly in terms of the import and export orientation of the sectors in which they work, they will be affected very differently by these reforms. To anticipate these changes, a dynamic economy-wide model is developed with an application to Senegal. Whereas most similar existing studies consider the comparative static resource reallocation effects of trade reforms, ours is the first to focus on the growth effects (“dynamic gains from trade”), which are thought to be possibly much larger. The trade-productivity link is revealed to be the strongest growth channel, raising GDP by over three percentage points by the end of our 15 year simulation period. Trade liberalization is found to increase the gender wage gap in favor of men, especially among unskilled workers, as men are more active in export-oriented sectors such as cash crops and mining whereas women contribute more to import-competing sectors such as food crops. Furthermore, the ensuing growth effects further widen the over-all gender wage gap, as the productivity gains from increased openness are greatest in female-intensive sectors in which imports rise markedly. Thus, this suggests the need to implement policies aimed at increasing both unskilled and skilled women’s exposure in labor-intensive export industries, which is currently male dominated. A linked microsimulation analysis, based on a survey of Senegalese households, show that trade liberalization reduces poverty in Senegal, particularly in rural areas. While the fall in the relative wages of rural workers would initially lead us to believe that rural households would lose the most from trade liberalization, they are in fact compensated by greater consumer price savings, given that they consume more goods from the initially protected agricultural and agro-industrial sectors

Simulating the Impact of the Global Economic Crisis and Policy Responses on Children in Ghana

Like many countries in sub-Saharan Africa, Ghana is experiencing the impact of the global crisis and the uncertain economic outlook. Indeed, as Ghana’s economy is among the most open in Africa, it is expected that the country has been and will continue to be severely affected by the crisis, although strong export prices of its main exports (gold and cocoa) may at least partially counteract the effects associated with the crisis. The main goal of this paper is to understand the potential impacts of the 2008/9 global crisis on different dimensions of child poverty (monetary, hunger, school participation, child labour and access to health services) in Ghana and to support the policy-maker in designing the most appropriate policy response to counteract the negative effects of the crisis. As timely data are not available, a combined macro-micro economic model to predict the impact of the global crisis on children was developed. Simulations suggest that the financial crisis would increase monetary poverty and hunger across all regions of Ghana, eroding many of the gains made over the past few years. Indeed, in comparison with the year preceding the crisis, instead of a reduction of four percentage points in child monetary poverty in 2011 predicted in the absence of crisis, the simulations indicate a 6.6 percentage point increase, with a continuous increasing pattern over the period of study. The global crisis is also predicted to severely deepen hunger among children, which is simulated to increase up to 6.6 percentage points in 2011 beginning with a sharp increase already in 2009. For both monetary poverty and hunger, the impact of the crisis differs across all regions, with the Eastern, Volta and Greater Accra regions predicted to be the most affected. Children’s participation in schooling and labour, as well as their access to health services, are forecast to be much less affected by the crisis, although it is found to reverse predicted increases in enrolment and health access (with substitution toward more modern types of health services) and forecasted reductions in child labour. Finally, alternative policy options have been simulated: a cash transfer programme targeted to poor children is found to be generally more effective in protecting children than food subsidies. Indeed, with a total budget equivalent to 1% of 2008 GDP, a cash transfer – equivalent to an individual annual amount of 19.8 Cedis – would cut the predicted increase in monetary poverty by over two percentage points in 2011. Although Ghana might be in a position to rapidly implement a cash transfer programme building on the existing Livelihood Empowerment against Poverty (LEAP) programme, other interventions (or mix of policies) might be more cost-effective in the short run. A combination of a universal or regionally targeted cash transfer programmes for children aged 0 to 5 years old, together with a school-feeding programme in poorer regions, might represent an effective way to intervene quickly to improve child well-being.Global economic crisis, child poverty, hunger, education, child labour, health, West and Central Africa, Ghana, social protection

Simulating the Impact of Climate Change and Adaptation Strategies on Farm Productivity and Income: A Bio-economic Modeling Analysis

This study applied at the farm level in Tunisia aims at understanding the effects of climate change on agricultural productivity and income in Africa. Possible future climates are presented through different climate scenarios. The latter combines three levels of increasing temperature (1°C, 2°C, and 3°C) with two levels of decreasing precipitation (10% and 20%) and a doubling of carbon dioxide concentration in the atmosphere (350 to 700 parts per million). The farming system of production is replicated through a bio-economic model, i.e. coupling a cropping system model and an economic model run sequentially. The study reveals that land productivity and farm income decline under climate change. Depending on the changes in precipitation, farm productivity falls by about 15 to 20% and its income about 5 to 20% when the temperature increases moderately (1°C). As the climate warms up (2°C and 3°C), farm productivity and income are severely affected, by about 35 to 55%, and 45 to 70%, respectively. When simple adaptation strategies based on new management techniques are tested for hard wheat – more irrigation and fertilization, and delay in sowing dates - compensations for the negative effects of climate change are found to be worthwhile only for a 1°C increase in temperature. However, the success of adaptation strategies highly depends on the availability of more water and lower additional cost to mobilize them at farm level

Impact of COVID-19-related global trade disruptions on African food systems

The COVID-19 pandemic is affecting national economies through several channels including global primary commodity trade and market disruptions. Countries have been affected by many of the measures taken to adapt to and control the spread of the disease. Measures enacted in response to the pandemic have had a major impact on both the demand for and the supply of commodities. They have reduced the availability of air cargo and shipping services, induced changes in port and airport operations, and impacted international trade and market access conditions. On the demand side, the net effect is likely to be negative in the short term, with a decrease in the global population’s propensity to consume and a decrease in intermediate consumption by firms.PRIFPRI4; 1 Fostering Climate-Resilient and Sustainable Food Supply; 2 Promoting Healthy Diets and Nutrition for all; Feed the Future Initiative; ReSAKSSAF

Simulating the Impact of Climate Change and Adaptation Strategies on Farm Productivity and Income: A Bio-economic Modeling Analysis

This study applied at the farm level in Tunisia aims at understanding the effects of climate change on agricultural productivity and income in Africa. Possible future climates are presented through different climate scenarios. The latter combines three levels of increasing temperature (1°C, 2°C, and 3°C) with two levels of decreasing precipitation (10% and 20%) and a doubling of carbon dioxide concentration in the atmosphere (350 to 700 parts per million). The farming system of production is replicated through a bio-economic model, i.e. coupling a cropping system model and an economic model run sequentially. The study reveals that land productivity and farm income decline under climate change. Depending on the changes in precipitation, farm productivity falls by about 15 to 20% and its income about 5 to 20% when the temperature increases moderately (1°C). As the climate warms up (2°C and 3°C), farm productivity and income are severely affected, by about 35 to 55%, and 45 to 70%, respectively. When simple adaptation strategies based on new management techniques are tested for hard wheat – more irrigation and fertilization, and delay in sowing dates - compensations for the negative effects of climate change are found to be worthwhile only for a 1°C increase in temperature. However, the success of adaptation strategies highly depends on the availability of more water and lower additional cost to mobilize them at farm level