Robust social investment prog-rammes should be enacted to effectively stimulate the global economy and mitigate the impacts of the financial crisis on workers, women and the poor, according to the international civil society network Social Watch in its 2009 report.
This will not only satisfy criteria of social justice but is also sound economic policy, states the report, entitled 'Making finances work - people first'. The report was launched globally by Social Watch International and locally by the Social Watch national focal point - Koperazzjoni Internazzjonali (Kopin - Malta).
'People First' includes a wide number of in-depth reports from grassroots civil society organisations, which prove that the poorest countries played no part in causing the crisis, yet are experiencing its worst effects. The exclusion of these countries from forums such as the G20 creates a further obstacle to implementing just social policies.
The Social Watch report offers documentation from citizen organisations in 61 countries on the social impacts of the financial crisis and concrete policy proposals from civil society on how to counter it in a just and effective way.
According to country reports in People First, job cuts, falling revenues of private pension funds and lower levels of remittances are contributing to a drop in the standard of living for people in rich and poor countries alike. However, developing countries are bearing the brunt of the impacts of the crisis, which further threatens their fragile economies and cuts off vital sources of foreign aid.
In countries such as Tanzania and Mozambique, economic recession in donor countries is putting at risk vital aid programmes, which fund 42 per cent and 50 per cent of the respective national budgets. In the Middle East, increasing costs for food staples and falling prices of oil have pushed 43 per cent of the Yemeni population into poverty.
The impacts of the economic crisis in the least-developed countries are more severe, as they add to the effects of institutional and political crises that plague these nations. For example, in Somalia, the lack of a functioning central government, combined with drought, galloping inflation and spiralling levels of violence has led over 850,000 people to flee the country even before the world financial crisis hit.
The Malta report, penned by Joseph Sammut from Kopin, states that although the Maltese economy seemed at first to be shielded from the global economic crisis, the effects began to be felt.
During the year's first two quarters, the Maltese economy seemed largely sheltered from the effects of the financial crisis. Growth continued to be driven by domestic demand, primarily in the form of higher consumption expenditure and a sharp accumulation of inventories.
Conditions in the labour market remained favourable, with the private sector continuing to fuel job creation. There was a slight increase in employment (1.3 per cent), while the unemployment rate remained stable at a relatively low six per cent.
However, net exports contributed negatively to growth for the third and fourth quarters. The rise in international food and fuel prices resulted in higher consumer prices and inflation.
The dramatic rise in 2008 of the world market price of oil ($147/bbl) was reflected in higher prices of fuel, electricity and especially water, as Malta generates a substantial amount of this using reverse osmosis plants.
The issue of utility bills requires a proper socio-economic study that is based not only on global or average figures, but also on budgetary surveys of different types of households, businesses and organisations. Such a study should also offer viable recommendations on sustainable energy scenarios in Malta. The global slowdown began to be felt at the beginning of this year, when many manufacturing companies brought in a four-day week and others announced redundancies to reduce their workforce and financial losses.
Malta's report also deals with the government's Overseas Development Policy (published in 2007), which identified five priority countries for Maltese development aid, four of which are in central and eastern Africa: Somalia, Sudan, Eritrea and Ethiopia. Maltese NGOs believe this is a political choice since most immigrants come from these countries, mainly from Somalia.
The lack of transparency and of timely and independent evaluations of official Maltese aid compromises the engagement of NGOs on development cooperation issues. The government has promised NGOs a clear analysis of figures in reporting on official development assistance (ODA), but this has yet to happen. Although in 2007 Malta continued to have the highest ratio of ODA to Gross National Income (0.15 per cent) in the EU, NGOs are concerned that a substantial share of reported ODA was spent on housing asylum seekers in their first year in the country. In practice, this means that aid money is being spent on detention centres. NGOs are also worried that aid is inflated by the inclusion of imputed student costs.
The report claims the detention of asylum seekers was not consistent with international human rights law and described the conditions at the Safi and Lyster Barracks camps as "appalling".
The autumn 2008 Eurobarometer indicates that the Maltese are becoming increasingly pessimistic about the economy; trust in the political establishment is dwindling and expectations of an improvement in the quality of life are going down.
The full Social Watch Report, including the Malta page report, can be found at www.socialwatch.org. For more information e-mail kopin@maltaforum.org.