Dennis Pain DFID Social Protection Team Leader 26 March 2009 UNICEF Staff Conference, Montreux

1. Protecting the poorest: A global response to a global crisis Dennis Pain DFID Social Protection Team Leader 26 March 2009 UNICEF Staff Conference, Montreux 1 Palace Street, London SW1E 5HE Abercrombie House, Eaglesham Road, East Kilbride, Glasgow G75 8EA

2. Impact of the global downturn • Threatens progress made towards the MDGs • At least 90 million more people living in poverty each year after 2010 than had been previously anticipated • Sources of financing for development and growth affected by the unprecedented scale and coverage of the crisis • In trade finance alone, initial estimates point to a $25 billion shortfall, although the true figure could be much higher • It’s the world’s poorest who will be hit hardest – although delayed impact on low-income countries • Irreversible impacts e.g. maternal and infant nutrition, basic education • Threats to core labour standards from increasing child labour and informalisation • Risk of social/political instability 1 Palace Street, London SW1E 5HE Abercrombie House, Eaglesham Road, East Kilbride, Glasgow G75 8EA

3. G20 Context • Fiscal stimulus packages provide domestic context • Seeking to protect the poor in the poorest countries through a new responsive mechanism • IMF (March 2009) recognises strength of transfers to the poor as a broader economic stimulus, given their higher marginal propensity to consume • Aim to build the framework for providing future timely alerts and global support for protecting the poor from shocks and including them in growth opportunities

4. World Bank Vulnerability Approach Vulnerability Fund: 0.7% Fiscal Stimulus Packages Bilateral Organisations United Nations Organisations Multilateral Development Banks Non-Governmental Organisations The World Bank Group Vulnerability Framework Vulnerability Financing Facility Infrastructure Recovery Assets Platform (INFRA) IFC Private Sector Platform GFRP IDA Fast Track Rapid Social Response INFRA Infrastructure Facility Trade Finance Energy for the Poor Bank recapitalization

5. Responding to vulnerability The World Bank Group Vulnerability Framework Vulnerability Financing Facility GFRP IDA Fast-Track Rapid Social Response Fund Infrastructure Recovery Assets Platform (INFRA) INFRA Energy for the Poor IFC Private Sector Platform Infrastructure Facility Trade Finance Bank recapitalization Microfinance Facility

6. The Vulnerability Financing Facility Three key areas of vulnerability response: Vulnerability Financing Facility GFRP IDA Fast-Track Rapid Social Response Fund Agriculture – main livelihood for the majority of the world’s poor Programs to protect investment in longer term development in the poorest countries Employment, safety nets and protection of basic social services to help the poor and vulnerable households cope with the crisis

7. The Rapid Social Response Fund Why support a new fund? What will it do? - promote employment; - provide social safety nets; and - protect basic social services

8. What next? • The Bank is ready to move quickly to make RSRF operational and we have committed £2 million to help with this • Several countries have indicated they are likely to pledge financial support for the RSRF at the London Summit • Launching of the RSRF will be the most effective way to supplement funding for middle and low-income countries with existing social protection programmes – as well as helping establish new programmes where countries do not have well targeted safety-net programs established • The RSRF will be in place soon, but opportunity exists for donors to influence design, and early response work.

9. Regional & Country Preparedness & Response • Countries ideally prepare for a crisis before onset – Indonesia better prepared than in East Asia financial crisis a decade ago • But it is never too late to prepare – simple affordable mechanisms can be refined later • Many low-income countries have extensive capacity to develop effective social protection responses – African Union 2009 Social Policy Framework promotes social protection and African Civil Society Platform for Social Protection builds consensus; ASEAN builds on existing strengths • Even more have some capacity, developed through small-scale pilots that introduce social protection technologies to the country – useful South-South learning