Social Policy and Economic Analysis Unit, PAKM UNICEF Policy and Practice Group gfajth@unicef

1. Enhancing UNICEF’s Economic Crisis Response:A Policy Strategy Emerging from the Montreux Discussions Social Policy and Economic Analysis Unit, PAKM UNICEF Policy and Practice Group gfajth@unicef.org jchai@unicef.org rmendoza@unicef.org New York 14 April, 2009 PD Technical Staff Meeting, Labouisse Hall

2. The structure of the presentation • UNICEF’s Consultative Workshop in Montreux • The global economic crisis • A child and gender-centered socioeconomic crisis response: a “social protection plus” strategy • Building blocks: next steps for “SP+” • Concluding remarks

3. 1. Background on ‘Montreux’ • A UNICEF Consultative Workshop with over 40 participants from all major regions plus Brussels, Geneva, Florence and New York offices, 25-27 March 2009, Montreux, Switzerland • See agenda, participants and key documents at intranet webpage: http://intranet.unicef.org/dpp/PolicyAdvocacy.nsf • Purpose: help coordinated rolling out UNICEF’s Focus Area 5 ‘Policy Advocacy and Partnerships for Children Rights’ • the UNICEF-UNIFEM Side Event at the Follow-up International Conference on Financing for Development to Review the Implementation of the Monterrey Consensus, Doha, November 2008 • earlier consultations: the “Pratolino” process and the September 2008 UNICEF Executive Board special focus session • UNICEF’s 2006-2011 Strategic Priorities following the 2008 mid-term review cast child poverty, social budgeting and social protection as priority areas for analysis and advocacy

4. 1. Background on ‘Montreux’ (cont’) • Innovation • the first ever meeting of UNICEF’s emerging global network of socioeconomic policy specialists • focus on the economic crisis • ILO, WHO and academia invited for discussion on social protection • Outcomes • agreement on the main thrusts of a ‘social protection plus’ strategy to contain crisis impacts on children and women • delivered by concrete follow-up steps in five main areas • Monitoring the impact of the crisis • Building crisis-related analysis and evidence • Policy advocacy strategy • Strengthening capacity for socioeconomic policy engagement • Enhancing knowledge management • with the purpose to turn the crisis into an opportunity for countries to address long-standing barriers to progress for children.

5. 1. Background on Montreux: the six sessions • Session 1. Introduction and review on the economic crisis • Session 2. Partnerships • Session 3. Stocktaking on FA5 • Session 4. Crisis response: enlarging policy space • Session 5. Crisis response: social protection for children and women • Session 5. Linking building blocks for a strategy • Session 6. Concluding session

6. 2. The global economic crisis

7. 2. This economic crisis is more than just a recession • Progress in Financing for Development (FfD) action between 2002-2007 • Private capital flows (especially FDI)  GOOD PROGRESS • Trade as engine of growth  PROGRESS • Increasing international cooperation (Aid/Debt)  PROGRESS • Domestic resources mobilization  UNEVEN PROGRESS • Systemic issues (monetary, financial and trading systems)  LITTLE PROGRESS • What we see in 2008-2009 is a blackout in globalization • the financial crisis has turned former Monterrey ‘progress areas’ into transmitting channels of the downturn • ‘no progress areas’ impair national and global ability to respond! • Current projections: • Decline in net private capital flows from $900bn in 2007 to $165bn in 2009 • 6% drop in trade in 2009 • Drop in foreign aid • Drop in remittances NB. All projections are highly uncertain – 2010 may not actually be much better!

8. 2. Global economic crisis: transmission channels HOUSEHOLD ECONOMY WORLD ECONOMY NATIONAL ECONOMY GOODS & SERVICES TRADE Access to public services SHOCK PRIVATE INVESTMENTS Access to employment FOREIGN AID Access to financial services ♦ Overleveraged financial assets, weak regulation Boys/Girls OTHER LINKAGES COPING STRATEGIES (e.g. by women) Access to basic goods ♦ Imbalances in food and energy markets Other linkages ♦ Asymmetries in trade, capital and labour flows REMITTANCES ♦ Sustainability and equity issues around development Compounding factors: governance and institutions, culture and geography, climate change, technological change, demographic change etc.

9. 2. The global economic crisis: key points from the discussion in Montreux • This crisis is universal – no countries, no population groups will be spared from its effects • The concrete mix of transmission channels is region- and country specific • Apart from OECD, CEE/CIS (external financing, terms of trade) and Latin American countries (external demand) appear the most negatively affected currently • Economic growth projections were revised downward also for Africa: here currently +2.4% growth is expected in 2009 (are similar to the rate of population growth) • Without China and India developing countries on average will post no economic growth in 2009 • Countercyclical macroeconomic policy requires financing, fiscal space

10. 2. The global economic crisis: key points from the discussion in Montreux (cont’) • Fiscal space, reserves vary… reflecting FfD progress over 2002-2007 Source: World Bank. The index averages standardized indexes of debt/GDP, international reserves, fiscal deficit, current account balance, and reversible capital inflows using data for 2002-07.

11. 2. The global economic crisis: key points from the discussion in Montreux (cont’) • But some of the fiscal space has already been already used up to contain inflation fuelled by rising food and energy prices in 2008 Source: IMF, World Economic Outlook Database

12. 2. The global economic crisis: the IMF is becoming a key player again • Filling in holes left by shrinking private capital flows

13. 2. The global economic crisis: G20 fiscal stimuli Prasad and Sorkin March 2009 Brookings, Washington D.C.

14. 2. The global economic crisis: key points from the discussion in Montreux (cont’) • Some countries will pursue fiscal stimulus • UN/UNICEF monitoring, analysis and advocacy could help making the fiscal stimulus child and gender-sensitive • Others will need to undergo structural adjustment/receive IMF support • UN/UNICEF monitoring, analysis and advocacy could help protecting women and children • The depth and length of the global recession matters for the design of national macroeconomic policy strategies • Countercyclical/Keynesian policies create momentum for social protection • But caution is needed: the last thing we want is fragile states newly indebted! • Can we forge an alliance between IFIs and UN/UNICEF? • ‘New poverty’ versus ‘old poverty’: understanding of ‘vulnerability’ • Paradigm shift: state versus markets? More nuanced approach is needed • Need for evidence-based, child and gender sensitive social protection • Washington Consensus may survive as knee-jerk reaction in country contexts

15. 3. Crisis response: a “social protection plus” strategy • Three main strategy elements • Child and gender-sensitive social protection systems that keep focus on the protection and promotion objectives rather than on the instruments • Social and gender-sensitive budgeting for basic social services and social protection that considers urgency as well as longer-term trends and objectives (MDGs, climate change, demographic change, migration) • Multidimensional, engendered approach to child poverty focusing on investing in children (avoiding irreversible losses) • Implementation • Evidence-based, sustainable, concrete policy proposals at the country level in partnerships with governments and the international community  Strengthening national and sub-national monitoring and policy analysis • Advocacy and mobilization at the global level (Global Social Floor, Comprehensive Framework for Action, Vulnerability Facility)  Global Vulnerability Alert

16. 4. Building blocks: next steps for “SP+” • Monitoring the impact of the crisis • Short guiding note on practical field-based monitoring (Mahesh Patel, EAPRO and Jingqing Chai, DPP-PAKM) • Item to be addressed in the upcoming M&E meeting in April (Marco Segone, CEE-CIS and DPP/IRC) • Monitor aid flows (Margaret Wachenfeld, UNICEF Brussels and Bjorn Gillsater, GMA) • Building crisis-related analysis and evidence • Finalize the child-sensitive social protection statement and circulate with partners (Gaspar Fajth, DPP-PAKM) • Position paper on UNICEF’s policy response including its implications for work across FA1-5 of the MTSP (David Stewart, DPP-PAKM with PD colleagues) • Look into the new stimulus packages crisis related budget-adjustments (Ron Mendoza DPP-PAKM and Jingqing Chai, DPP-PAKM in coordination with ROs) • Policy advocacy strategy • Draft message from the Executive Director asking country offices to feedback on their activities related to the crisis (Richard Morgan, DPP)

17. 4. Building blocks: next steps for “SP+” (Cont’) • Social policy website / policy advocacy toolkit /list of forthcoming events (David Stewart, DPP-PAKM) • ‘2-pager’ on UNICEF policy advocacy that would leverage social/economic policy work (Juliana Lindsey, ACMA and Gordon Alexander, CEE-CIS) • Strengthening capacity for socioeconomic policy engagement • Review training programs and recommend a revised portfolio related to social policy (Tony Hodges, Gabriele Koehler ROSA, WCAR, Jingqing Chai, DPP-PAKM and Barbara Brown, HR) • Enhance fund raising activities (Jens Matthes, PFP, Gaspar Fajth, DPP-SPEA, Marco Segone, CEE-CIS) • Enhancing knowledge management • Webpage on the financial/economic crisis and “In Practice” and further set of actions aimed at knowledge sharing (Ian Thorpe, DPP-PAKM)

18. 5. Concluding remarks  our model on understanding social protection for children needs further thinking and elaboration… Social protection Health Social Welfare Family Support benefits, services Education Prevention Identification Referral Social Policy Violence prevention Referral Children in the justice system Child protection

19. 5. Concluding remarks (cont’)  The Programme Group’s contribution to UNICEF’s crisis response is essential! Thank you!