This UK report pulls together the key findings from a series of recent research reports which explore the potential impacts of the current economic crisis on developing countries. 

Much of the developing world is now beginning to suffer the impacts of the global economic crisis. In the Asia-Pacific region the countries expected to suffer the greatest impact are those with recent rapid labour force growth and slowing economies that are heavily reliant on exports. In the case of Sub-saharan Africa, the most affected countries are likely to be those whose economies are highly dependent on primary commodities, especially when combined with poor governance and weak state institutions. Declining investment in and demand for commodity exports and services has already resulted in the cancellation of projects, cutbacks in mining and other industries, and resultant rises in unemployment.

There are concerns that some governments will be unable to provide social safety nets, and may cut back spending on social services and infrastructure, because of the devaluation of reserves, falls in revenues, and potential cuts in foreign aid. In the longer term, reorientation away from productive export sectors towards lower productivity sectors, and decreasing investment in infrastructure may negatively impact future growth prospects and poverty reduction. The combination of drops in real wages, unemployment, rising food and fuel prices, the retrenchment of migrants and reductions in remittances are resulting in insufficient income for food and other necessities, increasing malnutrition and susceptibility to illness and disease. With sustained low incomes, households may be forced to sell assets, including ones upon which their livelihoods are based. Additional concerns include increases in youth employment, the withdrawal of children from education, and the threat of increased child labour.

Those most at risk are the poor, women labourers in the manufacturing sector, the youngest and oldest populations, and socially excluded groups. Many women, for example, work in export processing zones, or in industries with very low wages, poor working conditions and no job security. They also tend to bear the responsibility of caring for the sick, older persons and children, and suffer most from the decline in food resources by eating least and last.