Two decades of neoliberal economic policies have left the country in an extremely vulnerable situation in the face of the global economic crisis. Deteriorating social, economic, political and environmental conditions, social and labour market exclusion, falling remittances and rising prices of basic goods are just some of the devastating effects. Although part of the problem has been the high degree of dependency on the United States, political changes in both countries could make this very dependency conducive to finding a way out.
The food price crisis in 2008 showed that after decades of paying no attention to its agricultural sector, Egypt lacks food sovereignty. Today the Egyptian economy is beginning to feel the impact of the global crisis. The drop in remittances and the return of émigrés has put pressure on a labour market badly prepared to absorb more unemployed workers. The Government has adopted measures to promote investment and economic recovery. While these are long overdue, it remains to be seen whether they can deliver the needed stimulus before rising unemployment and lack of food security lead to widespread social unrest.
Last year President Vaclav Klaus proclaimed that the country was living in its prime, with a “faith in today”. That euphoria is now evaporating as the economy begins showing signs of weakness. Reforms in public finances, such as lower taxation for the wealthiest and increasing the value added tax (VAT) on basic articles, have created new burdens for poor. Conditions of some marginalized groups such as the Roma have become so difficult that they are emigrating. On a positive note, the country has made some progress – though not enough— in bridging the gender gap,
The global economic crisis will damage tourism and real estate, two of the country’s major industries, and raise unemployment levels. Government measures taken to alleviate the crisis will not benefit some of the most vulnerable sectors of society. The Government should open the way for civil society to provide assistance, specifically NGOs that are in close contact with all sectors of society. This would require reform of the legal and regulatory framework regulating NGOs.
Costa Rican society has been witnessing the confrontation between two opposing ways of perceiving and projecting the country. While some sectors advocate a market model, others expect the Welfare State to deal with matters such as the social, economic and cultural rights of the population. The crisis and the possible ways out of it constitute the new arena in which these two visions collide. While the Government proposes a package of measures which seems diffident and overdue, civil society stands behind stronger social and productive intervention.
While recession and unemployment advance, pension funds are depleted and income drops, the Government puts pressure on wages in order to expand the economy. The unions and civil society propose other solutions: workers defend their wages, rights, funds and the right to decent work for all, and NGOs stress the need to build together an economy that prioritizes people and the planet.
Instead of diminishing, poverty has increased significantly in the Central African Republic since 1990. The disturbances, looting and destruction that accompanied the rebellion that placed General François Bozizé in the presidency ruined the already weak economy. While the Government is proposing a strategy for poverty reduction, it is unlikely that this will succeed in reducing poverty in half unless the country is able to chart an immediate and lasting change of direction towards peace and security, accompanied by an exceptionally high level of growth benefitting the poor.
Budget 2009 was an opportunity for the Government to lessen the blow of the recession by focusing on the most vulnerable citizens, but political jockeying led to a short-sighted economic stimulus plan that does not meet the needs of the thousands of citizens feeling the brunt of the crisis. Jobs being created by Government investments are in male-dominated industries, while women are over-represented in part-time and precarious work and are often the first to be laid off. Civil society organizations are concerned that, as Canada focuses on reversing the economic downturn, environmental and sustainability standards will drop.
In the countries of the global South, as in those of the North, political parties dedicate all their energies to contesting elections that will enable them to control the spaces of power. Very often these spaces are used to perpetuate government by oligarchies in which nepotism, corruption and personality cults are rampant. In the face of this, peoples’ movements and organizations are the only force capable of promoting real political change that goes beyond electoral platforms and that can genuinely empower the people, teaching them not just how to attain power but how to “be” the power.
The fact that one of the risks inherent to the capitalist system – the over-production of capital derived from attempts to counteract the fall of profit rates by means of an increase of the reserve rates – has come to pass is evidence of the structural nature of the current economic crisis. This not only disproves the theory that a lack of state regulation of financial capital brought about the crisis but also calls for responses beyond those applied to date: essentially, increasing public debt in order to buttress corporate balance sheets.
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