Monday, October 19, 2009

Social impact of economic crisis documented for the first time

At the end of this summer we started to receive intermittent reports from around Europe about more and more people coming to the local branches of the Red Cross for help. This in itself is not so unusual but we were witnessing a sudden upsurge in people not normally associated with seeking social support, namely middle classes. 

The indicators were such that we conducted a survey of some 50 national red cross or crescent societies across the EU, Eastern Europe and Central Asia and this culminated in a report which we launched today in Geneva to political and media circles. The report is best described as a 'barometer' of what we are witnessing in towns and communities across the region. It is an 'early warning' for policy makers at the national level to take into account.

As the data started to come in from our grassroots network certain trends became quickly identifiable such as:

  • Social and humanitarian needs are escalating as the resources needed to deal with them steadily decrease or, in many cases, simply evaporate.
  • Youth are identified as a particularly vulnerable group, mainly due to increasing inability to access labor markets - related to this is a clear rise in demands to enlist in Red Cross substance abuse and psycho social programs.
  • Social cohesion is under a stress not seen for decades mainly due to the fact that less privileged groups are now competing for scarcer services and, on top of this, more and more families are becoming 'newly' vulnerable and in need of external support from the Red Cross or similar organizations.
  • Development gains made across the whole region during the last decade stand to be completely lost. And this is as true for 'developed' economies as less developed ones.
All of this is underscored by the fact that there are almost 50 million people (including dependents) newly affected by unemployment across the euro zone alone. As mentioned youths are particularly at risk - in Sweden for example the unemployment rate for working-age youths has jumped three fold from 9% to almost 30%.

Incredibly, in the European Union we learned that more than two thirds of our member national red cross or crescent societies are now distributing food aid; an activity more associated with post-war Europe and food insecure Africa or Asia. In Spain for instance, more than half a million people receive essential food aid today from the Spanish Red Cross.

Furthermore, groups already vulnerable or marginalized, such as migrants for instance, are under considerable pressure to just survive and while 'reverse' migration is a reality for some, others are faced with the stark choice of emigrating to more robust economies.

The challenge now is to work together with national governments so that they can reassess the criteria they use for identifying vulnerable groups - current structures are no longer relevant in the new reality and groups such as youth and indebted middle-income families must also be considered for support and assistance either through domestic programs or with non-governmental humanitarian groups.

Interesting too were the reactions from our governmental partners today who noted the 'timeliness' of the report which focuses on social consequences (as opposed to economic consequences) of the financial crisis - a component of the global crisis which has been "curiously under communicated" according to one diplomat.

We now aim to follow up individually with governments, through existing national structures, to improve our understanding of this new vulnerability and to ensure that the response is timely and effective, especially as the severe European winter looms in the near distance.



  1. Great report. How long do you see this trend / need lasting? I know E. Europe is harder his economically so is this likely to last into 2011 or longer?


  2. Very difficult to say Leon. A long while bakc we predicted a "jobless recovery"
    meaning the economies would recover but ordinary people would still suffer. I know for a fact that many businesses in the former societ union are paying as little as 20 per cent of salaries, the rest will be paid some time in the future. What's most worrying is the lack of investment in things like healthcare systems and education, when there is a rela threat of a massive flu pandemic. Even if there was no recession, industry would be hard hit. And take a look at the geopolitical factors, the gas wars/milk wars/wine wars etc etc