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Vulnerable households cope with difficult times in ways that have adverse consequences on human development, according to a study presented at the “Household Wellbeing and Food Prices” session of the sixth African Economic Conference, which ended in Addis Ababa on Friday.
The poor are more vulnerable to natural disasters, which are increasingly associated with climate change, and economic shocks. Such households cope with these shocks by drawing on individual, community, market and public resources.
The study covered thousands of households in predominantly poor areas of Kenya and the Philippines.
Some of the coping mechanisms identified in the study include selling of assets, borrowing, eating less and poorer quality food as well as spending less on medical needs and education.
“Such adverse outcomes become more likely during global crises, when many are affected at the same time (aggregate shocks), and some forms of community, market and public mechanisms may falter,” according to the study authored by Shantanu Mukherjee and Shinavi Nayyar of the United Nations Development Programme (UNDP).
Understanding these coping mechanisms, said the study, is important for policy-makers as they link the better observed, macro indicators of a crisis – such as declines in GDP growth, increases in unemployment and falls in export revenues – to longer term negative impacts such as extended periods of poverty, poor health, stunted children and poor educational outcomes.
“While many of these longer term consequences may be irreversible, understanding the coping mechanisms that lead to such outcomes may help in identifying a set of observable characteristics that can be monitored for timely assessment of the impact of a crisis at the household level, as well as helping devise policy interventions that could forestall negative long term effects.
The study recommended well-designed safety nets to mitigate the impacts of coping mechanisms that reduce the resilience of the vulnerable as well as monitoring coping behavior to gauge the long term impacts of shocks on the most vulnerable, including intra-household effects and policy interventions to forestall these impacts, including expanding and adjusting safety nets.
The world has seen two food price surges in 2007/08 and 2010/11. A study which surveyed 33 African countries, “The Food Price Spikes of 2008/09 and 2010/11: Country-level impacts and policy responses” by Pedro Conceição, Sebastian Levine and Zuzana Brixiov, UNDP Regional Bureau for Africa, showed that many of the countries had intervened by various means including import tariff cuts, price control, and food aid to address the needs of their vulnerable citizens.
As long-term solution, the study recommended investing in agriculture, deepening markets, coordinating policies nationally and regionally, reducing domestic market volatility and providing social protection to build resilience and raise productivity.
The four-day annual conference held on the theme: Green Economy and Structural Transformation, is attended by top government officials, economists, researchers, academics, business people, representatives of civil society, Non-governmental organisations and the media.