Dennis PainDFID Social Protection Team Leader 26 March 2009UNICEF Staff Conference, Montreux

1 Palace Street, London SW1E 5HEAbercrombie House, Eaglesham Road, East Kilbride, Glasgow G75 8EA

Protecting the poorest: A global response to

a global crisis

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• Threatens progress made towards the MDGs • At least 90 million more people living in poverty

each year after 2010 than had been previously anticipated

• Sources of financing for development and growth affected by the unprecedented scale and coverage of the crisis

• In trade finance alone, initial estimates point to a $25 billion shortfall, although the true figure could be much higher

• It’s the world’s poorest who will be hit hardest – although delayed impact on low-income countries

• Irreversible impacts e.g. maternal and infant nutrition, basic education

• Threats to core labour standards from increasing child labour and informalisation

• Risk of social/political instability

1 Palace Street, London SW1E 5HEAbercrombie House, Eaglesham Road, East Kilbride, Glasgow G75 8EA

Impact of the global downturn

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G20 Context

• Fiscal stimulus packages provide domestic context

• Seeking to protect the poor in the poorest countries through a new responsive mechanism

• IMF (March 2009) recognises strength of transfers to the poor as a broader economic stimulus, given their higher marginal propensity to consume

• Aim to build the framework for providing future timely alerts and global support for protecting the poor from shocks and including them in growth opportunities

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World Bank Vulnerability Approach

Bank recapitalization

The World Bank Group Vulnerability Framework

Infrastructure Recovery Assets Platform (INFRA)

IFC Private Sector Platform

IDAFast Track

Rapid Social Response

INFRA Infrastructure Facility

Energy for the Poor

Vulnerability Financing Facility

GFRP

Bilateral Organisations

Non-Governmental Organisations

United Nations Organisations

Multilateral Development Banks

Vulnerability Fund: 0.7% Fiscal Stimulus Packages

Trade Finance

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Responding to vulnerability

The World Bank Group Vulnerability Framework

Infrastructure Recovery Assets Platform (INFRA)

INFRA

Energy for the Poor

IFC Private Sector Platform

Infrastructure Facility

Trade Finance

Bank recapitalization

Microfinance Facility

Vulnerability Financing Facility

GFRP

IDA Fast-Track

Rapid Social Response Fund

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The Vulnerability Financing Facility

Vulnerability Financing Facility

GFRP

IDA Fast-Track

Rapid Social Response Fund

Three key areas of vulnerability response:

Agriculture – main livelihood for the majority of the world’s poor

Programs to protect investment in longer term development in the poorest countries

Employment, safety nets and protection of basic social services to help the poor and vulnerable households cope with the crisis

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The Rapid Social Response Fund

Why support a new fund?

What will it do?- promote employment;- provide social safety nets; and- protect basic social services

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What next?

• The Bank is ready to move quickly to make RSRF operational and we have committed £2 million to help with this

• Several countries have indicated they are likely to pledge financial support for the RSRF at the London Summit

• Launching of the RSRF will be the most effective way to supplement funding for middle and low-income countries with existing social protection programmes – as well as helping establish new programmes where countries do not have well targeted safety-net programs established

• The RSRF will be in place soon, but opportunity exists for donors to influence design, and early response work.

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Regional & Country Preparedness & Response

• Countries ideally prepare for a crisis before onset – Indonesia better prepared than in East Asia financial crisis a decade ago

• But it is never too late to prepare – simple affordable mechanisms can be refined later

• Many low-income countries have extensive capacity to develop effective social protection responses – African Union 2009 Social Policy Framework promotes social protection and African Civil Society Platform for Social Protection builds consensus; ASEAN builds on existing strengths

• Even more have some capacity, developed through small-scale pilots that introduce social protection technologies to the country – useful South-South learning