The no-wealth factor

PUBLISHED : Friday, 30 January, 2009, 12:00am
UPDATED : Friday, 30 January, 2009, 12:00am

Let's put the global economic crisis into perspective. The headlines scream that governments are bailing out financial institutions, companies are going bust, share prices are collapsing, workers are being laid off and housing values are tumbling. This is worrying, but the concern is not shared by the vast majority of the world's people. The reality is that most do not have bank savings, shares, their own homes or salary-paying jobs.

Take a trip to any non-industrialised country and you will see what I mean. These nations account for three-quarters of the world's people. Amid all our luxury and glitz, it is easy to forget that almost half of the total 6.7 billion population live on less than US$2.50 a day and, for 80 per cent, US$10; that the poorest 40 per cent account for just 5 per cent of global income. For these people, talk of financial turmoil is met with a shrug, a frown and a confused: 'Crisis? What crisis?'

Put in a nutshell, no matter how bad the international financial system is, the poor can't get any poorer. Four out of 10 do not have adequate sanitation, almost one in six did not get enough education to be able to read and write and a quarter of humanity live without electricity. They couldn't care less if banks are going under. Fridges, flush toilets and televisions are on their list of wanted possessions, but they are not must-haves.

An article in Tuesday's edition of the Vientiane Times brought this plainly home to me. Somchit Souksavanh, a senior economics professor at the National University of Laos, told the government-run newspaper that the agriculture-based, self-sufficient nature of the communist country's economy would protect it from the global meltdown. Laos was at an advantage, he crowed, because more than 70 per cent of people lived off the land by growing vegetables and raising poultry and livestock for their own consumption. An essentially closed-door policy towards global markets meant that there would be limited effect to the downturn in international demand for agricultural products.

Laos is among the world's 10 poorest countries. Mr Somchit acknowledged that his nation's industrialisation drive would suffer a setback as a result of the meltdown. There was a clear upside to being agriculture-based, though. People in industrialised countries were fearful of losing jobs and not having enough money to buy food and pay rent; that was certainly not happening in Laos.

Nor would it seem to be the case for the majority in countries like the Philippines, which I recently visited. Thousands of people are losing their jobs as foreign-owned factories shut their doors. But the jobs-wanted signs on shop fronts are a telltale sign that work has never been easy to come by.

Here is one from the front window of a branch of Pizza Hut, in Calamba City, a few hours' drive south of Manila: 'Qualifications - 18 to 25 years old, at least 160cm tall for females, 165cm for males, must be at least in second year of college in any three-to-five-year course, maximum of 18 units currently enrolled, good communications skills, with pleasant personality, smart and aggressive.' So, basically, if you don't have the money to go to university, are not young, tall, good-looking and a linguist, you can't even get a job waiting on tables.

A report by the UN agency the International Labour Organisation this week rang alarm bells about the global job situation. The best-case scenario if financial turmoil persisted through this year was that 18 million people would lose their jobs; the worst that 51 million extra people would be out of work. Most realistically, 30 million would be sacked, pushing the world's unemployment rate to 6.5 per cent from 6 per cent last year. There was a threat of social unrest, it said.

Disconcerting stuff for those of us with a job and dependent on it to pay our children's school fees, broadband charges, and bar and restaurant tabs. Keep in mind, as we worry about job security though, that the meltdown is a problem only for the lucky ones of the world. Most of humanity is not even aware that there is a crisis.

Peter Kammerer is a senior writer at the Post