Faces of the Crisis
| Pages | 38-45 |
Page 39
One Crisis, Six Lives
SIX people in six different countries. They have never met each other, and most likely never will, but they all have one thing in common. Together with millions of others, they have become the innocent victims of the financial panic that swept the world following the demise of U.S. investment bank Lehman Brothers on September 14, 2008.
Their stories, told here in their own voices, illustrate better than any economic analysis just how integrated the world is today, and how intertwined our fates have become as a consequence. Their stories also confirm that, sadly, the poor and less well-educated usually suffer the most and have the least ability to resist an economic downturn.
The social cost of the crisis is set to keep rising for some time. Unemployment -the symbol of the Great Depression- will get nowhere near the levels of the 1930s. But, as a lagging indicator, unemployment worldwide is still expected to go on increasing well into 2010. The International Labor Organization thinks that as many as 50 million people could lose their jobs before this is all over. Of course, in emerging and low-income countries, where social safety nets are weak or nonexistent, the human cost from unemployment is even higher. Where it can, the IMF is encouraging governments to step up protection for the poor and most vulnerable.
Six people, six lives, all turned upside down by one global economic crisis. One Crisis, Six Lives
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Francette Picard, 57, a single mother, supports herself and her two daughters with the monthly remittances received from her cousin, claude Bruno, who lives in the United States. Before the economic crisis, she would receive about $250 a month. That has now shriveled to an occasional $30–60.
“He would send me money to pay for school and he would also send us food, but since the economic problems, he hasn’t been able to do that,” she says. “He called me to say that (it is) because things are difficult for him over there. In one week he might work three days and then have one or two weeks without working.”
After years of double-digit growth, the World Bank is predicting a worldwide drop of 7–10 percent in remittance flows this year. Haiti has so far bucked the trend in Latin america and the caribbean of declining remittances, but the outlook remains precarious for the small caribbean country.
“Thankfully, the fall in remittances is not as bad as we expected, but with the population in Haiti growing at 2 percent a year, it is not going to be a good year,” said corinne Delechat of the International Monetary Fund. “remittances are the one thing that keep many families going in Haiti.”
Money sent home by Haiti’s sizable diaspora represents the single largest source of foreign currency for the country and makes up over a quarter of its GDP, according to the Inter-american Development Bank. The amounts remitted are typically small—perhaps $100 a month—but in 2008, they totaled $1.25 billion, 2!/2 times the value of exports. The money is used to meet basic needs like food, housing, and education.
Just over an hour’s flight from the United States, Haiti is the poorest country in the western hemisphere. Its recent history has been pockmarked by violence, political instability, scarce resources, and natural disasters. According to the United nations, 80 percent of the population live on $2 or less a day.
Earlier this year, analysts were predicting that Haiti, like the rest of the world, would see a sharp fall in remittances off the back of the economic slump in north america—home to the majority of the two million Haitians living abroad. Contrary to expectations, however, the level of remittances not only remained steady, but has even seen a slight increase.
“Haiti is a country of such profound need that relatives abroad know the alternative if they stop sending money, so they are even more conscious of the need to send,” says Gregory Watson of the Inter-american Development Bank.
It is this that drives Picard’s cousin, claude Bruno, to continue sending money, despite his own needs. At an age when many of his peers have started to think about retirement, the 61-year-old spends 8 hours a day in a hot, damp room washing dishes for the inhabitants of a nursing home in new Jersey.
The global slowdown and the 9.5 percent unemployment rate in the United States is causing immigrants there to send less money to family throughout Latin america and the caribbean. Analysts believe the sustained level of support to Haiti could be because the remittances are typically small, and so are more likely to be immune to fluctuating personal circumstances, while those sectors in which Haitian migrants are concentrated, such as the service sector, have been less affected by the downturn.
That is small comfort for Francette Picard who is facing eviction from her home and resists going to the doctor to get treatment for headaches brought on by stress. “after midnight, I cannot sleep until the sun rises for thinking. Sometimes, I ask myself: What am I going to give to the children in the morning? I have to make their lunchboxes but you can’t sleep when you don’t have a penny.”
Francette instinctively pinpoints her plight, and that of many of her fellow Haitians, with the outlook in the United States.
“We are completely lost, because without the United States, we in Haiti cannot live. It’s the diaspora which supports this country.”
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Ignace Koffi Kassi is a man who usually maintains a bright outlook on life. But ask him about his livelihood, farming cocoa, and you know he is preoccupied. “It is not easy to prosper as a cocoa planter in côte d’Ivoire. Conditions are very difficult,” he says.
Kassi, a big man, his muscles shaped by wielding a machete every day, is the father of 7 children. “But when I add it all up, I have at least 15 people dependent on me,” he says. In an attempt to supplement his income, he recently diversified his crop by planting oil palms and rubber trees.
Once one of the most prosperous countries in West africa, côte d’Ivoire, a country of 19...
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