ePapers Repository

The impact of the financial crisis on conflict and state fragility in Sub-Saharan Africa

Bakrania, Shiv and Lucas, Brian (2009) The impact of the financial crisis on conflict and state fragility in Sub-Saharan Africa. Discussion Paper. University of Birmingham, Birmingham, UK.

[img]
Preview
PDF
EIRS6.pdf
686Kb

URL of Published Version: http://www.gsdrc.org/docs/open/EIRS6.pdf

Abstract

The global financial crisis was triggered by the bursting of the United States housing bubble in 2007 and the reverberations of this are now being felt throughout the world. The crisis was greatly exacerbated by the behaviour of banks, which has inevitably made the position of any country that has borrowed money worse off. Sub-Saharan Africa was largely insulated from the initial stages of the financial crisis as the majority of the countries in the region are de-linked from the international financial markets. However, with the worsening of the global financial and economic crisis, the region as a whole has now been exposed to the downturn, and growth estimates have been continually lowered from 5 percent in 2008 to 1.7 percent in April 2009 (IMF, 2009).

Many Sub-Saharan African countries are dependent on foreign finance inflows and are even more dependent on commodity based export growth (Naudé, 2009). This has left them particularly exposed to shocks and World Bank economists are warning that although Africa is the least integrated region, it could actually be the worst hit (Devarajan, 2009a). Given that Africa is already the most conflict ridden continent in the world, an exacerbation of resource scarcity could increase conflict across the continent.
Emerging markets (e.g. South Africa, Nigeria, Ghana and Kenya) were hit first through their stock exchanges and financial links with other regions in the world; but the crisis has now affected the region's lower income countries (LICs) through indirect channels and because they are reliant on the stronger regional economies for trade and remittances.

In addition to financial shocks, Sub-Saharan Africa is also reeling from the food and fuel price shocks of 2007-08. Many countries in the region are already making unsatisfactory progress in their efforts to achieve the Millennium Development Goals; this “triple jeopardy” has thrown millions of households into poverty and will further hinder progress (World Bank, 2009).

Type of Work:Monograph (Discussion Paper)
School/Faculty:Colleges (2008 onwards) > College of Social Sciences
Department:International Development Department
References:

Amnesty International, 2009, 'Amnesty International Report 2009: State of the World's Human Rights', Amnesty International: London.

Arbache, J. & Page, J, 2007, 'More Growth or Fewer Collapses - A New Look at Long Run Growth in Sub-Saharan Africa' World Bank Policy Research Working Paper Series, World Bank: Washington D.C.

Bertoli, S. & Sanfilippo, M., 2009, 'The Impact of the Crisis on Aid from DAC and non DAC Countries', Presentation made to the European Report on Development Conference, Accra, 21-23 May 2009.

Collier, P., 2007, 'The Bottom Billion', Oxford University Press: Oxford.

Collier, P. & Hoeffler, A., 2002, 'On the incidence of Civil War in Africa', Journal of Conflict Resolution, Vol. 46, No. 1, pp.13-28.

Collier, P. & Hoeffler, A., 2004, 'Greed and Grievance in Civil War', Oxford Economic Papers', Vol. 54, pp.563-95.

Conceição, P. & Kim, N., 2009, 'The Asymmetric Impact of Growth Fluctuation on Human Development: Evidence from Correlates of Growth Decelerations and Accelerations', UNDP/ODS Working Paper, UNDP: New York.

Cord, L. et al., 2009, 'The Global Economic Crisis: Assessing Vulnerability with a Poverty Lens', World Bank: Washington D.C.

Davies, M. & McGregor, J.A., 2009, 'Social Protection Responses to the Financial Crisis: What do we Know?', Policy Responses to the Global Financial Crisis, IDS In Focus Policy Briefing, Issue 7, March 2009.

Desai, R, 2009, 'Understanding and addressing political instability', The G-20 London Summit 2009: Recommendations for Global Policy Coordination.

EC, 2009, 'Weathering the economic crisis in Africa', Post conference press-release prepared for European Report of Development Conference, Accra, 21-23 May 2009, European Commission.

Gamo, P, 2009, 'The implications of the global financial crisis for low-income countries', IMF: Washington DC.

Haider, H., 2009, 'Economic Crisis and Sub-Saharan Africa', GSDRC Helpdesk Report, GSDRC: Birmingham.

Hossain, N. and Eyben, R., 2009, 'Accounts of Crisis: Poor People?s Experiences of the Food, Fuel and Financial Crises in Five Countries', Institute of Development Studies: Brighton.

IMF, 2009, 'Impact of the Global Financial Crisis on Sub-Saharan Africa', International Monetary Fund: Washington D.C.

Jackson, P., 2009, 'Why rebuilding states may not be enough: failed states, failed nations and the global recession', Draft paper prepared for Russian Government.

Khan, S., 2009, 'The Impact of Financial Crises on Conflict and Social Stability', Helpdesk Report, Governance and Social Development Resource Centre: Birmingham.

Massa, I. and Willem te Velde, D., 2008, 'The Global Financial Crisis: Will Successful African Countries Be Affected?', Overseas Development Institute, London

Mendoza, R., 2009, 'Aggregate shocks, poor households and children: Transmission channels and policy responses', UNICEF: New York.

McCulloch, N., Schmidt, A. & Sumner, A., 2009, 'The Global Financial Crisis, Developing Countries and Policy Responses', Policy Responses to the Global Financial Crisis, IDS In Focus Policy Briefing, Issue 7, March 2009.

Naudé, W., 2009,?Africa and the Global Economic Crisis: A risk assessment and action guide', Background Paper prepared for the Robert Schuman Centre for Advanced Studies, European University Institute, S.Domenico di Fiesole, Italy.

OECD DAC, 2009, 'Ensuring Fragile States are not left behind', Summary Report March 2009, OECD DAC International Network on Conflict and Fragility: Paris

Ravallion, M., 2008a , 'Bailing out the World?s Poorest', World Bank Development Research Group, Policy Research Working Paper 4763, Washington DC: World Bank

Ravallion, M., 2008b, 'Lessons from World Bank Research on Financial Crises', World Bank Policy Research Working Paper Series, World Bank: Washington D.C.

Rice, S. and Patrick, S., 2008, 'Index of State Weakness in the Developing World', Brookings Institution: Washington DC

Velde, D.W. et al, 2009, 'The global financial crisis and developing countries: Synthesis of the findings of 10 country case studies?. Overseas Development Institute: London.

Von Braun, J., 2008, 'Food and Financial Crises: Implications for Agriculture and the Poor', Brief prepared for the CGIAR Annual General Meeting, Maputo, December

World Bank, 2009a, 'Global Monitoring Report 2009: A Development Emergency', World Bank: Washington.

World Bank 2009b, 'Swimming Against the Tide: How Developing Countries Are Coping with the Financial Crisis', Background Paper prepared by for the G20 Finance Ministers and Central Bank Governors Meeting, 13-14 March, Horsham, UK

Collier, P, 2009 'A less developed crunch', Prospect Magazine. http://www.prospect-magazine.co.uk/article_details.php?id=10631

IRIN, 2009, 'Helping fragile states survive financial crisis', IRIN Humanitarian News and Analysis, UN Office for the Coordination of Humanitarian Affairs http://www.irinnews.org/report.aspx?ReportId=84390

Devarajan, S., 2009a, 'Africa least integrated but worst hit by the crisis', Africa Can Blog, World Bank http://africacan.worldbank.org/africa-least-integrated-but-worst-hit-by-the-crisis

Devarajan, S., 2009b, 'A sub-prime crisis on the US and infant deaths in Africa', Africa Can Blog, World Bank http://africacan.worldbank.org/a-sub-prime-crisis-in-the-us-and-infant-deaths-in-africa

Gazel, R., 2008, 'Angola perspectives on the financial crisis', Africa Can Blog, World Bank.

Mushobekwa, E., 2008, 'DR Congo perspective on the financial crisis', Africa Can Blog, World Bank http://africacan.worldbank.org/dr-congo-perspectives-on-the-financial-crisis

Ratha, D., 2009, 'Remittances expected to fall by 5 to 8 percent in 2009', People Move Blog, World Bank 9

Projects:Governance and Social Development Resource Centre
Series/Collection Name:GSDRC Emerging Issues Papers
Keywords:economic crisis, financial crisis, africa, sub-saharan africa, conflict, security
Subjects:H Social Sciences > HV Social pathology. Social and public welfare
H Social Sciences > HJ Public Finance
J Political Science > JF Political institutions (General)
Related URLs:
URLURL Type
http://www.gsdrc.orgOrganisation
Funders:AusAID
Copyright Status:Copyright 2009 University of Birmingham
Copyright Holders:University of Birmingham
ID Code:643

Export Reference As : ASCII + BibTeX + Dublin Core + EndNote + HTML + METS + MODS + OpenURL Object + Reference Manager + Refer + RefWorks
Share this item :
QR Code for this page

Repository Staff Only: item control page