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Sustaining Human Progress: Reducing Vulnerabilities and Building Resilience – Human Development Report 2014


Shocks and threats to human development s. 21

The threats to human development come from many different directions.

 

Economic risks

Millions of households live uncertain and insecure lives, facing a constant threat of shocks to their income and well-being. Lacking private savings, financial assets and sufficient protection through national policy, these households are exposed to financial crises and natural disasters. Economic insecurity can be high in developing countries, where a large proportion of employment is in the informal economy, lacking coverage from social insurance. The informal sector accounts for 25−40 percent of annual output in developing countries in Africa and Asia.2 But economic vulnerability is not a problem in developing countries only. Due to the slow recovery from the global economic crisis, many people in rich countries continue to face tremendous insecurity. In 2014 unemployment is expected to be more than 11 percent in France, around 12.5 percent in Italy and close to 28 percent

in Greece and Spain, with even higher rates among young people—almost 60 percent in Spain.

 

Inequality

The 85 richest people in the world have the same wealth as the 3.5 billion poorest people.4 Between 1990 and 2010 income inequality in developing countries rose 11 percent.5 Inequality in health and education has been declining but remains high, particularly in some regions. Sub-Sahara Africa has the highest inequality in health outcomes, and South Asia has the highest inequality in education.6 Inequality is a considerable threat to human development, particularly because it reflects inequality of opportunity.7 And beyond a certain threshold, it harms growth, poverty reduction and the quality of social and political engagement.8 High inequality also diminishes a shared sense of purpose and facilitates rent-seeking by influential groups.

Rent-seeking, directed towards getting a larger share of the pie rather than increasing its size, distorts resource allocation and weakens the economy. Inequality impedes future human development by reducing investment in basic services and public goods, lowering the progressivity of the tax system and raising the prospect of political instability.11 High inequality between groups is not only unjust but can also affect well-being and threaten political stability. When specific groups are discriminated against, resources and power are not distributed based on merit, and talented people are held back.

Such group inequality fuels dissatisfaction and grievances.

Health risks

Health shocks can be some of the most destabilizing to households and society, and hunger and malnutrition add to the high risks of poverty-related health threats. In India paying for health care has become a major source of impoverishment for the poor and even the middle class. Ill health of the main wage earner can push households into poverty and keep them there.

Recent data suggest that more than 40 percent of hospital patients either borrow money or sell assets and that close to 35 percent fall into poverty because of having to pay for their care.14 And making the lives of everyone vulnerable, not just the poor, are the HIV/AIDS epidemic, the accelerating spread of malaria and tuberculosis, the rapid spreads of dengue and swine flu, and the increasing threats of bioterrorism.

 

Environment and natural disasters

Global risks connected to the environment and climate change appear to be intensifying. Climate change will produce more droughts in arid regions and more-frequent and more-intense hurricanes, typhoons and other extreme weather phenomena. It will also lead to rising sea levels, flooding, water

scarcity in key regions, the migration or extinction of plant and animal species, and the acidification of oceans.15 Other environmental threats arise from extensive industrialization and rapid urbanization. In every country there are growing problems of scarce water, poor sanitation, degraded land, eroded soil, polluted air and threats to biodiversity. Climate change is adding to the variability in farm incomes and insecurity in livelihoods that depend on ecosystems.16 For example, pastoral communities in Western Niger have experienced the effects of prolonged drought combined with overgrazing, leading to the conversion of open woodland with perennial grasses to a mosaic of bare ground and unpalatable shrubs.

 

Food insecurity

High volatility in the prices and availability of food are of particular concern, given the large impact on poor people and poor countries. Following the 2008 global economic crisis, food price spikes and recession slowed the decline in the number of people worldwide suffering from hunger, which the Food and Agriculture Organization of the United Nations estimated at 842 million people in 2012.18 This serves as powerful commentary on the inadequacy of global efforts to eliminate hunger and reduce deprivations more broadly.

 

Physical insecurity

Conflict and war inflict shocks on society and human security. Greatly threatening lives and livelihoods are outbreaks of communal violence, attacks by terrorist groups, fights between street gangs and protests that turn violent.

And criminal and domestic violence adds to personal insecurity. The World Health Organization estimates that about 4,400 people die every day because of intentional acts of violence.19 Of the estimated 1.6 million who died from violence in 2000, almost half were suicides, nearly a third homicides and a fifth war-related (most of them men). In some conflicts civilians are targeted and mutilated as a deliberate strategy to demoralize communities and destroy their social structures. Rape is often an expression of power and brutality against communities.

 

Committing to universalism s. 5.

A common commitment—national and global—towards universal provision of social services, strengthening social protection and assuring full employment would constitute a profound societal and political decision that would lay the foundation for building longterm resilience, for countries and for their citizens as individuals. Such a commitment would boost the ability of individuals, societies and

countries to resist and recover from setbacks, while recognizing that some are more exposed to risks and threats than others and need additional support.

 

Universal provision of social services.

Universal access to basic social services—education, health care, water supply and sanitation, and public safety—enhances resilience. It is not only desirable—it is also possible at early stages of development. And recent experience—for example, in China, Rwanda and Viet Nam— shows that it can be achieved fairly fast (in less than a decade). Universal provision of basic social services can raise social competences and reduce structural vulnerability. It can be a powerful force for equalizing opportunities and outcomes. For instance, universal high-quality public education can mitigate the gaps in education of children from rich and poor households.

Intergenerational transmission of capabilities such as education within families can perpetuate the benefits in the long run. Universal policies also promote social solidarity by avoiding the disadvantages of targeting—social stigma for recipients and segmentation in the quality of services, as well as failure to reach many of the vulnerable.

One commonly held misconception is that only wealthy countries can afford social protection

or universal basic services. As this Report documents, the evidence is to the contrary. Except for societies undergoing violent strife and turmoil, most societies can—and many have— put in place basic services and social protection. And they have found that an initial investment, of just a small percentage of GDP, brings benefits that far outweigh the initial outlay.