The Secretary-General has called for urgent attention to the social impacts of the financial and economic crisis. Lessons from other crises show that social consequences need to be tackled rapidly, as they lead to a quick increase in unemployment, disease, poverty and hunger.
Governments find themselves constrained, with a contracting fiscal space for social policies. Policymakers face tremendous challenges to protect social expenditures and to provide necessary social services and transfers, which are also critical to achieving the Millennium Development Goals (MDGs). Pensions are under severe strain because of the collapse of capital markets. People around the world have lesser access to social services, benefits, remittances and credit.
The crisis has also brought about severe negative social impacts. According to World Bank estimates, 45 million people fell into extreme poverty and as a result 400,000 children died in 2009. This comes on top of the vulnerability created by the food and energy crisis, which pushed more than 130 million people into poverty in 2008. 2009 also saw urban slums triple, and 50 per cent of men and women globally remaining below two US dollar a day poverty line. Addressing the social impacts of the crisis is an urgent imperative.