“Impact of the Global Economic Crisis On the Work of NGOs”
Sunday, January 17, 2010
11:01 AM
NEW YORK CITY— On Thursday, February 12, 2009, the United Nations addressed the concern as to how NGOs, or Non-Governmental Organizations, will cope with the possible impacts in funding and the ability to effectively support their projects, causes or programs because of the current global financial crisis.

The financial crisis we face today is more devastating and widespread than any economic situation the world has seen since the Great Depression in the 1930s. The current financial crisis became clearly visible in 2008 with the crash of the housing market, a dramatic decrease in liquidity in the U.S., and the failing of major banks. The poorest in our societies are affected the most by the crisis. The issue with NGOs is that they receive much of their funding from external donations and fundraising. It is becoming more and more critical because less and less individuals are becoming tight with their money as well as governments around the world are becoming much more careful with their spending. Economists have warned NGOs that they need to be prepared for a reduction in financial assistance.

Henk-Jan Brinkman is the Senior Adviser for Economic Policy, World Food Program. From 2001 to 2006, he served as a senior economic affairs officer. He told a brief story about a family in Costa Rica called the Padilla family and how because of the food crisis, they were cutting back. “They are eating less and less well, which can develop into lifelong consequences.” The prices of food started to increase in 2001 and soared in 2006. In accordance with the price per metric tone, rice went up 600 points in 2008 and maize increased drastically in 2008 as well. The governments, especially in third world countries, are spending less in health care and cutting out production of meat products and vegetables. “Children are therefore less healthy.” A study was done in the 90’s that concluded if children are not felt properly during the first two years of their lives, they will receive less pay when they get older.

Brinkman stated that the global financial crisis we are suffering from is the “worst since the Great Depression.” Prices have come down, the dollar has however appreciated a little bit, stocks are low, food prices remain high, there are few tourists, and foreign act investments fell 20% and are predicted to fall 30% lower in the next year.

The solution for NGO’s is proposed to be as follows: to assist governments, to adjust existing programs, to advise government on policies, and to assess and analyze each NGO’s current situation within the financial crisis.

Yuvan A. BeeJadhur is the Counselor for the World Bank, Special Office of the Representative to the United Nations. While traveling around the islands of the Pacific and Caribbran, he noticed there were few to no tourists. Some hotels had less than 20% occupancy during on-season. “There is no time for complacency,” BeeJadhur stated firmly. “Countries should not got to a state economic nationalism.”

The financial crisis can become a human crisis. “There needs to be global action. We need to stress how difficult these times are.”

Daniel Platz is the Economic Affairs Officer, NGI Focal Point, Financing for Development Office of the Department of Economic and Social Affairs (DESA). The main question asked is ‘how does the crisis affect the developing countries? “There is less access to credit and interest rates are rising,” said Platz. “Global imbalances are getting worse and the oil prices have gone down, which is a problem for “oil” countries.” The global financial crisis began in developed countries and it is now considered to be a world-wide crisis. “The dollar is a reserve currency and has increasing imbalances.”

How do we deal with the financial crisis? We must focus on short term and long term measures. Short term measures include bailout and stimulus packages and long term measures include a universal forum. Those within and apart from the United Nations can make a difference!

Location: United Nations Headquarters
Author: Vanessa Pinto
NGO: Manhattanville College

I'm a senior majoring in English. I attend and report on UN Briefings and other meetings from October through May. I published a novel at the age of seventeen and have three years of writing experience for my college newspaper, literary and travel magazine. My focus is magazine & editorial writing and travel documentary. I am also active in global volunteer efforts for peace and interfaith alliance, as well as the promotion of animal rights, women's rights and education, and disaster relief.

UNA-USA: YPIC, World Youth Alliance, GPC, Seeds of Peace, WHO, UNICEF, UN University

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October 2009
January 2010