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Who Hurts the Most in Recessions?Who Hurts the Most in Recessions?

Who Hurts the Most in Recessions?

Joe Clark—a once (Conservative) Prime Minister of Canada—argues the poor will feel this recession the worst for four reasons:

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Topics: Globalization, Justice, Foreign Policy, Economics
Who Hurts the Most in Recessions? February 25, 2009  |  By Robert Joustra
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Answer: the already poor, and especially the recently upwardly mobile. Recession economics aren't fair: the brunt isn't borne by the already wealthy and industrialized. America, and middle power countries like Canada, will continue to attract foreign investment because they are safe havens in turbulent economic times. They have proven track records, educated work forces and retain far more confidence than developing economies. Ironically in recession markets more money and investment, not less flows into the US—and it's coming out of the developing world.

Joe Clark—a once (Conservative) Prime Minister of Canada—argues the poor will feel this recession the worst for four reasons:

  1. Private foreign investment plunges as investors look for "safe" markets.

  2. Rich countries can borrow and run big deficits. Poor countries can't.

  3. Aid budgets are the first to go, both in foreign policy and in NGO budgets. Sub-Saharan Africa can't unelect a a developed world government.

  4. Remittance—money sent home from individuals working in rich countries—plummet (Remittances account for an astonishing 20-30% of GDP in Haiti, Bosnia and Jordan).

The real question: will Canada use its privileged place in the G20 to treat this global crisis as more than just a trade and economic issue?

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