December 20, 2018
The 2008 financial crisis has re-shaped our world in ways both obvious and insidious. What began as a North Atlantic banking crisis transformed into a global sovereign debt crisis, and then—through concrete policy choices—converted into the full-blown human rights crisis we face today.
One of the most profound consequences of this crisis is the now widespread dogma of resource scarcity, and the ubiquity of fiscal austerity. While the pursuit of austerity in Europe garnered most attention initially, it has rapidly become the policy norm in every region, including in low- and middle-income countries. Indeed, the ILO estimates that the Global South will be worst affected up to 2020, with East Asia and sub-Saharan African expected to be hard hit, and Latin America already seeing spikes in deep fiscal consolidation according to ECLAC.
CESR’s work against austerity has spanned different contexts and continents: from “peripheral Europe” (such as Ireland and Spain) to countries of the ill-fated Arab Spring (such as Egypt) and recession-hit emerging economies (such as Brazil and South Africa). The slideshow below reflects on our sustained work with national partners to monitor the effects of the crisis and the austerity policies imposed in its wake, visually illustrating our collaborative efforts and impacts.
As our work has shown time and again, the Lost Decade has had real consequences for human rights, with progress on economic and social rights backtracking—or at least stalling—in the last ten years in most parts of the world. For example, despite peak public concern about inequality, since 2008 income inequality around the world has stagnated in some countries and actively spiked in others. Wealth inequality, for its part, widened in all regions of the world except China. Housing stock has increasingly become a pawn for financial investors and markets, while becoming ever more unaffordable for ordinary people, especially in large cities.
Since 2008, education spending cuts have affected the teacher-pupil ratio in many countries according to UNESCO, while progress on reducing the number of children out of school has also stalled after promising gains up to 2007. The right to health is equally under threat, with widespread cutbacks to crucial services since 2008, as global public spending on healthcare entered a gradual but steady decrease. As a result, out-of-pocket payments (direct payments patients must make to receive care or medicine) per capita have grown in every region of the world, threatening the ability of people living in poverty to access the healthcare they desperately need.
Some of the deepest and most long-lasting effects—for individuals, families and the whole social fabric—have been around the right to decent work. Wages have stagnated remarkably, and unemployment rates remain stubbornly high in most of the world, with only a few regions recovering their pre-crisis employment levels. Progress in reducing vulnerable employment has also stalled since 2012. Young people and women have borne the brunt of all this. In 2018, women’s unemployment remains stubbornly higher than their male counterparts, while women’s unpaid care work has also intensified and increased due to the cumulative impacts of cutbacks to public and social services. Undoubtedly, workers have been the biggest losers during this past Lost Decade, with wages stagnating (globally and in specific countries) and their share of economic gains sinking in many countries ravaged by austerity. Tellingly, according to ILO data the labor income share dropped in countries that implemented deep fiscal adjustment measures (e.g. Spain, Ireland, Portugal, Greece and Cyprus), while labor’s share of the economy grew in countries that avoided deep fiscal consolidation (e.g. Canada, France, Austria, Germany, Finland).
The Lost Decade has also had dramatic political consequences, and impacts on civil and political rights. The economic crisis was seized on by ideologues to strangle the state and downsize democracy; while the accumulated harm subsequently wrought by austerity caused deep disaffection with the political process and democracy among those most affected. In several countries, this disaffection has been cynically manipulated by authoritarian, ethno-nationalist political figures with distinctly anti-rights agendas. More than 89 countries declined in their Democracy Index score since 2016 alone, the worst performance since 2010- 11 in the aftermath of the global economic and financial crisis.
CESR’s in-depth and ongoing work on austerity in particular countries, for example Spain, Egypt, Brazil and South Africa, has consistently brought to light similar, far-reaching impacts at the national level. Our work in the ten years since the financial crisis has stressed that austerity is not only untenable and counter-productive, but also that its premise is full of “fiscal fallacies.” Austerity is an unjust and unnecessary policy choice, given a whole spectrum of feasible fiscal and monetary alternatives. Indeed, a host of international and regional human rights bodies have now repeatedly found that austerity is inimical to States’ human rights obligations, thanks in part to prompting and evidence from CESR and partners.
During 2018, the 10th anniversary of the financial crisis, CESR has undertaken a series of events and activities to highlight the impacts of austerity and its alternatives—taking our rights-based arguments against austerity beyond the human rights sphere and into the realm of economic and development decision-making. For example, we shone a light on the human rights impacts of austerity at the International Monetary Fund Spring Meetings with our Brazil partners INESC; we underlined the fundamental incompatibility of austerity and the SDGs at the UN High Level Political Forum, marshalling evidence from around the world; we pioneered new guidance on how to conduct human rights impact assessments of austerity, and we presented compelling evidence to the UN Committee on Economic, Social and Cultural Rights that South Africa’s austerity measures are violating its rights obligations.
The year also brought good news: a new government reversed one of Spain’s most draconian post-crisis measures, the denial of public healthcare to undocumented migrants. This happened after years of campaigning by civil society groups, including CESR, and subsequent calls for its repeal by human rights bodies. More and more human rights mechanisms have begun to denounce austerity in a variety of Global South and North contexts. For example, the UN Committee on Economic, Social and Cultural Rights recently interrogated austerity in Argentina and South Africa; while the UN Special Rapporteur on extreme poverty and human rights issued scathing preliminary findings on austerity in the UK. CESR continues to work with our partners at the national, regional and global levels to turn the tide against austerity: reveal the cracks in its logic, document its terrible human consequences, and promote rights-based alternatives.