The Global Financial and Economic Crisis and Food Insecurity at the Local Level

During the last quarter of 2007, a banking crisis that started in the most developed countries of the world led to a global financial crisis that severely crippled both developed and developing countries economies.  To understand how the global financial crisis was transmitting to the local level in the world’s least developed countries, the World Food Programme (WFP) conducted country case studies in Armenia, Bangladesh, Ghana, Ethiopia, Nicaragua, Tajikistan, and Zambia. The underlying assumptions for these studies are that countries are more vulnerable if their economies are linked with others, particularly if they have high levels of remittances, trade, tourism, foreign direct investment (FDI) and official development assistance (ODA).   

This paper summarises results from the seven country case studies, with each country representing a specific vulnerability based on one or two key transmission mechanisms from the developed countries to the developing economies and finally to the households. For example, the Armenia case study highlights the implication of declining remittances from Russia and the weakening exchange rate; Nicaragua is about remittances from United States and the declining exports; Bangladesh looks at declining textile exports and migrant work while Zambia is about the implication of declining mineral prices and exports and tourism.  The Ghana case study looks at agricultural exports and examines the extent to which the only sub Saharan African country that is on track towards Millennium Development Goals (MDGs) can remain on course.