The bankruptcy of the Lehman Brothers investment bank in September 2008 is seen by many as the tipping point in a series of collapses in the banking system that spread like prairie fire through the financial markets and stock exchanges of the richest economies of the world. Since then, the word “crisis” has dominated the media as well as political discussion worldwide. The Great Depression that shook the world in the early 1930s is frequently cited as the only precedent and well-known historian Eric Hobsbawn has compared the fall of Wall Street to the fall of the Berlin Wall. Regarded as the greatest historian of the twentieth century, Hobsbaum said, “the totally unrestricted and uncontrolled free-market capitalist economy (…) that captured the world and its governments in the years since Margaret Thatcher and President Reagan (…) is breaking down before our eyes”, the same as “the centrally state-planned economies of the Soviet type broke down twenty years ago.”1
The dust has not settled yet. While politically connected US investment banks such as Goldman Sachs, have started to make profits again and reward their executives with multimillion dollar bonuses, unemployment is still growing in most of the so called “advanced” economies and the tsunami wave of the crisis is only now, one year after the earthquake at the financial epicenter, starting to hit more distant shores. In Bolivia, for example, the local Social Watch coalition in its contribution for this report writes that “as a cycle of world growth roared past (previous to the crisis), Bolivia stood by and watched, unable to take advantage of the opportunity to establish its own rhythm of development. Its economy was just beginning to pick up speed, when the global boom began to stall and then go into reverse.”
The findings from civil society organizations in over 60 countries are included in this Social Watch report, the first global bottom-up report on the social impact of the crisis. UN agencies and other institutions have reported estimates of the millions of jobs that will be lost worldwide, the millions more people who will be thrown into poverty and the additional number of children likely to die as a result of the inability of the markets to solve the problems they created (contrary to what was the prevailing credo until last year). Valuable as these are, they are calculated from global aggregates, not the results of direct observation from the ground. The accumulation of findings from rich and poor countries of all continents show remarkable similarities and also a diversity of situations that enriches the picture available so far, makes it even more dramatic and challenges decision-makers with the urgency of implementing policies that put people first. It is not just a matter of social justice, but also of sound economic policy, as a brief overview of the country reports demonstrates. Read more