85% of World Population to Live in the Grip of Austerity measures by 2023

The world economy is expected to see moderate growth in 2023, projected at 3.0%, but is anticipated to slow down slightly to 2.7% in 2024. This economic growth is largely driven by Asia, despite a weaker recovery in China than expected. However, global growth in 2024 is likely to be lower, primarily due to monetary policy becoming more visible and China's subdued domestic demand, said OECD in its latest report.

Despite millions of people being pushed into poverty and hunger, 143 countries – including 94 developing nations – are implementing policy measures that undermine the capacity of governments to provide education, healthcare and social protection, according to a new study published on Wednesday.

The report End Austerity: A global report on budget cuts and harmful social reforms shows that 85 per cent of the world’s population will live in the grip of austerity measures by 2023. “This trend is likely to continue until at least 2025, when 75 per cent of the global population (129 countries) could still be living under these conditions,” the report said.


Austerity measures include scaling down social protection programs for women, children, the elderly and other vulnerable people, leaving only a small safety net for a fraction of the poor; cutting or capping the wages and number of  teachers, health and local civil servants and eliminating subsidies; privatising or commercialising public services such as energy, water and public transport; and reducing pensions and workers’ rights.

In the report, the authors argue that the governments rather than investing in a robust post-pandemic recovery to bring prosperity to all citizens are considering austerity measures that will harm populations.

The report further said, “It is alarming that trillions of dollars are used to support corporations, while the costs of adjustment are thrust upon populations.”

Isabel Ortiz, Director of the Global Social Justice Program at the Initiative for Policy Dialogue, and co-author of the report, said: “Decisions on budget cuts affect the lives of millions of people and should not be taken behind closed doors by a few technocrats at a Ministry of Finance, with the support of the IMF. Policies must instead be agreed transparently in a national social dialogue, negotiating with trade unions, employer federations and civil society organisations. Austerity cuts are not inevitable, in fact our report presents nine financing alternatives that are available, even to the poorest countries.”


Civil society organisations from across the world are launching an #EndAusterity campaign today to fight back against the wave of austerity that is sweeping across the world, supercharging inequality and compounding the effects of the cost-of-living crisis and climate breakdown.


In another report,  “Recovery at a Crossroads: How Countries Spent COVID-19 Funds”, the Financial Transparency Coalition (FTC) and partners found that one-third less Covid-19 recovery money was spent last year compared to 2020, falling from 3.9 per cent of GDP to 2.4 per cent of GDP, due to the worsening economic situation.

The report further stated that only 37 per cent of Covid-19 recovery funds in 21 developing countries analysed went to urgent social protection measures. Meanwhile, big corporations benefited from 39 percent of funds, which does not take into account tax waivers, corporate loans, and credit lines where they are not accounted for in the budgets. In the meantime smaller businesses only received 20 per cent and informal workers 4 percent of the total. Women have been particularly affected, since despite being hard hit by the pandemic, they only received half as much support as men.

Financial Transparency Coalition director Matti Kohone said “Despite the cost-of-living crisis, governments in developing countries, often with their hands tied by international financial institutions, are putting big corporations ahead of the people. Nearly 40% of Covid-19 recovery funds went to big companies, meaning that those most impacted by the pandemic have been left behind. We should promote a people-centered recovery with progressive tax policies instead of cutting social protection and support for the most vulnerable.”


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