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The Ongoing UK Strikes Indicate Greater Aid Needs Abroad

The UK StrikesRecent unrest amongst various public-sector industries in the U.K. has ballooned amid rising inflation and stagnating wages. The ongoing U.K. strikes appear to be a result of these issues, and to an extent, present a picture of the situations abroad and the need for aid.

Record Strike Action in Over 30 Years

Strikes seem to have almost become part of normal life in the U.K., with sectors engaging in industrial action ranging from public transportation to education, post services and health care. February’s strike of ambulance staff, nurses and physiotherapists marked the National Health Service’s most dramatic strike since its beginning 75 years ago. Yet, there is still no lasting solution in sight. Insufficient pay is the biggest reason for those taking part in strikes, as public-sector wages have not kept up with record-high inflation, which makes disposable income much tighter for those who work for government-controlled entities.

A Global Crisis

The ongoing cost of living crisis in the U.K., including sharp increases in the price of energy bills and food now at a 45-year high, is causing a lot of unrest within the country, but these problems are not unique to the developed world. If communities in one of the world’s wealthiest countries are struggling, it points to the harshness of the situation for those in low-and-middle-income countries. Inflation has been surging abroad also and is more likely to have devastating effects on communities that were struggling to attain basic life necessities before the price hikes. The U.N. estimated in the summer of 2022 that the increase in costs of food and energy will plunge an additional 71 million people into poverty, with forecasts suggesting that Sub-Saharan Africa and the Balkans could be two of the worst-affected regions.

The Bleak Situation Abroad

In 2022, strikes in developing countries’ health sectors were also widespread, including in Zimbabwe, where the government passed a controversial bill limiting workers’ ability to strike in 2023. Poor pay and working conditions were the underlying reasons for the strikes, with similar situations in Asian countries such as Sri Lanka where poverty levels continue to increase.

Why Maintaining Aid Is Essential

Delivering aid helps reduce political insecurity and the chance of conflict, which benefits all countries. Improving health standards abroad is also crucial for preventing the rise of global epidemics, such as the COVID-19 pandemic. There is also the potential for new markets to open in countries assisted by aid in the future. This is another economic opportunity for developed countries like the U.K. Finally, there is the opportunity to gain more soft power, or global political influence, through the maintenance of foreign aid. Improving existing friendships and partnerships can potentially result in positive outcomes for the countries involved. And developed countries working with less-developed nations in economically challenging times could be crucial for geo-political relations.

Looking Ahead

In the face of ongoing strikes and rising living costs, the need for aid becomes evident not only within the U.K. but also in low-and-middle-income countries facing similar challenges. Reports suggest that providing foreign aid is essential for reducing political insecurity, preventing global epidemics and fostering economic opportunities for both developed and developing nations. It also presents an opportunity to strengthen global partnerships and promote positive geo-political relations in economically challenging times.

– Hannah Naylor
Photo: Unsplash

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As a Global Stagflation Crisis Approaches, Foreign Aid Must Be a Priority

Global economic growth is on a steep downturn, due primarily to the consequences of the COVID-19 pandemic and supply chain shortages from the Russia/Ukraine conflict. The World Bank and the Organization for Economic Cooperation and Development (OECD) had each predicted that global economic growth in 2022 would reach more than 4% earlier this year. At the beginning of June, they scratched the original estimates, saying that economic growth would barely reach 3%, indicating a possible crisis of global stagflation.

Economic Downtown After the Pandemic

At the end of 2021, many global organizations, including the United Nations and the International Monetary Fund, predicted that the global economy would see a post-pandemic boom. However, because of the conflict in Ukraine and the COVID-19 shutdown in China, the global supply chain took a significant hit. In turn, inflation is rising at an alarming rate, especially in global economic powerhouses like the United States and England. This is cause for concern not only for rich countries but for small and developing countries as well, which often rely on economic overflow from large nations.

Stagflation

The World Bank and the OECD declared that the global economy is at risk of stagflation, which is a combination of high, sustained inflation and stagnating growth. Global stagflation poses a risk for everyone, but poor and developing countries would face the worst of it. Many developing nations’ economies rely on exports to wealthy nations, meaning a global economic slowdown would seriously harm them. Additionally, high interest rates and low growth would make it nearly impossible to pay back large quantities of debt. The World Bank has predicted that some nations will default on their debts, which would mean a decline in living conditions.

The most recent stagflation crisis took place in the 1970s when the global economy saw aggressive inflation and low economic growth. The current situation is worrying to many economists and activists because at that time living standards and economic well-being took a drastic downturn in many developing countries in Latin America and the Middle East.

Avoiding Stagflation

The good news is that the circumstances of the current economic situation differ significantly from the stagflation crisis of the 1970s. Most central banks are now independently operated and the global economy is less reliant on low energy prices, two factors that provide some relief to poorer countries.

The OECD believes that a stagflation crisis can be avoided, but economic powerhouses and international organizations need to take serious action. There are significant factors in play that are preventing governments from stepping in, primarily the fact that developing nations have already accumulated record levels of debt.

To avoid stagnation, the World Bank suggests worldwide policymakers focus on five key areas. They need to:

  1. Limit the harm caused by the war in Ukraine by coordinating the crisis response in terms of delivery of food and medicine and support of refugees.
  2. Counter the high prices of oil and food by increasing supplies of key commodities.
  3. Escalate debt relief as debt distress spreads from low-income countries to middle-income countries.
  4. Continue to strive to contain COVID-19 globally through strong immunization programs.
  5. Continue to invest in clean energy and energy efficiency and decrease their reliance on fossil fuels.

The United States Steps Up with Aid

Support from the United States could come from protecting and enhancing the International Affairs Budget, emergency COVID-19 relief and direct collaboration with the governments of developing nations concerning exports and investments. The United States has taken a step in the right direction by supporting the Partnership for Global Infrastructure and Investment (PGII), which will pledge $600 billion to the global economy over the next five years.

–Ella DeVries
Photo: Flickr