Social unrest and crime over global economic meltdown
Maitreya Buddha Samantaray
March 07, 2009
Global economic slow down has been a buzzword and a hot topic of deliberations in the media, poll campaigns especially since September worldwide. The development has a larger bearing on various spectrum of society. The most disturbing fall out of global crises in the financial market is the visible unrest worldwide. In an attempt to understand the correlation between financial crisis and unrest, it seems pertinent to track the most visible responses to deal with the meltdown crisis.
Natural outcome of the crisis will be the diminishing willingness of governments and individuals to contribute financial aid and support to developing and underdeveloped countries deepening their poverty further. Any attempt at stopping of aid will naturally prompt the poor countries to cut subsidies which will directly affect the poor. World Bank has also predicted that the remittances from overseas by professionals to their relatives in their poor native countries could drop substantially by the end of this year. This would certainly aggravate misery. Africans are expected to suffer a lot as their country receives estimated $40 billion annually from overseas African professionals. Similarly Philippines, is also likely to suffer as nearly 10 per cent of its population work abroad. Food prices across the world have nearly doubled over the past three years, but during April 2007 to April 2008 alone they increased by 85 percent. Countries like Hungary, Ukraine, Iceland and Pakistan have already sought help from the IMF, and more countries are in the line. Turkey tried hard to strike a deal with IMF in the recently concluded World Economic Forum (WEF) conference in Davos.
Another outcome of the crisis is job cuts. Sensing major social unrest due to unemployment arising out of economic meltdown, the International Labour Organization (ILO) Director-General Juan Somavia recently urged Group of 20 leading industrial and emerging economies to devise strategies to boost productive investments, create more jobs and ensure social protection, besides helping financial institutions. Their estimation indicated that meltdown could leave more than 50 million more people unemployed by the end of this year. Similar concern over social unrest was also reiterated recently by French Finance Minister Christine Lagarde at the WEF conference.
Observers are of the view that financial stringency may prompt industrial unrest forcing sacked employees to commit suicides or resort to criminal activities. The situation is more alarming in South Korea which has the dubious distinction of being the highest suicide rate among the developed nations. As South Koreaīs suicide rate nearly doubled during the Asian financial crisis a decade ago, ongoing slowdown will certainly have an impact on their suicide rates. There have been reports of attempt to suicide from other countries of the world as well. It was in August last year, three diamond polishers committed suicides in less than a week in Indiaīs diamond city of Surat in Gujarat state. Last week, a man after allegedly loosing his job from a Kuwait-based petroleum company due to down turn, attempted to set himself on fire near Indian Presidentīs palace.
Financial stringency and increasing unemployment have already resulted in riots and violent protests in countries like Bulgaria, Latvia, Greece, Lithuania, Madagascar, Russia etc. Similar demonstration in Iceland forced toppling down of the government. UK has also recently witnessed massive protest actions by energy workers over the use of foreign labour, while, French cities witnessed large-scale anti-government demonstrations over job protection. Meanwhile, thousands of workers sacked from Kaida toy factory in southern China's export heartland Guangdong province, entered into violent confrontation with police and damaged infrastructures there in November last year. Previously during Asian financial crisis a decade ago, China had witnessed similar unrest.
With regards to criminal activities, earlier in September last year in India, the Chief Executive Officer of an Italy-based auto components manufacturing company Graziano Transmission India Private Limited, at Greater NOIDA was beaten to death by their dismissed employees. Even though India still maintains a mature banking system and is less export-dependent than other Asian countries, portfolio capital outflows have affected its stock market, currency and foreign-exchange reserves. Externally-oriented industries, such as BPOs and aviation, and highly exposed sectors including insurance and real estate, have also suffered. More job cuts in those industries are likely to aggravate industrial unrest in the coming days.
Another criminal manifestation of the crisis is the influx of illegal money. A statement issued recently by the Vienna-based United Nations Office on Drugs and Crime (UNODC) Executive Director Antonio Maria Costa apprehended that that illegal drug money has been in use to maintain bank stocks especially to meet situations arising out of the ongoing economic crisis. According to UKīs prominent independent non-governmental body the Financial Services Authority (FSA), the ongoing meltdown has the potential to prompt the disgruntled employees to commit fraud against banks in an attempt to retain their existing lifestyles, financial losses and meet their sales targets. Criminals may allure these employees to achieve their own targets. Supplementing the analysis further, a global study by the security company McAfee revealed that business operations have suffered a loss of over a trillion in intellectual property due to data theft. As per their study, increasing number of affected staff of the companies has been using their corporate data access to steal important information just to impress potential employers.
However, these developments donīt necessarily lead to a generalization that unstable economy leads to increase in crime rate and social unrest. It was to a considerable extent proved during Great Depression in US in which crime rate was declined one- third between 1934-38 contrary to the common expectation of rapid rise in criminal activities and unrest. Significant enough to remember that crime rates increased every year in US during 1955-72, even though their economy had shown an upward trend, expect for a brief period during mild recession in the early 1960s. Instead of giving a generalized statement that meltdown accentuates increase in crime rate and unrest, it is safer to comment that meltdown may prompt specific offences and resentment.
Natural outcome of the crisis will be the diminishing willingness of governments and individuals to contribute financial aid and support to developing and underdeveloped countries deepening their poverty further. Any attempt at stopping of aid will naturally prompt the poor countries to cut subsidies which will directly affect the poor. World Bank has also predicted that the remittances from overseas by professionals to their relatives in their poor native countries could drop substantially by the end of this year. This would certainly aggravate misery. Africans are expected to suffer a lot as their country receives estimated $40 billion annually from overseas African professionals. Similarly Philippines, is also likely to suffer as nearly 10 per cent of its population work abroad. Food prices across the world have nearly doubled over the past three years, but during April 2007 to April 2008 alone they increased by 85 percent. Countries like Hungary, Ukraine, Iceland and Pakistan have already sought help from the IMF, and more countries are in the line. Turkey tried hard to strike a deal with IMF in the recently concluded World Economic Forum (WEF) conference in Davos.
Another outcome of the crisis is job cuts. Sensing major social unrest due to unemployment arising out of economic meltdown, the International Labour Organization (ILO) Director-General Juan Somavia recently urged Group of 20 leading industrial and emerging economies to devise strategies to boost productive investments, create more jobs and ensure social protection, besides helping financial institutions. Their estimation indicated that meltdown could leave more than 50 million more people unemployed by the end of this year. Similar concern over social unrest was also reiterated recently by French Finance Minister Christine Lagarde at the WEF conference.
Observers are of the view that financial stringency may prompt industrial unrest forcing sacked employees to commit suicides or resort to criminal activities. The situation is more alarming in South Korea which has the dubious distinction of being the highest suicide rate among the developed nations. As South Koreaīs suicide rate nearly doubled during the Asian financial crisis a decade ago, ongoing slowdown will certainly have an impact on their suicide rates. There have been reports of attempt to suicide from other countries of the world as well. It was in August last year, three diamond polishers committed suicides in less than a week in Indiaīs diamond city of Surat in Gujarat state. Last week, a man after allegedly loosing his job from a Kuwait-based petroleum company due to down turn, attempted to set himself on fire near Indian Presidentīs palace.
Financial stringency and increasing unemployment have already resulted in riots and violent protests in countries like Bulgaria, Latvia, Greece, Lithuania, Madagascar, Russia etc. Similar demonstration in Iceland forced toppling down of the government. UK has also recently witnessed massive protest actions by energy workers over the use of foreign labour, while, French cities witnessed large-scale anti-government demonstrations over job protection. Meanwhile, thousands of workers sacked from Kaida toy factory in southern China's export heartland Guangdong province, entered into violent confrontation with police and damaged infrastructures there in November last year. Previously during Asian financial crisis a decade ago, China had witnessed similar unrest.
With regards to criminal activities, earlier in September last year in India, the Chief Executive Officer of an Italy-based auto components manufacturing company Graziano Transmission India Private Limited, at Greater NOIDA was beaten to death by their dismissed employees. Even though India still maintains a mature banking system and is less export-dependent than other Asian countries, portfolio capital outflows have affected its stock market, currency and foreign-exchange reserves. Externally-oriented industries, such as BPOs and aviation, and highly exposed sectors including insurance and real estate, have also suffered. More job cuts in those industries are likely to aggravate industrial unrest in the coming days.
Another criminal manifestation of the crisis is the influx of illegal money. A statement issued recently by the Vienna-based United Nations Office on Drugs and Crime (UNODC) Executive Director Antonio Maria Costa apprehended that that illegal drug money has been in use to maintain bank stocks especially to meet situations arising out of the ongoing economic crisis. According to UKīs prominent independent non-governmental body the Financial Services Authority (FSA), the ongoing meltdown has the potential to prompt the disgruntled employees to commit fraud against banks in an attempt to retain their existing lifestyles, financial losses and meet their sales targets. Criminals may allure these employees to achieve their own targets. Supplementing the analysis further, a global study by the security company McAfee revealed that business operations have suffered a loss of over a trillion in intellectual property due to data theft. As per their study, increasing number of affected staff of the companies has been using their corporate data access to steal important information just to impress potential employers.
However, these developments donīt necessarily lead to a generalization that unstable economy leads to increase in crime rate and social unrest. It was to a considerable extent proved during Great Depression in US in which crime rate was declined one- third between 1934-38 contrary to the common expectation of rapid rise in criminal activities and unrest. Significant enough to remember that crime rates increased every year in US during 1955-72, even though their economy had shown an upward trend, expect for a brief period during mild recession in the early 1960s. Instead of giving a generalized statement that meltdown accentuates increase in crime rate and unrest, it is safer to comment that meltdown may prompt specific offences and resentment.
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