Poverty and Economic Crisis

Abstract

During the last decade or so, the term “economic crisis” has become part of the global lexicon. In an economic sense, this term refers to relatively macroeconomic outcomes such as rapidly falling stock market prices, plunging currency devaluations, widespread bankruptcies, and mass unemployment (Eiamlapa-Quinn, 1998). In process terms, economic crisis is technically a reflection of the increasingly fragile interconnectedness of national and regional economies in a new global order (Kato, 2000). This fragility is estimated to be especially acute for the poor who live in developing countries (World Bank Group, 2001a). Indeed for a majority of people the world over, the most salient feature of economic crisis is probably its capacity for plunging millions of people into abject poverty. During the 1997–98 economic crisis in South East Asia for instance, over fifty million people in Indonesia were pushed below the poverty line, and some forty million Indonesians were left without enough basic food to eat (Soesastro, 1998). This chapter uses behavioral science to focus on the everyday meanings of catastrophes like these (World Bank, 2000). In essence, we argue that developing a better understanding of how people think and feel about economic crisis — its lay psychology — will improve human abilities to manage it, and therefore combat poverty within the global community (Aus-Thai Project Team, 1998, Aus-Thai Project Team, 1999 Aus-Thai Project Team, 2001 Aus-Thai Project Team, 2002).