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Road Crashes in India Increase Household Poverty and Debt

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More than 75 percent of poor households in India reported a decline in their income as a result of a road traffic crash. The financial loss for the poor amounted to more than seven month’s household income, while it was equivalent to less than one month’s household income for rich households, says a new World Bank report.

Titled “Traffic Crash Injuries and Disabilities: The Burden on Indian Society,” the report highlights the disproportionate impact of a road crash on poor households that pushes them into a vicious cycle of poverty and debt. It sheds light on the links between road crashes, poverty, inequality, and vulnerable road users in India.  

The study was done in collaboration with SaveLIFE Foundation – a national non-governmental organization focused on road safety. Based on the survey data collected from four Indian states – Uttar Pradesh, Bihar, Tamil Nadu and Maharashtra,[1] the research assesses the social, financial, gender, and psychological impacts of road crashes on poor and disadvantaged households.

The report recommends policy-oriented approaches for saving lives and improving the ability of victims and their families to get back on their feet, including providing immediate financial, medical and legal aid.

“We have taken a number of positive initiatives to reduce road crash deaths in India. With the support of all stakeholders in our society, I am committed to reducing road crash deaths by 50 percent by 2025,” said Nitin Gadkari, Minister for Road Transport & Highways and the Minister of Micro, Small and Medium Enterprise at the release of the report. “This report highlights the link between poverty and impact of road crashes. I urge all state governments to effectively implement the Motor Vehicles (Amendment) Act, 2019 and work together to mitigate the effects of road crashes on poor and disadvantaged sections of the population,” he added.

The report also brings out the sharp rural-urban divide and the disproportionate impact on women. The survey shows that the income decline for low-income rural households (56 percent) was the most severe compared to low-income urban (29.5 percent) and high-income rural households (39.5 percent). Women bore the burden of crashes across poor and rich households, often taking up extra work, assuming greater responsibilities, and performing caregiving activities after a crash. About 50 percent of women were severely affected by the decline in their household income after a crash. About 40 percent of women reported a change in their working patterns post-crash, while around 11 percent reported taking up extra work to deal with the financial crisis.

The study also documented low rates of access to insurance coverage and poor awareness related to legal compensation among truck drivers. Two-thirds of truck drivers interviewed for the survey were not aware of third-party liability insurance. None of the drivers had applied for or benefited from cashless treatment at hospitals, Solatium Fund for hit and run cases or ex-gratia schemes.

“Road crashes can have a devastating and disproportionate impact on the poor, thrusting a family into deep poverty,” said Hartwig Schafer, World Bank Vice President for the South Asia region. “The World Bank is committed to supporting the Indian government in creating safety nets for poor households to ease their financial burden and help them cope with the sudden emergency linked to road crashes,” he added.

In addition to the financial losses, the report highlights the social impact of road traffic injuries. About 64 percent of low-income households reported a deterioration in their standard of living (more than twice reported by high-income households), while more than 50 percent reported mental depression post-crash.

The findings of the report identify the areas that require immediate improvements such as efforts towards post-crash emergency care and protocols, insurance and compensation systems. It also presents an opportunity for development agencies, policymakers and respective state governments to prioritize a complete policy overhaul of the existing system and implement sustainable solution-oriented, inclusive measures to improve their performance on road safety,” said Piyush Tewari, CEO and founder of SaveLIFE Foundation.

The report recommends making health infrastructure and coverage more accessible and inclusive; providing social security net for crash victims from low-income households through state support; creating an accessible legal framework for availing insurance and compensation for road crash victims; recognizing the gender impact of road crashes and addressing it through participative governance and special schemes for women; and strengthening post-crash support for children and young adults through state support.

The study interviewed around 2500 respondents[2], including 1647 respondents from low-income households, 432 from high-income households and 420 truck drivers in the four selected states (Uttar Pradesh and Bihar representing Low-Capacity States and Tamil Nadu and Maharashtra representing High-Capacity States) across urban and rural areas. The qualitative part of the study included focus group discussions with road crash survivors and their family members and in-depth interviews with adolescents aged 14-18 years.

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Commitment to ESG Reporting is Driving Change within Global Corporations

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New case studies from the World Economic Forum show how comprehensive environmental, social and corporate governance (ESG) reporting has started to drive corporate transformation around the world, particularly in sustainability efforts and company culture.

Based on case studies from companies reporting on the Stakeholder Capitalism Metrics, the white paper found examples of specific strategy and operations changes as a result. These include initiatives such as new approaches to water management in real estate and implementing biodiversity strategies and targets.

The case studies also indicate that despite some progress, companies are still struggling with competing and disparate ESG frameworks around the world. As regulators begin to roll out mandatory ESG reporting across regions, alignment will be key to ensuring that the clarity and efficacy of ESG reporting continues to improve globally.

We’re happy that support continues to grow for this set of metrics even in the face of geopolitical challenges, the lingering global pandemic and economic disruptions of the past two years,” said Emily Bayley, Head of Private Sector Engagement, ESG, World Economic Forum. “As this growth continues and jurisdictions transition from voluntary to mandatory sustainability reporting standards, we hope these learnings can provide valuable insights for companies that are just getting started on sustainability reporting and those that have been doing it for years.”

ESG-Driven Corporate Impacts

The Stakeholder Capitalism Metrics Initiative case studies engaged a global set of companies to gather how, and if, their ESG reporting has informed corporate transformation both internally and externally.

Examples of these transformations include:

Ecopetrol

Stakeholders told Ecopetrol their report was too long – the Forum’s core metrics helped the company focus on reporting topics that are most material and will generate value.

HEINEKEN

The metrics go beyond ESG to capture commercial metrics on employment, economic contribution, investment and tax. This delivers “an annual dashboard of comparable data on both sustainability and prosperity that will provide us with a snapshot of how healthy our company is”.

JLL

The core metric on water consumption and withdrawal in water-stressed areas led the company to encourage its teams and clients to agree water management plans and targets. It may even influence where the company rents office space in the future.

Philips

Accurate reporting on the environmental and social impacts of its operations. For example, the metric on resource circularity points customers towards the most impactful products on the market and drives the company’s innovation agenda to design more sustainable solutions.

SABIC

Reporting on the Forum’s metrics has increased the value of transparency within the company, leading to conversations and progress on difficult issues.

Schneider Electric

The metric on land use and ecological sensitivity contributed to Schneider’s new approach to biodiversity, as it adapted its reporting and asked all sites to set specific biodiversity action plans.

ESG Regulatory Landscape

While progress has been made on the creation and implementation of meaningful and effective ESG disclosures globally, concerns remain about the disparate nature of the competing and complex ESG reporting mechanisms that exist today.

There are also concerns that as reporting becomes mandated there could be less transparency because people will not want to disclose more than they have to. As mandated ESG reporting becomes more widespread, both regulators and internal advocates should ensure corporations understand the full value of transparency on sustainability and other ESG issues.

Addressing this issue is particularly important as regulators in different regions begin to roll out their mandatory reporting requirements. Focus on a common set of comprehensive and material metrics will be important for both the efficacy and feasibility of ESG reporting in the coming months. As much as possible, the European Union, the US Securities and Exchange Commission (SEC) and the International Financial Reporting Standards (IFRS) Foundation should align their metrics to ensure companies are able to implement effective ESG reporting globally.

Stakeholder Capitalism Metrics Initiative

The World Economic Forum and the coalition of companies adopting the Stakeholder Capitalism Metrics, engaged with the preparatory working group and are continuing the dialogue with the International Sustainability Standards Board (ISSB) technical teams under the IFRS Foundation as they go through the standard-setting process. The metrics are expected to form part of the ISSB “exposure draft” next year on cross-thematic disclosures and metrics.

Announced at the World Economic Forum Sustainable Development Impact Meetings 2022, these case studies build on the earlier report to showcase progress on the commitment made by companies at the Annual Meeting in 2020. Since then, 186 global companies, with a combined market capitalization of over $6.5 trillion, have adopted the Stakeholder Capitalism Metrics. Of these, 126 companies have disclosed against the metrics in their mainstream reports for either one or two years.

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Trade in 25 Technologies Can Help Climate Action

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Based on 30 interviews with industry and academia, the Accelerating Decarbonization through Trade in Climate Goods and Services report highlights technologies with high, immediate emissions-cutting potential, in five categories – refrigerants, energy supply, buildings, transport and carbon capture and storage (CCS). The list of technologies can guide trade ministers looking to support climate action.


“Climate change is a global concern,” says Sean Doherty, Head of International Trade at the World Economic Forum. “Our response must draw upon the innovation and capacities of the whole world, not be held back by protectionism.”


Trade collaboration on climate has been limited to date with trade and climate practitioners working in separate silos. New efforts are emerging now, however, to address the linkages between these two areas.


“There is no time to waste to limit global warming to 1.5°C,” adds Jean-Pascal Tricoire, Chairman and Chief Executive Officer, Schneider Electric. “We need to decarbonize three times more, three times faster. The good news is that we have the technologies to do it. Solutions are not limited to renewable energy. It actually starts with energy efficiency, electrification and digitization. If deployed at full potential, we can eliminate 70% of what we’re emitting today.”


The report also highlights non-tariff barriers that affect trade in climate technologies. Regulatory cooperation around product testing or labelling requirements, for example, could reduce friction in getting emissions-cutting goods to market. Interviewees also noted that climate action is held back by trade barriers to the services needed to operate climate technologies. The report suggests a way to identify these climate services for priority trade cooperation.


“Our transition to a low-carbon economy will hinge on the deployment of a number of key technologies that are both mature and widely available, as detailed in this important report on the nexus of decarbonization and international trade, including energy efficiency, electric vehicles, green hydrogen, smart buildings and more,” says Björn Rosengren, Chief Executive Officer of ABB. “ABB’s contributions to this new report from the Alliance of CEO Climate Leaders underscore our support for removing and reducing barriers to trade in climate goods and services to speed the drawdown of global emissions.”


More efforts are needed to engage developing countries in trade efforts on climate. Over 750 million people worldwide lack reliable electricity access, mainly in sub-Saharan Africa. Developing economy industries must decarbonize and leapfrog the latest technologies to remain competitive in global value chains moving towards net zero. Some developing economies will need support in creating a climate-friendly trade and technology strategy. Global and local industries can help policymakers understand the criss-crossing of value chains that drive economic activity and how to align these flows to the climate agenda.


“Climate change knows no borders and encouraging better trade between countries can ensure the transfer of valuable knowledge, new technologies and skills to improve energy efficiency in homes around the world,” says Hakan Bulgurlu, Chief Executive Officer of Arcelik. “It is critical to our ultimate goal of achieving net-zero targets.”


To support an increased understanding of trade, value chains and climate action, the Climate Trade Zero community will host dialogues and support countries with actionable analysis.

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East Asia and Pacific Sustaining Growth, Restraining Inflation, but Facing Risks Ahead

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Growth in most of developing East Asia and the Pacific rebounded in 2022 from the effects of COVID-19, while China has lost momentum because of continued measures to contain the virus, a World Bank report said on Monday.  

Looking ahead, economic performance across the region could be compromised by slowing global demand, rising debt, and a reliance on short-term economic fixes to cushion against food and fuel price increases.

Growth in developing East Asia and the Pacific outside of China is forecast to accelerate to 5.3% in 2022 from 2.6% in 2021, according to the World Bank’s East Asia and Pacific October 2022 Economic Update. China, which previously led recovery in the region, is projected to grow by 2.8% in 2022, a sharp deceleration from 8.1% in 2021. For the region as a whole, growth is projected to slow to 3.2% this year from 7.2% in 2021, before accelerating to 4.6% next year, the report says. 

“Economic recovery is under way in most countries of East Asia and the Pacific,” said World Bank East Asia and Pacific Vice President Manuela V. Ferro. “As they prepare for slowing global growth, countries should address domestic policy distortions that are an impediment to longer term development.”

Growth in much of East Asia and the Pacific has been driven by recovery in domestic demand, enabled by a relaxation of COVID-related restrictions, and growth in exports. China, which constitutes around 86% of the region’s output, uses targeted public health measures to contain outbreaks of the virus, inhibiting economic activity.

The global economic slowdown is beginning to dampen demand for the region’s exports of commodities and manufactured goods. Rising inflation abroad has provoked interest rate increases, which in turn have caused capital outflows and currency depreciations in some East Asia and Pacific countries. These developments have increased the burden of servicing debt and shrunk fiscal space, hurting countries that entered the pandemic with a high debt burden.

As countries of the region seek to shield households and firms from higher food and energy prices, current policy measures provide much-needed relief, but add to existing policy distortions. Controls on food prices and energy subsidies benefit the wealthy and draw government spending away from infrastructure, health and education. Lingering regulatory forbearance, aimed to ease lending through the pandemic, can trap resources in failing firms and divert capital from the most dynamic sectors or businesses.

“Policymakers face a tough tradeoff between tackling inflation and supporting economic recovery,” said World Bank East Asia and Pacific Chief Economist Aaditya Mattoo. “Controls and subsidies muddy price signals and hurt productivity.  Better policies for food, fuel, and finance would spur growth and insure against inflation.”

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