The impact of economic crisis on the work of our international partners

As the news continues to be dominated by the economic crisis, we reflect on how the current situation is affecting the work of our international partners.

Building of the community centre in Dwarzack slum, Sierra Leone

The economic downturn not only impacts on businesses and individuals; the charity sector has also been experiencing the adverse effects of the current crisis. Third Sector recently reported that almost a third of charities have been forced to make staff redundant as a result of the slowing economy, according to a poll of charity chief executives.

The poll, by the Charities Aid Foundation, also revealed that inflation was having a serious impact on charities, with 71 per cent of chief executives reporting that their organisations' costs had increased.

It is inevitable that charities will see changes in their income as both individual and corporate donors tighten their belts and will have to look for more diverse funding streams. However, these are not the only issues which are taking their toll.

Y Care International’s experience

For some months now, some of our international partners have been feeling the effects of worldwide currency fluctuations and increases in fuel, food and raw material costs.

In The Gambia, where we are supporting a four-year vocational skills project to reduce poverty and social exclusion among vulnerable young people, the value of sterling has fallen 20 per cent against the Dalasi. This occurred between the date the project proposal was submitted and the start of the project. This is causing a significant problem for our partner YMCA. If the rate of exchange remains stable throughout the life of the project, the value of the total grant will have fallen by approximately £100,000. This threatens to put pressure on Y Care International’s limited resources as we try to meet our commitment to the young people who will lose so much if the project is unable to reach them.

In southern Sudan, where our work is supporting orphans and young people affected by the civil war, the price of food has doubled in less than a year. This has meant that our partner has been unable to provide nutritional support (in the form of one meal a day) to 500 orphans in Yambio alone.

In Sierra Leone, where we are supporting two slum communities, the price of some staple foods and other materials, including fuel and building materials, has increased by over 60 per cent in the last 12 months. This has led to a significant shortfall in the budget for the construction of two community centres. Y Care International has managed to cover these shortfalls, but this puts pressure on our reserves. Inflationary pressures in Sierra Leone are likely to lead to continued problems for the YMCA in keeping within budget for the life of the project. If this happens, fewer people will benefit from the urgently needed support being provided to one of the world’s poorest communities.

Elsewhere, in Peru, currency fluctuations have affected the third year of a project supporting a refuse sorter community in El Milagro. The decreasing value of the Peruvian Nuevo Soles (PEN) has meant that our YMCA partner has 13 per cent less income than budgeted. This has meant that Y Care International has had to provide extra support and the work has also had to be scaled back.

With the current situation showing little signs of improving, our international partners in 22 countries around the world will have to make some very tough decisions in the coming months. At a time of increasing economic uncertainty in the UK and Ireland, Y Care International will be asking its supporters to maintain their commitment to standing by some of the world’s most vulnerable young people, to ensure that our work is not as badly affected by the current climate as it could be.