beyondbrics

Discussion on emerging market growth usually centres on how factors such as inflation, industrial production or even corruption can affect the economies of these countries.

However, a report released this week offers a timely reminder at how malnutrition, an obvious symptom of poverty, is eroding the economic prospects of developing nations, from India and Bangladesh to Peru and Nigeria, which are only just recovering after the fall-out of the financial crisis.

Malnutrition, while not a new problem, has in recent years been exacerbated by a combination of factors such as climate change, volatile food prices, demographic shifts and of course renewed economic uncertainty.

And while the humanitarian reasons for tackling malnutrition have been widely reported, the economic case is often overlooked. Billions of dollars are wasted in forgone productivity and avoidable healthcare spending.

According to “A Life Free from Hunger: Tackling Child Malnutrition“, a report by charity Save the Children, 2.6m children die every year as a result of malnutrition, a huge loss in the workforces of affected countries. For those that survive, the lack of nutritious food together with infection and illness means that their bodies and brains do not develop in the way they should – which inevitably hinders the economic progress of a nation. At least 170m children are affected by stunting worldwide.

As much as 3 per cent of the gross domestic product of a country is wiped out to malnutrition, reducing the productivity of people trying to work their way out of poverty in the world’s poorest countries. The World Bank puts the annual cost of malnutrition across the 20 highest-burden countries at $121bn in 2010 .

The report from Save the Children suggests that tackling malnutrition in early life can lead to as much as a 46 per cent increase in earnings as an adult.

Jeffrey Sachs, economist and special adviser to the UN secretary-general on the Millennium Development Goals emphasised the point on Wednesday saying that: ”Nutrition is at the base of human development and we understand more and more that if you miss the critical period of ages 6 months to 2 years you can miss a whole life time.”

Stunting at age two is associated with a reduction in schooling of almost one year, with a 16 per cent increase in risk of failing at least one grade.

A 1 per cent loss in adult height due to childhood stunting is associated with a 1.4 per cent loss in productivity and iron deficiency anaemia has been associated with a 17 per cent loss of productivity in heavy manual labour, an occupation that in many developing countries is often held by the poorest in society.

However, while countries such as India have in the past been quick to speak out about how double digit growth will automatically help those at the bottom of the pyramid — including the more than 400m people who live on less than $1.25 a day — GDP growth alone does not guarantee an improvement in nutrition.

According to Save the Children, between 1990 and 2009, the GDP per capita in Vietnam grew at an average annual rate of 6 per cent but the percentage of children who were stunted fell below that rate, at just under 4 per cent. In Myanmar, while GDP rose 8 per cent annually, stunting declined by only 1.5 per cent.

In India, which has seen GDP per capita grow by an average of 4.8 per cent a year over the same period, nearly 50 per cent of the children in the country are stunted.

If governments truly take their economic growth seriously, empty rhetoric needs to be replaced with effective implementation of policies on the ground. The hope that prosperity will gradually trickle-down to those less fortunate is unrealistic. Instead leaders should think about how a marginal increase on spending to improve the nutrition of its children can be a win-win situation for all.

Related reading:
Food security: Dampened prospects, FT
Feeding the 9bn, FT
World Food Situation, Food and Agriculture Organization of the United Nations
In depth: The global food crisis, FT