The economic cost of child undernutrition in PNG
A report into the economic cost of child undernutrition in Papua New Guinea was released today by Save the Children and Frontier Economics (Asia-Pacific).
Child undernutrition results in substantial increases in childhood mortality, physical disability, cognitive impairment and disease burden, with the potential to also affect future generations. It is particularly prevalent in low and middle income countries. For example, Papua New Guinea (PNG) records extremely high child stunting rates in the world (the primary indicator of undernutrition) with 49.5 percent of children under the age of 5 suffering from stunting.
The intergenerational effect of undernutrition can include:
- Losses in productivity from increased mortality: undernutrition in childhood leads to increased risk of death from disease, which leads to a direct reduction in the economy’s labour force.
- Losses in productivity from poor physical status and reduced cognitive function: childhood undernutrition (in particular stunting) leads to direct losses to a country’s economy through poor cognitive function and reduced human capital for the economy.
- Losses owing to increased health care costs: undernutrition in children contributes to impaired immunity, resulting in increased infection rates, which translates into increased utilisation of health centres and at-home treatments.
Yet, despite this, aid investment in nutrition in PNG is limited. For example, only 0.1% of Australian Official Development Assistance (ODA) to PNG in the years 2010 to 2012 was allocated to support nutrition interventions. Estimates of the economic cost of undernutrition could inform a reallocation of aid investment in PNG and domestic resources to improve child nutrition as a foundation for human and economic development. Accordingly, Save the Children engaged Frontier Economics to estimate the cost of undernutrition amongst children under five in PNG.
This ground-breaking report reveals that child undernutrition is estimated to have cost the PNG economy up to $USD 1.5 billion in FY 2015-16, representing 8.45% of its gross domestic product. This figure significantly exceeds PNG’s budget for health and education services and highlights the need for targeted investment in nutrition to ensure inclusive and sustainable economic development.
Frontier Economics partnered with Save the Children to undertake this project, providing a solid framework for examining this significant policy issue – drawing on economic principles and official literature, and considering country-specific and global data to estimate the economic impact of undernutrition amongst children under five.