So­cial Pro­tec­tion is Key to Tackle Asia-Pa­cific’s In­equal­ity Trap

Bhutan Times - - Home - Shamshad Akhtar

Ris­ing in­equal­ity threat­ens to de­rail, from the start, suc­cess­ful im­ple­men­ta­tion of the new 2030 Agenda for Sus­tain­able De­vel­op­ment in the Asia-Pa­cific re­gion. Stronger, more eq­ui­table so­cial pro­tec­tion will be crit­i­cal in overcoming th­ese chal­lenges.

New re­search by the United Na­tions Eco­nomic and So­cial Com­mis­sion for Asia and the Pa­cific (ESCAP) in­di­cates that in­equal­ity, re­lated to both out­comes and op­por­tu­ni­ties, is on the rise in the coun­tries of Asia and the Pa­cific – and where it has not risen it has re­mained un­ac­cept­ably high. This is hav­ing an ad­verse im­pact on sus­tain­able de­vel­op­ment.

Grow­ing dis­par­i­ties in in­come and wealth, as well as un­equal op­por­tu­ni­ties, re­in­force each other, cre­at­ing an “in­equal­ity trap” that dis­pro­por­tion­ately af­fects women and the most vul­ner­a­ble mem­bers of so­ci­ety, in­clud­ing the poor, youth, per­sons with dis­abil­i­ties, mi­grants and older per­sons.

This stands in sharp con­trast to both the shared growth that de­fined the rise of the ‘Asian Tigers’ in the 1960s, and more re­cent trends in other parts of the de­vel­op­ing world, in par­tic­u­lar Latin Amer­ica, where in­come in­equal­ity has been de­creas­ing over in re­cent decades.

Over the past 20 years, the rich in Asia and the Pa­cific have grown richer, at the ex­pense of the poor. In­equal­i­ties in re­gional op­por­tu­ni­ties also abound, with nearly 80 per cent of the pop­u­la­tion lack­ing ac­cess to af­ford­able health care, and as many as 18 mil­lion chil­dren out of school. Ac­cess to th­ese ba­sic so­cial ser­vices are con­sid­er­ably lower among low-in­come groups and ru­ral com­mu­ni­ties.

In the con­text of the 2030 Agenda, in­equal­ity casts deep shad­ows on all three pil­lars of sus­tain­abil­ity – eco­nomic, so­cial and en­vi­ron­men­tal.

Eco­nom­i­cally, in­equal­ity threat­ens re­gional dy­namism, is de­struc­tive to the sus­tain­abil­ity of growth, and makes it more dif­fi­cult to re­duce poverty through growth. Had Asia-Pa­cific in­equal­ity not in­creased, an ad­di­tional al­most 200 mil­lion peo­ple would have been lifted out of poverty in the three largest coun­tries in the re­gion over the last two decades.

In­equal­ity un­der­mines so­cial co­he­sion and sol­i­dar­ity. A grow­ing di­vide be­tween the rich and the poor is of­ten a fac­tor in ris­ing lev­els of crime and so­cial un­rest, un­der­min­ing trust and weak­en­ing bonds of sol­i­dar­ity. In ex­treme cases, es­pe­cially where in­equal­ity man­i­fests along eth­nic lines, it can lead to polarization, rad­i­cal­iza­tion and even fail­ure of the State.

En­vi­ron­men­tal sus­tain­abil­ity is also ham­pered by in­equal­i­ties, which cre­ate re­sent­ments and dis­in­cen­tives and, in turn, gen­er­ate per­va­sive free-rid­ing and overuse of re­sources, with un­sus­tain­able en­vi­ron­men­tal out­comes. For in­stance, ev­i­dence from In­dia and Nepal sug­gests that in­equal­i­ties in lo­cal ru­ral com­mu­ni­ties ac­tu­ally in­ten­sify de­for­esta­tion.

This is why tack­ling in­equal­ity must be cen­tral to the sus­tain­able de­vel­op­ment agenda. Per­fect equal­ity of wealth and in­come is not at­tain­able but, when it comes to in­equal­i­ties of op­por­tu­nity, such as ac­cess to health and education, Asia-Pa­cific gov­ern­ments should not set­tle for less than a per­fectly “level play­ing field.”

It is en­cour­ag­ing to see that, in ad­di­tion to tra­di­tional cash trans­fers, Asia-Pa­cific coun­tries are in­tro­duc­ing in­no­va­tive mea­sures to re­duce in­equal­i­ties, such as health equity funds, im­pact in­vest­ing in education, uni­ver­sal health cov­er­age and ex­pand­ing ac­cess to old-age pen­sions.

Build­ing on this mo­men­tum, coun­tries could also de­velop sets of com­ple­men­tary poli­cies to tackle in­equal­ity in all its forms:

First, na­tional tax­a­tion sys­tems could be strength­ened. There is am­ple room to ex­pand­ing the tax base and strengthen com­pli­ance frame­works across the re­gion. This is an ef­fec­tive way of broad­en­ing fis­cal space to fi­nance re­dis­tribu­tive mech­a­nisms, while build­ing sol­i­dar­ity across so­cioe­co­nomic groups and gen­er­a­tions.

Se­cond, pro­duc­tive and de­cent work should be even more strongly pro­moted. For­ward-look­ing macroe­co­nomic poli­cies, cou­pled with ac­tive labour mar­ket pro­grammes and poli­cies that en­cour­age di­ver­si­fi­ca­tion, in­clud­ing in­dus­trial up­grad­ing and pro­duc­tiv­ity growth are crit­i­cal. Such ap­proaches will en­sure that eco­nomic growth gen­er­ates more and bet­ter em­ploy­ment for peo­ple work­ing in vul­ner­a­ble con­di­tions, while avoid­ing a “race to the bot­tom” trig­gered by un­fet­tered in­ter­na­tional com­pe­ti­tion.

Third, so­cial pro­tec­tion should be en­hanced to en­sure that ev­ery­one has ac­cess to qual­ity es­sen­tial ser­vices. Trans­for­ma­tive so­cial pro­tec­tion poli­cies need to be an­chored in na­tional leg­is­la­tion and aim be­yond pro­vid­ing short-term safety nets, to lift peo­ple out of poverty and vul­ner­a­bil­ity. Com­ple­ment­ing their re­dis­tribu­tive role, well-de­signed and im­ple­mented cash trans­fers are an im­por­tant ve­hi­cle of in­clu­sive, pro-poor growth. Good prac­tices from around the re­gion il­lus­trate that com­pre­hen­sive so­cial pro­tec­tion sys­tems are fea­si­ble and af­ford­able but ne­ces­si­tate political will. Strength­en­ing the ev­i­dence base on in­equal­i­ties and so­cial pro­tec­tion will also fur­ther fa­cil­i­tate the de­vel­op­ment and im­ple­men­ta­tion of ef­fec­tive poli­cies and pro­grammes. In­no­va­tive fi­nanc­ing schemes, es­pe­cially in part­ner­ship with the pri­vate sec­tor, will be es­sen­tial in this re­gard.

Th­ese three pol­icy mea­sures ben­e­fit all, from in­di­vid­u­als and com­mu­ni­ties, to pub­lic in­sti­tu­tions and pri­vate ac­tors. They con­sti­tute a shared re­spon­si­bil­ity to in­spire new part­ner­ships and cre­ative ap­proaches, as we move to im­ple­ment the 2030 Agenda.

Asia-Pa­cific in­equal­ity can­not be ig­nored. To do so jeop­ar­dizes the fu­ture we want of a more pros­per­ous, in­clu­sive and sus­tain­able Asia-Pa­cific re­gion.

Dr. Shamshad Akhtar is an Un­der-Sec­re­tary-Gen­eral of the United Na­tions and Ex­ec­u­tive Sec­re­tary of ESCAP. She has also been the UN’s Sherpa for the G20 and served as Gov­er­nor of the Cen­tral Bank of Pak­istan and Vice-Pres­i­dent of the MENA Re­gion of the World Bank.

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