Liv­ing free and equal

Financial Mirror (Cyprus) - - FRONT PAGE -

In the quar­ter-cen­tury since the pub­li­ca­tion in 1990 of the first Hu­man De­vel­op­ment Re­port, the world has made as­tound­ing strides in re­duc­ing poverty and im­prov­ing the health, ed­u­ca­tion, and liv­ing con­di­tions of hun­dreds of mil­lions of peo­ple. And yet, as im­pres­sive as th­ese gains may be, they have not been dis­trib­uted equally. Both be­tween coun­tries and within them, deep dis­par­i­ties in hu­man de­vel­op­ment re­main.

Con­sider in­fant mor­tal­ity. In Ice­land, for ev­ery 1,000 live births, two chil­dren die be­fore their first birth­day. In Mozam­bique, the fig­ure is 120 in­fant deaths for ev­ery 1,000 live births. Sim­i­larly, in Bo­livia, ba­bies born to women with no ed­u­ca­tion are twice as likely to die within a year than ba­bies born to moth­ers with at least a sec­ondary ed­u­ca­tion. And th­ese dis­par­i­ties con­tinue through­out a per­son’s life. A five-year-old child born in a low-in­come house­hold in Cen­tral Amer­ica is, on av­er­age, six cen­time­tres shorter than a child born in a high-in­come house­hold.

Such dif­fer­ences have taken root for a va­ri­ety of rea­sons. Th­ese in­clude “ver­ti­cal in­equal­i­ties,” like skewed in­come dis­tri­bu­tion, as well as “hor­i­zon­tal in­equal­i­ties,” such as those that ex­ist within groups be­cause of fac­tors like race, gen­der, and eth­nic­ity, and those that form be­tween com­mu­ni­ties, ow­ing to res­i­den­tial seg­re­ga­tion.

Many peo­ple face dif­fer­ent, si­mul­ta­ne­ous forms of dis­crim­i­na­tion, and the de­gree of ex­clu­sion they suf­fer is a re­sult of the in­ter­ac­tion among them. A com­bi­na­tion of ver­ti­cal and hor­i­zon­tal in­equal­i­ties can gen­er­ate ex­treme ex­clu­sion and marginal­i­sa­tion, which in turn per­pet­u­ates in­ter­gen­er­a­tional poverty and inequal­ity.

For­tu­nately, the world has be­come in­creas­ingly aware of inequal­ity’s per­ni­cious ef­fects on democ­racy, eco­nomic growth, peace, jus­tice, and hu­man de­vel­op­ment. It has also be­come clear that inequal­ity erodes so­cial co­he­sion, and in­creases the risk of vi­o­lence and in­sta­bil­ity.

Ul­ti­mately, eco­nomic and so­cial poli­cies are two sides of the same coin.

Be­sides the moral ar­gu­ment for re­duc­ing inequal­ity, there is also an eco­nomic ar­gu­ment. If inequal­ity con­tin­ues to rise, higher growth will be needed to erad­i­cate ex­treme poverty than if the eco­nomic gains were more evenly dis­trib­uted.

High lev­els of inequal­ity are also cor­re­lated with the pos­si­bil­ity of po­lit­i­cal cap­ture by elites who de­fend their in­ter­ests by block­ing egal­i­tar­ian re­forms. The prob­lem with inequal­ity is not only that it ob­structs the pur­suit of col­lec­tive goals and the com­mon good; it also erects struc­tural bar­ri­ers to de­vel­op­ment, for ex­am­ple, through mea­gre or re­gres­sive tax­a­tion and un­der­in­vest­ment in ed­u­ca­tion, health, or in­fras­truc­ture.

Growth alone can­not guar­an­tee equal ac­cess to pub­lic goods and high-qual­ity ser­vices; de­lib­er­ate poli­cies are re­quired. Re­cent his­tory in Latin Amer­ica, the most un­equal re­gion in the world, pro­vides a good ex­am­ple of what is pos­si­ble when such poli­cies are put in place. The re­gion made sig­nif­i­cant gains in so­cial in­clu­sion dur­ing the first decade of this cen­tury, through a com­bi­na­tion of eco­nomic dy­namism and sus­tained po­lit­i­cal com­mit­ment to fight­ing poverty and inequal­ity as in­ter­de­pen­dent prob­lems.

Thanks to th­ese ef­forts, Latin Amer­ica is the only re­gion in the world that man­aged to re­duce poverty and inequal­ity, while con­tin­u­ing to grow eco­nom­i­cally. More than 80 mil­lion peo­ple have joined the mid­dle class, which for the first time has sur­passed the poor as the largest seg­ment of the re­gion’s pop­u­la­tion.

To be sure, some have ar­gued that this was made pos­si­ble by favourable ex­ter­nal con­di­tions, in­clud­ing high com­mod­ity prices, which sup­ported eco­nomic ex­pan­sion. How­ever, ev­i­dence from the World Bank’s LAC Equity Lab con­firms that growth ex­plains only part of Latin Amer­ica’s so­cial gains; the rest was due to re­dis­tri­bu­tion through so­cial spend­ing.

In­deed, pro­gres­sive poli­cies were at the heart of the eco­nomic ex­pan­sion it­self: a new gen­er­a­tion of bet­tere­d­u­cated work­ers en­tered the labour force, earn­ing higher salaries and reap­ing the div­i­dends of so­cial spend­ing. The largest wage in­creases oc­curred in the low­est in­come brack­ets.

Now that Latin Amer­ica has en­tered a pe­riod of slower eco­nomic growth, th­ese achieve­ments are be­ing put to the test. Govern­ments have less fis­cal space, and the pri­vate sec­tor is less able to cre­ate jobs. Ef­forts to re­duce poverty and inequal­ity are at risk of stalling – or even of los­ing hard-won gains. The re­gion’s pol­i­cy­mak­ers will have to work hard to main­tain progress on long-term hu­man de­vel­op­ment.

The im­por­tance of tack­ling inequal­ity is en­shrined in the ideals of the French Rev­o­lu­tion, the words of the United States Dec­la­ra­tion of In­de­pen­dence, and in the tar­gets es­tab­lished by the United Na­tions Sus­tain­able De­vel­op­ment Goals. The ef­fort is at the root of shap­ing a world that is not only fair, but also peace­ful, pros­per­ous, and sus­tain­able. If, as the Uni­ver­sal Dec­la­ra­tion of Hu­man Rights puts it, “all hu­man be­ings are born free and equal in dig­nity and rights,” should we not all be able to con­tinue to live that way?

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