Time for economic inclusion
IF THERE is one thing the current state of affairs has shown us, it is that we should not return to the economic realities we consider normal.
For the past 40 years, the neo-liberal economic model, which has sustained extreme inequalities, has been how we have organised economic relationships. The free market set-up might have worked for a select powerful few, but it has not worked for the masses.
The world continues to battle intricately intertwined socio-economic ills; challenges that have become so commonplace that they no longer shock us.
Then there is the ever-widening chasm between the rich and powerful and the marginalised. According to the UN’s World Social Report 2020, inequality is growing for more than 70% of the global population.
Oxfam said the neo-liberal model has generated unacceptable levels of wealth and income inequalities that have fuelled violence, undermined poverty eradication, corrupted politics and hindered economic growth.
Instead of improving overall human life, the free-market model has paved the way for ever-increasing company profits and salaries of those in power. A report by PwC has revealed that in 2018, the chief executives of South Africa’s largest companies earned 64 times the wages of their workers.
Together with illicit financial flows, aggressive tax-avoidance strategies and exerting pressure on developing nations to concede generous tax incentives in exchange for foreign direct investments, the paradigm of exploitation is hurting the vulnerable masses the most, and with that our entire society. Fewer taxes coming in means governments have fewer funds for social services.
It cannot be disputed that public sector corruption is one of the reasons for unavailability of adequate resources. The funds lost through illicit financial flows pale in comparison. And it is the neo-liberal paradigm that legitimises, normalises and reproduces the instruments and corporate practices relating to tax evasion and illicit financial flows.
Neo-liberalism has also influenced a culture of austerity measures, privatisation, downsizing of the government and limiting its restrictions and regulations on the private sector.
The Covid-19 pandemic has shown us that the cornerstone of a better world is a resilient, corruption-free and efficient public sector that has the means to deliver public services, enhance social protection and create an environment conducive to economic growth that sustains people, the planet and businesses equally. It is the public sector that has stepped up to play the primary role in the response to the pandemic and the associated economic crisis. The time has come for the public sector and developing nations to reassert their domain of influence instead of allowing the private sector to capture them.
It is time for an inclusive capitalism in which progress and development are not defined solely in terms of economic growth and wealth creation, but also in terms of the quality of human life and equitable levels of human, environmental and economic development. Above GDP as a measure of human progress and development, it is time we explore other measures which speak to the quality of human life. That is the post-Covid normal we want to aim for.
Father Muyebe is the director for Justice and Peace Department of the Southern African Catholic Bishops’ Conference. He writes in his personal capacity