From past to present to future. Reducing inequality as a global goal



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From past to present to future. Reducing inequality as a global goal

In the morning of its Dies Natalis ISS is orgazing an international conference on t the Millenium Development Goals. In September 2015 the General Assembly of the UN is expected to issue a statement on the Post 2015 Development Agenda and adopt the so-called Sustainable Development Goals (SDGs). The SDGs are the successor of the Millennium Development Goals (MDGs) that were formulated in 2000 and ended in 2015.


Participation by invitation only. Organizer: Peter van Bergeijk

Preliminary programme of the conference (confirmed speakers)




9.30

Coffee and registration




9.45

Welcome

Peter van Bergeijk







Freek Schiphorst Chair

Session 1 SDGs

10.00

Global governance: past boldness, present weakness and challenges for the future.

Richard Jolly

10.15

Financing for Sustainable Development: plus ca change or real reform?

Rob Vos

10.30

The Tyranny of an Acronym

Jan Vandemoortele

10.45

Discussion

Starter: Mohammed Salih

11.15

Coffee




Session 2 Inequality

11.30

Thirty Years in Africa's Development: from Structural Adjustment to Structural Transformation'

Tony Addison

11.45

Is the recent decline of income inequality in Latin America permanent or transitory?

Andrea Cornia

12.00

Translating economic progress into sustainable development: the role of employment and wages / lessons from Asia

Malte Luebker

12.15

Policy scenarios for the global poor and the global rich

Andy Sumner

12.30

Catch Up and Emerging Divergences:

How Can it Reduce Inequality?



Deepak Nayyar

12.45

Discussion

Starter: Mansoob Murshed

13.30

Lunch






Professor Richard Jolly IDS, Sussex (former ASG UN)


Richard discusses, based on his vast experience as a scholar, activist and major player in the UN system, whether we still need a development agenda and if so, whether the post 2015 agenda fits the bill. In his contribution “Global governance: past boldness, present weakness and challenges for the future” Richard will also review earlier spells in the UN when development goals were set both in general such as the UN Development Decades , of which the first was from 1860 to 1970 and in more specific areas such as those for children.

Professor Rob Vos, Director at FAO, Rome and Prof ISS


Rob in his academic work, as well in his previous position as Director of Development Policy at UNDESA, has been always very critical of the current international financial system. The SDG agenda aspires to reach the eradication of hunger and poverty, inclusive global development, while protecting the environment and ensuring peace and security. Existing policies and global economic governance arrangements are grossly inadequate to realize the “future we want”, as defined through the SDGs. So, the success of the new agenda will hinge on ambitious shifts in policies and unprecedented levels of global cooperation. The development setbacks caused by the global financial and economic crisis of 2008-2009 that originated in systemic failures of the financial systems in the United States and Europe brought to evidence that financial stability is a global public good to be nurtured as part of the post-2015 development agenda. Financing needs for sustainable development are enormous. Eradicating poverty and hunger will require substantial additional investments, especially in agriculture and rural areas. Greening of economies worldwide will require scaling up of green technologies, overhauls of energy systems and the supportive infrastructure, reversal of deforestation and erosion of soils and other natural resources, and so on. More inclusive growth would in most contexts also require a significant scaling up of social protection systems and investments in human capital.
Rob Vos’ contribution will assesses the shortcomings in the present system to provide the financial stability and the resources needed to fulfil the promise of the SDGs. Next he will discuss options for reform that would be needed. His contribution will focus on three directions: (a) regulatory reforms to stem volatility in (private) financial flows and promote funding of investments in sustainable development; (b) systemic reforms to the international monetary system to better reflect today’s realities of changed economic power relationships and the needs of the SDG agenda (including by leveraging international reserves for investments in sustainable development); and (c) innovative financing arrangements to underpin the provision of global public goods and reconfiguration of the international development finance architecture.
These issues are also at stake at the 3rd International Conference on Financing for Development that will be held in Addis Ababa in July 2015 as follow-up to the Monterrey Consensus, which served as the financial underpinning of the MDG agenda. However, alike was the case with “Monterrey”, the odds are that outcome of “Addis” will leave much desired in terms of the required reforms, but the contribution will give that verdict following the Conference. The outcome of “Addis” will also provide the basis for a commentary on the political feasibility of inducing the transformative changes needed to realize the future we want and for the world to put the money where its mouth is.

Dr. Jan Vandemoortele, Independent scholar, Former Director UNDP New York


There has been massive criticism on the precursors of the DSGs, the MDGs that had 2015 as target date. Criticism includes the way the MDGs have been developed and formulated, especially their lack of an underlying development theory, how they have operationalized, how they have been implemented and how this has led in a distortion of setting development priorities for structural change. Jan reviews to what extent the criticism on the MDGs have led to an improvement in the SDGs.

The MDGs have been the subject of harsh comments, many of them valid. Yet, the fact that stakeholders are spending so much time and effort on the scaffolding for the successor arrangement – called the SDGs – shows that global targets have a place. The challenge now seems to be keeping them in their place.


In examining the reasons of the MDGs staying power, despite tough criticism, the article will address the often neglected but essential question: What is the precise purpose of global targets?
Jan will argue that the SDGs fall short on three dimensions: (i) three C’s – for clarity, conciseness and computability, (ii) inequality and (iii) universality.

Most of these shortfalls stem from the differences in context between the times when the MDGs emerged and now when the SDGs are being formulated.


The biggest danger for the SDGs is the tyranny of the acronym, in that reaching agreement in itself is supplanting the importance of a global development agenda and the very purpose of a simple list of global targets. The reasons why most stakeholders accept this tyranny vary, ranging from lack of leadership to clinging to old world views, and sheer parochialism about petty mandates

Dr. Malte Luebker , Senior Wage Specialist ,ILO, Bangkok


While the MDGs deserve credit for their contribution in shifting the development paradigm from the pursuit of economic growth to a people-centred approach, a common initial criticism was that they lacked a dimension that is critical for well-being most people: access to decent and productive employment. This obvious omission led to the addition of Target 1b), but employment was essentially conceptualized as an outcome of development – a target to be achieved, not a driver of development itself. This paper will argue that, in fact, what happens in the labour market shapes the social outcomes of economic development. When striving ‘for a world that is just, equitable and inclusive’ (A/RES/66/288), policy makers cannot afford to ignore what happens in the labour market.
Asia offers interesting lessons in this regard. While rising wages and employment generation in countries like China are crucial to explain the remarkable fall in absolute poverty, many of the inequities associated with the region’s development trajectory find their origin in labour markets. This hold for shifts in the functional distribution of incomes and the fall in the labour share in national income, as well as for rising inequality in the personal distribution – which, in part, are driven by wage stagnation at the bottom and substantial gains at the top of the distribution. Meanwhile, social insurance and transfer systems that could correct these outcomes through redistribution remain underdeveloped in most Asian countries. The paper argues that to reduce inequality and to ‘ensure a just share of the fruits of progress to all’ (Declaration of Philadelphia, 1944), policy makers need to revisit the role of wage-setting mechanisms and other labour market institutions that influence distributional outcomes – a process that, fortunately, has begun in many countries across Asia.
One of the strongest criticisms on the MDGs was that these lacked a goal on employment, and, although a goal was added in the course of the process, the MDGs lacked throughout any meaning full policy prescriptions, nationally as well as internationally, to deal with the problem of growing precarious employment. Malte reviews how especially the young generations looks at challenges of employment and whether national governments and international organisations take these concerns sufficiently into account.

Professor Tony Addison, UNU-WIDER Helsinki


Thirty years ago Africa was in the middle of a painful process of economic adjustment, the legacy of which is still felt today. By the early 1980s, a combination of global economic shocks and failed development strategies, had pushed the region into a severe economic downturn. While much of Asia enjoyed an unprecedented economic boom, much of Africa saw declining output and deepening poverty. Inequality rose as formal employment contracted, the informal sector offered little in the way of income, and there was a general stagnation in agriculture (the main livelihood of the poor). Structural adjustment promised a quick turn around in economies, but in the event was wildly over-optimistic regarding the supply-side response of agriculture. Much of the region's manufacturing collapsed, unable to compete at world prices. Thirty years on, and Africa is growing, yet progress is fragile. The region is still dependent on primary export earnings and the recent downturn in oil and metals prices has hit exporters. Ghana is back in the hands of the IMF. There is much discussion of structural transformation in the region, but unless Africa is able to create more remunerative employment, and reduce regional inequality, then overall inequality will remain high. Better use of natural resource revenues is critical, including the use of the revenues to fund social protection, infrastructure investment, and more employment generation. If this is not achieved then inequality will remain high, and sub-Saharan Africa will face the political turmoil that has characterized much of North Africa.

Professor Andrea Cornia, University Florence


In the first decade of the 21th century various Latin American countries saw declines in income inequality. However in most cases these declines were small and did not reduce at all the ‘lead position’ that Latin American Countries have in the inequality league. These declines in inequality were partly the result from deliberate policies and partly from windfall gains in international commodities. In view of the current decline in primary commodity prices, Andrea reviews how robust actually policy measures to decrease inequality have been and discusses whether the Latin American political system is able to deal in an equitable way with these negative external trends and what effect this may have on erstwhile policies to reduce inequality.
Latin America has for long been the region of the world with the highest income inequality. During the 'lost decade' of the 1980s and structural adjustment years of the 1990s inequality rose further. However, between 200 2 and 2012 the region recorded an average six point decline in the Gini coefficient which coincided with the massive arrival to power of centre-left regimes. The immediate causes of the inequality decline were a drop in the skill premium following an expansion of secondary education, especially among the children of low income families, an increase in well targeted social assistance transfers financed by a rising and more equitable taxation, a substantial increase in minimum wages, and macroeconomic policies that were fairly orthodox and yet attentive to their distributional impact. Among the underlying determinant of the inequality drop, the gains in terms of trade, remittances, FDI and financial inflows recorded until 2008 played a favorable but not central role, though their impact was visible in countries where such flows were sizeable. Interestingly, inequality declined also during the difficult years of 2009-12 during which the global economy deteriorated sharply. However the 2013 data suggest that, while it continued falling in four countries, inequality rose in twice as many of them in parallel with the growing political difficulties experienced in Brazil, Argentina, Venezuela and other nations which found it difficult to extend their social-democratic approach to inequality under deteriorated global economic conditions and in the absence of more structural reforms in the filed of higher education, taxation, industrial policy and access to assets.

Professor Andy Sumner, Kings College, UN of London


When investigating poverty and inequality trends, Andy was one of the scholars who drew attention to the fact that most of world’s poor do not live in poor countries. This posed a clear challenge to the conventional opinion of the ‘development aid industry’ that policy attention should be mainly, if not exclusively concerned with poor countries. Challenging large and sometimes growing inequality in emerging countries had therefore to be of equal concern for international support and solidarity. In his contribution Andy will consider various national and international policy scenarios that affect the global poor and the global rich and poses the question how and whether these could be part of the post 2015 Development Agenda.
In this paper we explore who have been the winners and losers from global growth since 1990. We find that falls in total global inequality in the last 30 years are predominantly attributable to rising prosperity in China. We also identify a persistent global structure of two relatively homogeneous clusters (the poor/insecure and secure/prosperous). We detect the emergence of a ‘new global middle’ but question whether this implies the end of the historical two-cluster world rather than merely a transition as some people move from the poor/insecure cluster into the secure/prosperous cluster. We also find just a modest amount of redistribution would have ended $2 poverty. Persistence of global poverty, it seems, is not due to insufficient global growth but to a reluctance among the secure/prosperous cluster to forego a small share of their benefits from global growth in favour of fairly modest redistribution to the global poor.

Professor Deepak Nayyar, Emeritus Professor of Economics, Jawaharlal Nehru University, New Delhi


The past five decades have witnessed an increase in the share of developing countries not only in world population and world income but also in international trade, international investment, industrial production and manufactured exports. This catch up, which gathered momentum after 1980, has been driven by economic growth associated with rapid industrialization. But the process is characterized by uneven development and emerging divergences. There is an exclusion of countries, of regions within countries, and of people, from the process. Poverty persists in countries despite their rapid economic growth, rising share in world income, and catch up in industrialization, because economic inequality between people within countries has been increasing. Yet, catch up on the part of poor countries, even in the aggregate, should increase the possibilities of meaningful development, which improves the wellbeing of ordinary people, provided there is no countervailing increase in economic inequality. This essay will seek to analyze whether catch up can, and if so how, reduce inequality to realize the potential. In doing so, it will argue that the ongoing catch up in terms of faster economic growth in the developing world is sustainable if and only if its benefits are distributed in a far more equal manner between people and regions within countries.

References

AIV (Advisory Council on International Affairs to the Dutch Government) (2011) The Post-2015 Development Agenda: The Millennium Development Goals in Perspective, Advisory Report 74, The Hague , http://aiv-advies.nl/6cq/publications/advisory-reports/the-post-2015-development-agenda-the-millennium-development-goals-in-perspective


Dagdeviren, H., R. van Der Hoeven, .and J.Weeks ( 2002) Poverty Reduction with Growth and Redistribution in Development and Change Vol.33-3
Fukuda-Parr, S. (2014) Global Goals as a Policy Tool: Intended and Unintended Consequences, Journal of Human Development and Capabilities: A Multi-Disciplinary Journal for People-Centered Development, 15:2-3, 118-131, DOI: 10.1080/19452829.2014.910180
High-Level Panel of Eminent Persons on the Post-2015 Development Agenda, (2013), A New Global Partnership: Eradicate Poverty And Transform Economies Through Sustainable Development, United Nations Publishing http://www.un.org/sg/management/pdf/HLP_P2015_Report.pdf
van der Hoeven, R. (ed.), 2011, Employment, Inequality an Globalization , A continuous concern, Routledge
van der Hoeven, R.E. (2014). Full Employment Target: What Lessons for a Post-2015 Development Agenda? Journal of Human Development and Capabilities. doi: http://dx.doi.org/10.1080/19452829.2014.883370
Nayyar, D. (2013) The Millennium Development Goals Beyond 2015: Old Frameworks and New Constructs, Journal of Human Development and Capabilities:A Multi-Disciplinary Journal for People-Centered Development, 14:3, 371-392, DOI: 10.1080/19452829.2013.764853
Nayyar, D. (2013b) Catch Up, Developing Countries in the World Economy, Oxford, OUP
Palma, G. ( 2011) ‘Homogeneous Middles vs. Heterogeneous Tails and the End of the Inverted-U: It is all about the share of the Rich’ in Development and Change Vol.42-1
Saith, A.(2006) ‘From Universal Values to Millennium Development Goals: Lost in Translation’, Development and Change, 37(6), 1167-1199
Saith, A. (2011) ‘Inequality, imbalance, Instability: Reflections on a Structural Crises’ in Development and Change Vol.42-1
The Economist (2015) Unsustainable Goals March 28th 2015
UNDP (2013) Humanity Divided: Confronting Inequality in Developing Countries, New York
UN System Task Team on the Post-2015 UN Development Agenda (2013) Statistics and indicators for the post-2015 development agenda. New York, NY: United Nations. Available online at: http://www.un.org/en/development/desa/policy/untaskteam_undf/UNTT_MonitoringReport_WEB.pdf
UNCTAD (2014), The least developed countries report 2014, Growth with Structural Transformation: A post 2015 development Agenda, Geneva
United Nations Development Group UNDG (2013) A Million Voices, the world we want, A sustainable future with dignity for all, New York
Vandemoortele , J .(2011) ‘ The MDG Story: Intention Denied’ in Development and Change Vol.42-1

Contact info

Peter van Bergeijk

bergeijk@iss.nl

+31625047264





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