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Fighting inequality: At the heart of the new development agenda

Jun 19,2018 - Last updated at Jun 19,2018

One of the most important goals of development, any development, is to deliver returns to a people in a just and fair manner. Whether returns on their investment, on their efforts or their potential, everyone today expects, and is entitled to, fair and just return. Hence, equity and equality in opportunity and in distribution of returns are two of the very important pillars of a just society.

Income inequality is one of the most important issues that the 2030 Agenda for Sustainable Development attempts to address. In free market economies, not all inequality can be fought; in fact some level of inequality is useful to spur innovation and competition. However, entrenched and extreme inequality, the one that erodes opportunity and affects people’s ability to live a decent, dignified, healthy and educated life, is a scourge that must be fought. It is such inequality that drove one market seller in Tunisia to ignite, by setting himself on fire, a series of revolutions/events that left many areas in the Arab region in turmoil and broiling in conflict. Indeed, economic insecurity is a driving force behind violent conflicts in the Middle East, according to Kaushik Basu, former chief economist of the World Bank.

In fact, according to an article published in the Arab Weekly in January 2018, the “World Inequality Report 2018” has ranked the Middle East as the region leading the world in economic inequality. The World Inequality Lab’s report claims that the share of income accruing to the top 10 per cent and 1 per cent of the population in the Middle East exceeded 60 per cent and 25 per cent, respectively, of total regional income in 2016, which the report largely accrues to the oil ownership. Income inequality within Middle Eastern countries, however, is “more the result of entrenched elites, many of whom are from families that amassed wealth before independence”. In Lebanon, for example, the top 1 per cent of the population earns 23.4 per cent of the nation’s income; in Egypt, 19.1 per cent of national income accrues to the top 1 per cent, a higher rate than in oil-rich Kuwait, where the percentage stands at 17.7 per cent.

The Millennium Development Goals (MFGs) had made some progress in addressing the issue of inequality. There has been a significant reduction in poverty and gender inequality. However, according to the UNDP, most recent data show that the richest 10 per cent in the world earn up to 40 per cent of total global income, while the poorest 10 per cent earn only between 2 per cent and 7 per cent of total global income. In developing countries, inequality has increased by 11 per cent if we take into account the growth of population. To this day, many people’s incomes are affected by what their gender is and what nationality they hold. This is true among countries and also within them. Disparities exist between urban and rural settings, different ethnic minorities and indigenous people, nationals and migrants, etc.

It is a global problem that requires global solutions. Sustainable Development Goal (SDG) 10, which aims to reduce inequality within and among countries, attempts to address this issue in a much more comprehensive manner than through the MDGs. SDG 10 focuses on targets such as attaining and sustaining the income growth rate of the bottom 40 per cent of the populace at a higher rate than the nationwide average, and promoting political and economic inclusion of everyone in the world, regardless of age, disability, race, sex, religion, economic, ethnicity or origin or any other status. It encourages policy reform to remove discriminatory practices, laws and policies, and calls for adopting wage policies, social protection and fiscal policies, to attain greater equality. This also involves more inclusion for developing nations in global decision making and in global financial institutions, such as the World Trade Organisation. For example, the International Monetary Fund, through its recent quota reform, has increased the share of developing countries’ vote to 37 per cent in 2016, up from 33 per cent in 2010. That increase is, however, still short of the 74 per cent they represent in the membership. Duty free treatment and favourable access conditions for exports from least developed and developing countries have expanded. From 2005 to 2015, the proportion of tariff lines globally with duty-free treatment for products that originate in developing countries increased from 41 per cent to 50 per cent; for products that originate in the least developed countries, the proportion rose from 49 per cent to 65 per cent.

Some improvements have been made so far, yet much still needs to be made. This involves improving representation of developing countries in international forums, and improving regulation, both within countries and between them. The SDGs also encourage global partnerships in monitoring financial markets and providing development assistance and foreign direct investment to regions where the need is greatest. Facilitating the safe migration and mobility of people is also key to bridging the widening divide. Internally within countries, this requires enhanced fiscal management and transparency. It involves creating decent work, providing social protection and education services for people to be able to realise their potential. This in turn will contribute to enhancing national and regional stability.

 

The writer is National Information Officer at the UN Information Centre in Beirut. She contributed this article to The Jordan Times

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