Duncan Green; 3/9/08
“Massive poverty and obscene inequality are such terrible scourges of our times — times in which the world boasts breathtaking advances in science, technology, industry and, wealth accumulation — that they have to rank alongside slavery and apartheid as social evils.” Nelson Mandela, London, 2005 From cradle to grave, a person’s life chances are dominated by the extraordinary inequality that characterises the modern world. A girl born in Australia will almost certainly live to old age (provided she is not indigenous). If she is born in Sierra Leone, however, she has a one in four chance of dying before her fifth birthday. An Australian girl can expect to go to school and university and to be healthy and cared for through to old age. In Sierra Leone only two in three girls start school and of those many drop out, deterred by the “user fees” or by the low standards of education, or forced to stay home to care for brothers and sisters or to find work to feed the family. Only one in four women are able to read and write. University is an impossible dream.
The Australian, The Australian Literary Review, No Internet Text; See also: http://www.oxfam.org.au/publications/from-poverty-to-power/From-Poverty-to-Power.pdf
The extent of global inequality is breathtaking. The income of the world’s 500 richest billionaires exceeds that of its poorest 416 million people. Every minute of every day, somewhere in the developing world, a woman dies needlessly in childbirth or pregnancy and 20 children are killed by avoidable diseases such as diarrhoea or malaria. Governments spend least on health care where the need is greatest.
Ending this lottery by birth is perhaps the greatest global challenge of the 21st century. And it concerns all nations because poverty and suffering are not confined within borders but spill over in the form of conflict, migration and environmental degradation.
Within countries, inequalities are extreme and rising. Children born into the poorest 20 per cent of households in Ghana or Senegal are two to three times more likely to die before age five than children born into the richest 20 per cent of households. In Britain, the Scientific Reference Group on Health Inequalities has found that life expectancy in the country’s wealthiest areas is seven to eight years longer than in the poorest.
Inequality compounds and often stems from discrimination based on sex, race or caste. Black Brazilians are twice as likely as whites to die a violent death and are only one-third as likely to go to university. .In Guatemala, the number of children of European descent dying before age five is 56 in every 1000, compared with 79 of every 1000 indigenous children.
In the Indian states of Uttar Pradesh and Bihar, primary school enrolment for scheduled caste and scheduled tribal girls is 37 per cent, compared with 60 per cent for girls from non-scheduled castes. Among boys from non-scheduled castes, 77 per cent are enrolled.
This is a stark picture of a fractured world but these statistics on health and wealth are only part of the story. Inequality is about much more than differences in income. Those on the losing end experience a deep sense of powerlessness, frustration, vulnerability and exclusion from the decisions that affect their lives, as well as a lack of access to basic services such as health care, education or banking.
Nowhere is the injustice of inequality more evident than in the phenomenon of missing women. Due to discrimination against girls and women that starts even before birth through selective abortion, the world’s female population is lower than it should be. Recent estimates put the number of missing women at 101.3 million, more than all people killed in all the wars of the 20th century. Eighty million of these are Indian or Chinese: a staggering 6.7 per cent of the expected female population of China and 7.9 per cent of the expected female population of India.
Oxfam, for whom I work, and other non-government organisations have long highlighted the moral repugnance of such social and economic divides. There is something grotesque about a system that allows 800 million people to go hungry while obesity blights millions of lives in rich countries.
Extreme inequality provokes outrage because it violates the widely held notion that all people enjoy certain basic rights. Addressing inequality is essential if countries are to live up to their obligations under the international human rights framework established by the UN, to guarantee equal civil and political rights and to pursue the “progressive realisation” of economic, social and cultural rights.
Yet inequality and redistribution have been out of fashion with rich country decision-makers for many years and warrant barely a mention in the millennium development goals that emerged during the course of the 1990s. In sway to the Washington Consensus view that “a rising tide lifts all boats”, rich country leaders believed that economic growth alone would be enough to address poverty. The manifest failure of that approach has prompted increasing criticism. Academic literature had previously stressed the positive potential for inequality to reward wealth creators and so encourage innovation and economic growth. Now many economists believe it is equality that is good for growth and makes that growth more effective at reducing poverty. They argue that inequality:
Wastes talent. If women are excluded from top jobs, half the nation’s talent is squandered. If all states in India were to perform as well as the best (Karnataka) in eradicating sexual discrimination in the workplace, national output would increase by one-third.
Undermines society and its institutions. In an unequal society, elites find it easier to “capture” governments and other institutions, and use them to further their own narrow interests, rather than the overall economic good.
Undermines social cohesion. “Vertical inequality” between individuals is linked to rises in crime, while “horizontal inequality” (for example, between different ethnic groups) increases the likelihood of conflicts that can set countries back decades.
Limits the impact of economic growth on poverty. A one percentage point increase in growth will benefit poor people more in an equal society than in an unequal one.
Transmits poverty from one generation to the next. Most cruelly, the poverty of a mother can blight the lives of her children. Each year in developing countries about 30 million children are born with impaired growth due to poor nutrition. Babies born with a low birth weight are much more likely to die, and should they survive, are more likely to face a lifetime of low educational attainment, sickness and poverty.
While inequality has received greater academic attention, rich country decision-makers shy away from the obvious response: redistribution of the kind that occurred in Europe after World War II or in the New Deal in the US. When rich world leaders talk about development, they appear more comfortable talking about poverty than about inequality, let alone redistribution. One World Bank economist, who fought for decades to get inequality taken seriously, has a cynical view: “The concern with poverty is a price the rich are willing to pay so that no one questions their incomes.”
So, what needs to happen?
The answer to inequality is redistribution. However politically unfashionable the word, (and perhaps we need to find anew word to liberate the concept), it is a mathematical truism that for inequality to fall, the poor need proportionately more of the cake. Moreover, redistribution holds the key to “making poverty history”. The idea of ending poverty is not new, but the difference is that the global economy has the resources to make it happen. The 20th century delivered extraordinary progress in health, education, democracy, technology and economic growth. Each year, the global economy churns out about $US9543 ($10,965) worth of goods and services per man, woman and child — 25 times the $US365 per annum that defines the “extreme poverty” of a billion human beings. There is more than enough to go around. According to the UN, $US300 billion a year would lift everyone on the planet above the extreme poverty line of $US1 a day. That is one-third of each year’s global military spending, or according to economist and author Joseph Stiglitz, one-tenth of the cost of the Iraq war.
There are plenty of success stories to learn from. In several East Asian countries, elites have embraced the long-term case for equality to prevent social division and to stoke a thriving economy. Taiwan and Vietnam have combined astonishing growth with high levels of equity. Indonesia and Malaysia have managed to reduce inequality through government-led redistribution and generation of employment.
In Brazil under the governments of Fernando Henrique Cardoso and Luiz Inacio Lula da Silva, popular movements have carried business elites along in redistributing wealth and opportunity in a hitherto appallingly unequal society. In the past decade Brazil has managed to tackle inequality through a mixture of good economic management (for example, controlling inflation, which customarily hits poor people hardest) and redistributing income to the poor through various government schemes such as the Bolsa Familia, which pays poor families a monthly stipend if they ensure their children attend school. As a result, five million Brazilians have been lifted out of poverty and inequality has fallen to its lowest level in 30 years.
But redistribution has to be comprehensive, including not only assets and opportunities, but more fundamentally, power itself. Politics or group decision-making is fundamentally about power the ability to achieve a desired end with or without the consent of others. Who has it, how they wield it, why they use it: power shapes our interactions and permeates the innermost thoughts of individuals and groups.
The process of empowerment can reap extraordinary benefits. In July 2007, the Chiquitano people of Bolivia won legal title to the indigenous territory of Monteverde, home to 120,000 people. The Chiquitanos lost their land during colonisation and well into the 20th century were bought and sold along with the rubber estates on which they worked. But during the past 40 years, the Chiquitanos have been through an extraordinary process of self-organisation. Working with other indigenous peoples they have asserted their collective right to territory through marches, protests, organisation and a burgeoning sense of their indigenous identity (they had previously largely thought of themselves as peasant farmers, rather than Chiquitanos). Protests and pressure paved the way for new laws that allowed indigenous peoples to participate in local government.
In 2000, a national protest at the privatisation of water services led to demands for a deep “refounding of the republic”. Bolivia’s president was thrown out of office in 2003 and people who were not part of traditional political parties were allowed to stand in local elections. In 2005, this led to big gains for indigenous women and men. “We got a mayor elected,” said a Chiquitano leader. “Now the (regional leader) must listen to our demands.”
In December 2005, Bolivia elected its first indigenous President, Evo Morales, and people who had never before thought they could take high-level public posts became ministers. Soon after, the Chiquitanos finally got their lands back. But history shows that this kind of active citizenship, while it may win short-term gains, will not guarantee long-term development without the creation of an effective state. The southern African nation of Botswana has a small population, is largely desert, land-locked and highly dependent on diamonds — the “curse of wealth” that has destabilised numerous other countries in Africa. At independence in 1966, it had two secondary schools and 12km of paved road, and relied on colonial power Britain for one-half of government revenues. According to the experts, Botswana ought to be a basket case.
Apparently, no one told Botswana, which has become Africa’s most enduring success story. Its per capita economic output has risen one-hundred fold since independence, making it the world’s fastest growing economy over three decades. It negotiated tough deals for its diamonds with de Beers and used the resulting royalties well. Throughout, it has remained one of sub-Saharan Africa’s few non-racial democracies, despite being bordered (and occasionally invaded) by racist regimes in South Africa and Rhodesia (now Zimbabwe).
The secret of its success lies in politics. The country’s elite comes from a single dominant ethnic group (the Tswana) whose traditional governance systems, emphasising consultation and consensus building, emerged largely unscathed from colonialism. The government broke every rule in the Washington Consensus book, setting up state-owned companies, nationalising mineral rights and steering the economy via six-year national development plans. “We are a free market economy that does everything by planning,” jokes one local academic.
In the second half of the previous century, dozens of countries across the developing world emulated Botswana’s success and achieved similar growth rates. “Getting the politics right” was key for them all. These countries have built effective states that guarantee the rule of law, ensure a healthy and educated population, control their national territories and create a positive environment for investment, growth and trade. For many, the growth spurt began with the redistribution of land and other crucial assets.
The combination of active citizens and effective states holds the key to development. But although the power to change the world by tackling inequality and poverty lies primarily with developing world citizens and states, in our integrated, connected world, everyone has a part to play. Global citizens can provide vital support to the efforts of states and citizens in poor countries and challenge a status quo that perpetuates inequality and poverty.
The agenda for action for anyone concerned about inequality — and climate change — is first and foremost to “stop doing harm”. This means assessing the arguments presented here and looking at our own attitudes and behaviour to see how far they support, or undermine, active citizens and effective states. The fight against poverty, inequality and the threat of environmental collapse will define the 21st century, as the fight against slavery or for universal suffrage defined earlier eras. It is hard to imagine a more worthwhile cause. Fail, and future generations will not forgive us. Succeed, and they will wonder how the world could have tolerated such needless injustice and suffering for so long.
Tags: Global, Human Rights