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IMPLICATIONS Recession of 2008 and before the

IMPLICATIONS
OF INEQUALITY IN SUSTAINABLE DEVELOPMENT

WHY
INEQUALITY MATTERS

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Goal 10 of the SDGs
states: “Reduce Inequality Within and Among Countries,”

Every country on
this planet has its own social problems and political economy that contours the
extent and effects of inequalities. Economic forces do not solely determine
inequalities, but it is also determined by politics and policies. Extreme
inequality often leads to harmful social, economic, and political effects.

Economic
Arguments

Inequalities of any
type and specially that of incomes and assets have detrimental economic
effects. Growing inequalities, with top-heavy income distributions, diminishes
aggregate demand which slows economic growth. The attempt of monetary
authorities to offset these effects can contribute to credit bubbles, and these
bubbles in turn lead to economic instability. That is why inequality is often linked
with economic instability. It is not a surprise that inequality reached high
levels before the Great Recession of 2008 and before the Great Depression of
the 1930s.

Reducing
inequality has clear economic as well as social benefits. It strengthens
people’s sense that society is just and fair, improves social cohesion and
mobility, making it more likely that more citizens will live up to their
potential; and broadens support for growth initiatives.

Political
and Social Arguments

Gaps between the rich and the poor are
partly the result of economic forces, but equally or even more, they are often the
result of public policies, such as taxation, the level of the minimum wages,
and the amount of investment in health care and education facilities. This is
why countries with similar economic circumstances can have noticeably different
levels of inequality. These inequalities then affect policy-making because even
democratically elected officials respond more attentively to the views of
affluent constituents than they do to the views of poor people. The more that
wealth is allowed unrestricted roles in funding elections, the more likely it
is that economic inequality will get translated into political inequality.

 

THE
MANY DIMENSIONS OF INEQUALITY

There are many dimensions to
inequality—some with more invidious effects than others. One thing is however certain
that sustainable development cannot be achieved while ignoring extreme inequalities.
There are four specific angles from which to scrutinize the SDGs and their
interaction with issues related to inequality: access, gender, opportunity and
outcomes. The income angle is relatively straightforward in most respects.
Tackling poverty itself is an important part of reducing inequality.

One of the most malicious forms of
inequality is the inequality of opportunity, which reflects in a lack of
socioeconomic mobility, condemning those born into the bottom of the economic
pyramid to almost surely remain there. Just focussing on one dimension at a
time may underestimate the true magnitude of societal inequalities and provide
an inadequate basis for policy. For example, health inequality is both a cause
and consequence of income inequality. Inequalities in education are a primary
determinant of inequalities in income and opportunity.

We are currently standing at crossroads.
The challenge of unsustainable growth means that we are plunging towards
climate catastrophe, and the challenge of inequitable growth means that we are dashing
towards increased poverty, increased marginalization and increased anger.

The problem has been that we have always
believed and continue to do so that we can practice unsustainable development
and then clean it up. However, such an approach does not work. We will always end
up managing small fallouts and stay behind the problem. We have to learn that
growth that is not affordable or in other words equitable, cannot be
sustainable. We cannot push away the politics of development when we discuss
sustainability.

The
case of air pollution

We can take an example of air pollution to
illustrate these points. Today, a small fraction of people in Delhi drives a
car. In Delhi, the proportion is approximately 15 per cent, but air pollution
is at a very high level and the congestion has become unbearable. The question
is how will Delhi combat air pollution as more and more people start to drive?
What contingencies can be put in place for the remaining 85 per cent?

A simple technical solution is not
feasible. We simply cannot fix the tailpipes of individual cars. We would need
to plan for sustainability for all, and for this, we would need to re-invent
mobility at a scale not seen ever before. Without this, we cannot clean our air
for anybody, regardless of his or her economic position. It should be clear solutions
must work for the poor, for them to work for the rich.The atmosphere mirrors
the air pollution of Delhi’s roads on a grand scale. Climate change cannot be mitigated
unless issues of equity are addressed and new ways of growth that work for all
are found, without destroying our planet.

 

The
case of water pollution

Indian rivers are extremely polluted, but
the question again is that how can we clean up our rivers when large numbers of
people are not connected to sanitation and do not have access to clean water?
The state has limited resources and can only invest in providing for some – and
this is too often the rich and not the poor. However, we should know that if
only a part of the city has access to sanitation and underground sewage,
pollution control will not work. That is because the treated waste of a few
will be mixed with the untreated waste of many and the end result will be
increased pollution .Greater the pollution, the higher the costs of cleaning
the water – even the rich will not be able to afford the increasing costs of
delivery of water or of taking back waste. This example therefore illustrates
again that solutions must work for the poor, for them to work for the rich.

States,
markets and society – for whom?

In the coming years, when we think about
development it is imperative to rethink the question of states, markets and
society. In recent decades, we have dismembered the state, grown the market and
believed that we have empowered society. The current state–market–society
configuration is about the survival of the fittest, in a way that drives both
growing inequalities, and ultimately unsustainability too. So, in the coming
years, we must also ask insistently – whose society are we talking about, that
of the poor or that of the rich? In most countries, electoral democracy is not
proving sufficient to represent the poor. Therefore a central part of the
development challenge is therefore deepening and strengthening democracy, not
just for the socially connected but for all.

It has increasingly become clear that
sustainable development is not possible if it is not equitable. Growth has to
be affordable and inclusive for it to be sustainable. We will have to
understand that environmental challenge is not technocratic but political. We
cannot neuter the politics of access, justice and rights and hope to fix
environmental or development issues.

MEASURES
PROPOSED TO TACKLE POVERTY

Poverty alleviation
and sustainable development supplement each other.

Poverty is more than just the lack of income and resources to
ensure a sustainable livelihood. It also includes hunger and malnutrition,
limited access to education and other basic services, social discrimination and
exclusion as well as the lack of participation in decision-making. Economic
growth must be inclusive to provide sustainable jobs and promote equality.

THE
KEY FACTORS TO FIGHT POVERTY AND HUNGER

Sustained Economic
Growth

Across the globe, economic growth over the past years has
been quite promising. Due to strong growth in developing regions over the past
few years, a large number of people around the globe managed to get out of
extreme poverty. However, the progress attained so far is not sufficient.
Overall progress in reducing poverty remains uneven. Sustained economic growth
is a major factor in reducing poverty. However, growth alone does not translate
automatically into reduced poverty levels and less hunger. In fact, in most of
the rapidly growing economies, inequalities tend to increase as well. In order
to translate economic growth into pro-poor gains at the domestic level, growth
must be accompanied by strengthened institutional capacity, equitable delivery
of public services, active social inclusion, bridging the gap between urban and
rural development, as well as investment in human capital.

Empowerment of
women

The importance of empowering women in the context of
overcoming poverty and hunger deserves a special mention and cannot be
understated. The productive and creative potential of women who make up over
half of the globe’s population is a tremendous asset. Counties around the globe
need to identify and implement four priorities for women empowerment: women in decision-making,
balance between family and work, equal wages policy, and gender roles.

Focus on education,
employment and skill acquisition

Education and skill acquisition are equally important and
powerful tools in poverty eradication. Lack of education and employment
opportunities are among the determinants of poverty’s perpetuation from
generation to generation, and without added improvements in this field,
breaking away from the poverty trap is highly difficult.

Global partnership of developed and
developing countries

The
eradication of extreme poverty demands a constructive and truly global
partnership of developed and developing countries. Developed countries should
take steady steps in providing assistance to developing countries. There is a
need for assistance and sustained aid to extremely poor countries, which can only
be achieved through better coherence and coordination.

Adequate public expenditure in
critical areas

Adequate
expenditure should be made to enable access to basic services like quality and
affordable health care, quality education, good nutrition, infrastructure,
water resources, electricity and information and communication technologies to
all sections pf the population. While fiscal sustainability is important in the
medium term, greater flexibility on public expenditure and public investment
for key physical infrastructure, human resources and strategic sectors is
needed in the short term.

Good governance and accelerated
implementation of pro-poor policies and programs

Good
governance at all levels, including the fight against corruption, is a foundation
of eradicating poverty. National strategies may be working working, although
not on the scale required. There is a need to accelerate implementation by
scaling up effective policies and programs and fueling innovation.

Encouragement to private
sector/businesses for poverty eradication

Profitable
businesses are putting billions of dollars into developing economies and
providing economic support to millions of people. If one applies special
efforts to boost local suppliers and develop sustainable businesses in the
local supply, the effect can be magnified at no great cost. Through the
effective running of normal business, with extensions into its supply chain and
using its skills in enterprise development, a company can have a very significant
impact on the establishment and growth of sustainable livelihoods which are
essential to poverty reduction.

 

 

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