Equality must be considered one of the drivers of regional development and a strategy for closing structural gaps in terms of income, capacities, productivity and access to public goods, Alicia Bárcena, Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), said on Friday, December 7 during the 13th International Conference on Development of the French Development Agency (AFD), held in Paris.
Bárcena was one of the speakers on the event’s first panel along with James K. Galbraith, a U.S. economist and scholar at the University of Texas-Austin; Nizar Baraka, President of the Economic, Social and Environmental Council of the Kingdom of Morocco; and Lucas Chancel, Co-director of the World Inequality Lab at the Paris School of Economics.
Eradicating the culture of privilege that characterizes Latin America and the Caribbean necessitates addressing inequalities in income and in the distribution of wealth, as well as tax evasion, which represents $340 billion dollars a year in the region (6.7% of its GDP), the most senior representative of the United Nations regional organization said at the gathering dedicated to analyzing “inequalities and social cohesion.”
These issues are addressed in depth in the document The Inefficiency of Inequality, ECLAC’s most recent institutional reflection, presented during its thirty-seventh session held in Havana, Cuba in May of this year. The publication indicates that inequality is inefficient and acts as an obstacle to growth, development and sustainability in Latin America and the Caribbean.
The first decade of the 21st century was marked by progress on social development in the region, Bárcena explained. Poverty was reduced, pro-solidarity reforms to social protection systems were carried out, consumption grew, and an improvement was seen in income distribution.
However, in this second decade, greater resistance to the promotion of the equality of rights and to the deepening of social reforms has emerged, she warned, with cuts to social spending and limits on labor rights, among other measures.
Gini index figures, which measure the concentration of income, are revealing in this sense. The region’s average inequality fell by 1.5% per year between 2002 and 2008, 0.7% per year between 2008 and 2014, and just 0.4% per year between 2014 and 2016.
Between 2002 and 2008, 14 countries saw a decline of 1% of more per year in the Gini index, while between 2014 and 2016, only five countries saw declines of such magnitude.
However, inequality is not only manifested in income distribution, ECLAC insists, but also in a multiplicity of areas such as decent work, education, health, access to quality basic services and to social protection, in the use of new technologies, in political participation and in the right to live in a clean environment, to name a few.
The structural inequalities that persist in the region, Bárcena stressed, keep countries from overcoming the so-called “middle income trap” (a term referring to the difficulties that developing economies face in finding new sources of growth after having reached middle-income levels). It is necessary to increase productivity levels through innovation, technological change and the production of knowledge-intensive goods and services, she sustained.
The conference in Paris was inaugurated by Rémy Rioux, Chief Executive of the AFD, and Stefano Manservisi, the European Commission’s Director General for International Cooperation and Development, and it drew the participation of prominent figures such as François Bourguignon, Emeritus Professor and former Director of the Paris School of Economics, and Shanta Devarajan, Senior Director for Development Economics at the World Bank Group, among others.