The Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), Alicia Bárcena, presented today to the organization’s member countries the document The Inefficiency of Inequality , which reaffirms ECLAC’s proposal for the region’s development, at the Commission’s thirty-seventh session being held through Friday, May 11, in Havana, Cuba.
The document was commented upon by Cuba’s Minister of Foreign Trade and Foreign Investment, Rodrigo Malmierca, and the Director of the Development Center of the Organization for Economic Cooperation and Development (OECD), Mario Pezzini. They highlighted ECLAC’s proposal emphasizing that pro-equality policies not only produce positive effects in terms of social well-being but also help create an economic system that is propitious for learning, innovation, higher productivity and environmental protection.
During the presentation of the document, the most senior representative of the United Nations regional organization explained the report’s main themes to authorities from the Commission’s member countries and associate members, which can be summed up by saying that inequality is inefficient, and is an obstacle to growth, development and sustainability.
“New viewpoints on economic theory converge now on the point that equality is not just the result of the economic system but also a variable that explains its efficiency in the long term,” ECLAC’s Executive Secretary said.
“We believe that equality, productivity and democracy are complementary strategic goods, which cannot be substituted for each other, even more so in a world experiencing sharp economic, political and environmental tensions,” she added.
Alicia Bárcena explained that equality creates inclusive institutions and a culture that rewards innovation and effort, not the social class, ethnicity, gender or political connections of economic actors. In addition, it strengthens the positive democracies that require technical change, economic and political stability and care for the environment, and it enables access to capacities and opportunities on equal footing, in a context of technological revolution.
In the global economic framework, equality helps expand aggregate demand and reduce the intensity of domestic and external conflicts by promoting development, the senior United Nations official added.
She noted that Latin America and the Caribbean is the world’s most unequal region, with an average Gini coefficient of 0.5 compared with 0.45 for Sub-Saharan Africa, 0.4 for East Asia and the Pacific, and 0.3 for the countries of the OECD.
She added that tax evasion in the region amounts to 6.7% of its Gross Domestic Product (GDP) in terms of income tax and the value-added tax alone, while in the social arena gaps in access to education, the high rate of teenage motherhood, and ethnic-racial discrimination continue to perpetuate inequalities.
There are also notable territorial inequalities between the different socioeconomic levels in aspects such as life expectancy, infant mortality, the illiteracy rate and access to drinking water in the home, to mention just a few. This is compounded by an economic model based on the extraction of natural resources, reduced and low-quality investment in infrastructure, gaps in the obtainment of sanitation, electricity and Internet, as well as the high costs resulting from the destructive effects of extreme climatological events that stem from climate change.
For these reasons, Bárcena emphasized, the task that lies ahead for the region is to move toward sustainable development in its three dimensions: social, economic and environmental. To achieve this, it is necessary to revitalize investment and fully insert the region in the fourth industrial revolution, with a central focus on decarbonization and decoupling growth and environmental impact.
ECLAC’s Executive Secretary underscored that the sum of national actions is not enough; multilateral institutions are needed for greater global cooperation, as well as the provision of global public goods and means of implementation that close gaps in financing, technology and trade.
“Our region has an enormous chance to modernize and propose new agreements that close financial, technological and trade asymmetries at a global level,” she concluded.
In his remarks about the document, Minister Rodrigo Malmierca stressed that the report “gives continuity to what ECLAC has been doing over the last ten years, which is putting equality at the center of the analysis.”
“We can assure ECLAC that we will support the vision of placing equality at the center of development. It is a basic, fundamental issue and we will be able to work in a more efficient way, sharing strategies and working together,” he affirmed.
Mario Pezzini, meanwhile, indicated that “reforming the public policy toolbox that we have is a much more crucial and important challenge than making simple, marginal progress in each field of public policy.”
“We must build a regional policy paradigm that is completely different where the goal should be helping to harness the opportunities for development that exist in the region. The tool is not a sectoral policy but rather a policy of public investment that involves different actors in different forums and mechanisms of the public and private sectors,” he added.
ECLAC’s publication was the center of the debates at the high-level seminar “The Inefficiency of Inequality,” which took place during the day’s events and where participants included ministers and authorities in the areas of Trade, Economy, Planning, Social Development, the Environment, Foreign Affairs and Information Technologies from ECLAC’s member countries.
The full programme for ECLAC’s thirty-seventh session, as well as general information about the meeting, is available on the website https://periododesesiones.cepal.org/37/en.
You can follow all the details of the session on social media with the hashtags #igualdadALC and #equalityLAC.