Ray Collins on a fast approaching critical moment for dealing with global inequalities
In 2000, there were just two dollar billionaires in India. Today, there are 46. However, during this time, the $176 billion total net worth of the billionaire community has climbed from 1% of GDP to 12%. That is enough to eliminate absolute poverty in India twice over, with enough left to double spending on the country’s shockingly underfinanced public health system.
What is happening in India is part of a wider pattern affecting both developed and developing countries. Almost half the world’s wealth, totalling $110 trillion, is now owned by just 1% of the population. Seven out of 10 people live in countries where economic inequality has increased in the past 30 years. Developed economies with a fraction of the global population use about half the world’s resources and are responsible for 77% of all emissions.
Inequalities take many forms, but the most persistent and pervasive is gender inequality. The recent session of the UN Commission on the Status of Women concluded that gender-based discrimination, including the denial of rights to women and girls, remains the most widespread driver of inequalities.
Why is this important? High levels of inequality generate considerable costs for society—weakening demand, restricting social mobility and undermining the labour market prospects of vulnerable social groups. Inequality is a key cause of financial crises, halting economic growth and fuelling instability. It is also a primary cause of political unrest.
Widening gaps have accompanied progress towards the Millennium Development Goals (MDG), as governments – in a bid to meet targets – have focused on the lowest-hanging fruit. The common use of averages and aggregate data in MDG reporting and the lack of the data needed to disaggregate results by class, wealth, gender or race meant that emerging inequalities have remained unnoticed. Although the report from the UN High-Level Panel (HLP) makes a number of references to inequality and a commitment to leave no one behind, no explicit goal or target is suggested. Instead, it recommends that data collected to mark progress be disaggregated by specific groups.
Labour and others have been extremely concerned by the HLP statement that economic inequality is a matter solely for national policy and should therefore be excluded from the framework. The post-2015 development agenda is intended to be single, unifying and global. That means the agreed targets and goals will be equally applicable to our work in the UK as to our work internationally through DfID. It is therefore crucial that our domestic and international approaches are mutually reinforcing. For our Party, tackling inequality complements not only our opposition to corporate greed but our promotion of responsible capitalism and a belief that the UK economy, like the global one, must work for the many not the few.
The UK government should use its role in the ongoing negotiations to ensure that the post-2015 framework specifically tackles economic and other inequalities within countries through goals, targets or other mechanisms. That will require a transformation shift in aid delivery. In education, the challenge will becomes not just universal provision but a focus on quality. In trade, it is not merely the provision of jobs but of labour market policies that allow a role for trade unions, a minimum wage and measures to deal with the growing informal economy.
With conclusions on the post-2015 agenda fast approaching, we are reaching a critical juncture. Decisions made now will shape the next generation of aid and development. More than this, they will shape the opportunities and life chances of the next global generation.
Lord Ray Collins of Highbury is a Shadow DfID Minister in the House of Lords
Published 10th April 2014