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The Causes of Global Inequality

by RAJESH MAKWANA

As international negotiations on a new set of Millennium Development Goals (MDGs) continue, it is worth reflecting on some of the limitations and failures of the MDG framework. Significantly, the program represents the only internationally agreed framework for trying to address some of the most pressing issues facing humanity, and it should be commended and supported on that basis. Despite the many improvements that the eight existing goals have already made to peoples’ lives, however, they are also extremely unambitious and often fail to assist the most marginalised groups. Of additional concern is the selective and target-driven approach they embody which conveniently avoids addressing the root causes of poverty and inequality.

The inadequacy of the goals is often illustrated using MDG-1 as an example. From the very start of the MDG negotiation process it was clear that the goal for halving poverty was grossly insufficient given the significant resources and expertise available to governments. The goal also marked a dangerous shift away from the concept of halving the number of people living in poverty as previously agreed by the 186 governments participating at the 1996 World Food Summit. Instead, MDG-1 seeks to halve the proportion of people living in poverty by 2015, which is far less ambitious in light of a world population that is still expanding rapidly, especially in some of the poorest regions. Although reports suggest that the goal has already been met well ahead of schedule, the actual number of people living in extreme poverty in 2015 will remain unacceptably high at around a billion. Reducing hunger also remains a major challenge, with around 850 million people currently unable to access sufficient quantities of food to meet basic nutritional requirements according to the United Nations (although unofficial estimates are often far greater).

Ending Poverty as the #1 Global Priority

In a world where the annual incomes of the richest 100 people are enough to end poverty for 4 years, the existing poverty goals remain outrageously unambitious. At the current rate of poverty reduction it is likely that we will never succeed in consigning poverty to the annals of history, even 65 years since the Universal Declaration of Human Rights was first established. An analysis of data from the World Health Organisation suggests that around 40,000 people die every day (15 million per year) simply because they do not have access to the essentials of life such as food, water and healthcare.

Ending this unnecessary tragedy entirely and within a short number of years should constitute the number one priority for all nations. Numerous international agencies already have the expertise needed to prevent these avoidable deaths, and the systems and institutions that can assist them have long been in place. As demonstrated in STWR’s report Financing the Global Sharing Economy, governments could raise trillions of dollars annually to facilitate this process through a range of redistributive measures, from tax and debt justice to redirecting perverse government subsidies. Not since The Brandt Commission’s proposal for an international program of emergency relief have policymakers considered ending extreme poverty in a way that is commensurate with the vast scale of the crisis.

The post-2015 MDG negotiations provide an important opportunity for policymakers to be far more ambitious about securing basic human needs for all within an immediate time-frame, and not as a distant aspiration for the international community. As a minimum, any poverty-related post-2015 development goals should set their sights on preventing all instances of life-threatening deprivation and needless poverty-related deaths. While the intention to ‘end extreme poverty in all its forms’ was mentioned in the final statement of the recent High-Level Panel’s MDG meeting in Libera, governments will need to go far beyond their existing commitments to overseas aid and rapidly redistribute resources on a scale never before achieved if they intend to make such a program a reality.

Addressing the Causes of Inequality

Another prominent concern with the MDG framework is its highly depoliticised nature and its failure to address the structural causes of poverty. Clearly, an international emergency relief program will not address these all-important structural factors or provide any lasting solution to the poverty crisis. A more comprehensive approach will necessarily involve reforming the policies and institutions that underpin the global economy and perpetuate extreme poverty and inequality.

A new MDG that addresses inequality – an option now widely advocated by those in the development community – would be a step in the right direction, but it is unlikely to go far enough. Levels of inequality have been growing sharply over recent decades, with the incomes of the world’s top 1.75% of earners exceeding those of the bottom 77%. Taking the world as a whole, income inequality has widened to a level far greater than inequality within even the most unequal nations. There is an urgent need to redress this imbalance as it is now widely accepted that inequality is an impediment to economic growth, weakens efforts to reduce poverty, undermines social cohesion and distorts the democratic process.

As the director of the Overseas Development Institute Kevin Watkins argued in a recent presentation on inequality and the MDGs, the real causes of inequality stem from public policy choices that governments make and the policies that underpin economic globalisation at the international level. Both of these factors are far removed from the rather limited discussions around MDG targets and goals, but we can no longer afford to ignore them. For several decades, economic development has been driven by a very narrow set of ‘neoliberal’ policies that prioritise free markets at the expense of social justice and environmental sustainability. As a consequence of this ideological approach, the fundamental role that the state can play in providing opportunities for the poor has been increasingly disregarded. Furthermore, the importance of sharing a nation’s resources more equitably through progressive taxation and spending on social protection and public services has been critically undermined.

Reforming the Global Economy

Countless NGO reports already highlight how to restructure the global economy in a way that can reduce poverty and inequality, covering everything from reforming international systems of trade and finance to re-generating local economies. As progressive thinkers have long argued, the model of developmentpursued by multilateral agencies like the World Bank can no longer hinge on a ‘global trickle-down’ effect which attempts to increase the size of the economic pie without ensuring that the proceeds of growth are redistributed more equitably. Moreover, governments and people in general have to accept that a growth-based economic system – and the consumerist lifestyles it encourages – is not sustainable. Globally, we already consume 50% more resources than the planet can produce and it is therefore imperative to follow an entirely different economic model that puts human and environmental welfare before economic growth and wealth generation.

The need to address social and environmental issues simultaneously has slowly gained traction since the Earth Summit in Rio in 1992, and it seems increasingly likely that the new MDGs will be known as the ‘Sustainable Development Goals (SDGs)’ – as even scientists are now urging. But creating a truly sustainable world will require a wholesale shift in public policy within both the economically-advanced and the less industrialised nations, on a scale that is still unthinkable for most mainstream policymakers. Perhaps most importantly, a sustainable global economy will ultimately require an entirely new approach to managing the world’s finite natural resources and in a way that guarantees equitable access for people in all countries. A binding global agreement on curbing carbon emissions is an obvious and urgent pre-requisite to any such reforms on the international level.

There is still insufficient public acknowledgement that the many crises we face are ultimately caused by an unjust global economy that maintains a skewed distribution of wealth, power and resources within and between nations. Given the limited remit of the MDG framework it is highly unlikely that new sustainable development goals will tackle these structural causes, even if they do shine an urgent public spotlight on them and force governments to take structural reform more seriously. In the meanwhile, an unwillingness to tackle structural causes cannot be an excuse for inaction to alleviate the devastating human impacts of an unjust global economy. Whether as part of the MDG process or outside of it, the international community – and rich countries in particular – must act with far more urgency to prevent needless hunger and life-threatening deprivation. In a world of abundant resources and wealth, nothing less than an immediate end to extreme poverty will suffice as a first step towards a sustainable future.

Rajesh Makwana is the director of Share The World’s Resources. He can be contacted at rajesh(at)stwr.org.

Rajesh Makwana is an activist and writer at www.sharing.org (STWR), a London-based civil society organisation campaigning for a fairer sharing of wealth, power and resources within and between nations. He can be contacted at rajesh@sharing.org

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