Inequality Inconsistent with UN Charter vision Worsened by aspects of globalization Confounds...
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![Page 1: Inequality Inconsistent with UN Charter vision Worsened by aspects of globalization Confounds poverty reduction efforts Not only in developing countries.](https://reader036.fdocuments.net/reader036/viewer/2022062417/5514b3d9550346ea6e8b62d7/html5/thumbnails/1.jpg)
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Inequality
• Inconsistent with UN Charter vision• Worsened by aspects of globalization• Confounds poverty reduction efforts• Not only in developing countries• Multidimensional and compromises
development, security and human rights
• Frustrates achievement of MDGs
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We cannot advance the development agenda without addressing the challenges of inequality within and between countries – the widening
gap between skilled and unskilled workers, the chasm between the formal and informal
economies, the growing disparities in health, education and opportunities for social and
political participation.
Kofi Annan, Secretary-General, UN
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Lack of economic
power• Low income • Low assets
• Denial of human rights• Discrimination
Lack of socio-political power
Inequality hinders growth and increases poverty
Poverty
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Unequal GDP distribution
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Per capita GDP in 20 poorest and richest countries
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Income gap widened in recent years
• Since 1980s, inequality has risen in most countries in all world regions
• Income inequality trends in 73 countries for which data are available (1950s-1990s)• Risen in 48 countries• Relatively constant in 16 countries• Declined in 9 countries
• Wealthiest 10% of global population increased share of global income from 51.6% to 53.4% (1980-92)
• Related to greater wealth concentration
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Global income inequalities (Gini coefficient values)
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Shares of Global Private Consumption
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Hunger and Malnutrition
• Since 2000, the average number of food emergencies per year has been 30, compared with 15/year in 1980s
• Sustained nutrition deprivation affects 852 million people
• 1 billion overweight adults globally
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Inequality Exacerbates Poverty
Income distributionPolitical
representationProductive resources
Basic social services
Markets and information
Opportunities
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77
77
47
25
23
20
% living on < $2/day in 2001
106
134
-252
3
19
70
-9
2
-23
-3
2
15
South Asia
Sub-Saharan Africa
East Asia + Pacific
Latin America + Caribbean
Middle East + North Africa
East Europe + Central Asia
53 81-8World
Change in proportion and number of poor people between 1981 and 2001 % millions
PovertyLevels and Trends
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Unemployment• Remains major source of inequality • Between 1993 and 2003:
• Global number of unemployed rose by 31% to 186 million
• Unemployment rates decreased slightly in developed countries while increasing in most other parts of the world
• Spread of jobless growth
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The informal economy
Likely to be:
• Excluded from legal protections• Precluded from enjoying basic rights and benefits of formal economy
• Working in hazardous conditions
Those in informal economy typically “have-nots” in society- 60% women- 535 million earn less than $1/day
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Share of informal workers in
non-agricultural workforce by region:• North Africa: 48%• Latin America & Caribbean:
51%• Asia: 65%• Sub-Saharan Africa: 78% (excl. South Africa)
Informal employment dominant in many regions
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Informal economy share of Gross National Income, 2000
• Developing countries: 41%• Transition economies: 38%• OECD Countries: 18%
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Why Rapid Growth of Informal Economy?• Jobless growth
• Labour market flexibility
• Reduction in public sector jobs
• De-industrialization
• Economic crises
• Greater “outsourcing”
• Household survival strategies
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Health Inequalities• Great differences between and
within countries• Access to healthcare• Life expectancy• Under-five mortality
• Intellectual Property Rights and Patent Monopolies• High drug prices• Unequal access• Compromised capacity to react to
crises
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HIV/AIDS• Highly unequal global and regional
impacts
• Lowers growth, increases dependencies
• Worsens existing inequalities between women and men
• Depletes human resources, threatening stability, security and development
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Education, 2001Despite progress, substantial inequities exist by region
Indicator Highest LowestNet Primary Enrolment Ratio
95.7%Latin America &
Caribbean
62.8%Sub Saharan Africa
Net Secondary Enrolment Ratio
89.2%N. America & W.
Europe
21.3%Sub Saharan Africa
Girls Primary Enrolment per 100 boys
99-100CIS, Europe, E. Asia
76Southern Asia
Girls Secondary Enrolment per 100 boys
107Latin America &
Caribbean
79Southern Asia
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Financial Liberalization
• Net capital flows from ‘capital poor’ to ‘capital rich’
• Increased financial volatility
• Undermines use of inclusive targeted developmental credit
• Slower economic growth in recent decades
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Trade Liberalization
• International terms of trade moving against developing countries• Primary commodities vs.
manufactured commodities
• Tropical agriculture vs. temperate agriculture
• Generic products vs. those protected by intellectual property rights
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Tariffs biased against developing countries
• Imports between developed countries average 1%
• Tariffs on textiles from developing countries as high as 9%
• Tariffs on agricultural products from developing countries as high as 20%
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Retreat of the state• Stabilization and structural adjustment
programs• Less progressive taxation• Reduced redistributive role• Reduced role of government in many
developing countries• Public education• Health• Housing• Utilities
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High-income countries spend 2½ times more of national wealth for health, education and welfare than low income countries.
Government Spending Priorities
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Inequality and Violence• Violence often rooted in inequality
• No simple causal relationship• Vicious cycle mutually reinforcing:
• Poverty• (Horizontal) Inequalities• Authoritarian governance• Lack of opportunities• Armed conflict• Reduced growth and development
• Links between inequalities and extreme aspects of social disintegration
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Poor Countries More Likely to Suffer Civil War,
Adversely Affects GrowthPredicted probability of onset of civil war within 5 years
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Global Economic Agenda Dominated by Issues Important to Developed Countries
Investment protection
Financial Liberalization
Free Trade IntellectualProperty Rights
Capital AccountLiberalisation
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…While Issues of Importance to Developing Countries
Can’t Make it to the AgendaInternational
EconomicGovernance Dominated
By Rich
Capital Flight
Doha Round, IPRs, etc. Not
Developmental
Washington Consensus
Not Developmental, Not Equitable
International Economic Instability
Meaningful Debt Relief
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Thank you