The State, a Decisive Actor for a Development with Equality Agenda

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31 May 2010|Press Release

The document "Time for Equality. Closing Gaps, Opening Trails" was launched today in Brasilia during the Thirty-third Session of the Commission.

(Brasilia, 30 May 2010) How to attain economic growth and development while reducing poverty and inequalities at the same time? ECLAC believes that is the main challenge facing Latin America and the Caribbean, and to address it, presented today in Brasilia, Brazil a new roadmap for the region in the document Time for Equality. Closing Gaps, Opening Trails.

The report, launched during the Thirty-third session of ECLAC, places equality at the core of all efforts to achieve greater welfare for the Latin American and Caribbean people.

Equality is not understood only in terms of access to opportunities, but also as the entitlement of rights. "The mere fact that someone is born in the region should already mean that the person is entitled to certain rights: to quality education, health care during the entire lifespan, a fair pension and a decent job," stated ECLAC Executive Secretary Alicia Bárcena in presenting the document.

Despite the economic and social progress in Latin America in recent years, the region continues to exhibit the worst income distribution in the world, with significant levels of poverty and considerable productive heterogeneity, deriving in the deterioration of the labour market and the segmentation of social protection.

Added to this are other long-term problems, such as ethnic and gender discrimination, vulnerability to climate change and the demographic transition.

In this scenario, ECLAC asserts that social equality and dynamic economic growth are not mutually exclusive and invites governments to find the synergies between both and redefine development. To this end, ECLAC proposes growth for equality and equality for growth. In the long-term, equality, economic growth and environmental sustainability must go hand in hand, it says.

ECLAC believes that human capabilities must be strengthened and inequalities reverted, universalizing rights and attaining convergence between sectors and territories. This strategic view requires public policies that go beyond a mere administrative role and building ample long-term social and political agreements. In sum, this means recreating the balance between the State, the market and society.

After a detailed examination of the current situation and of a body of recent evidence on the region's development problems, the ECLAC document lays out a broad set of State policies to help spur growth, foment productivity, contribute to greater territorial articulation, generate better employment and labour institutions and provide public goods and social protection with a clear universalist and redistributive focus.

This new approach is founded on six main pillars:

1) Macroeconomic policy for inclusive development: The region can grow more and better. Not only is it necessary to achieve more dynamic economic growth, but also higher levels of social inclusion and equality, less exposure to the impact of external volatility and more productive investment and generation of high-quality jobs. The role of macroeconomic policy is essential.

2) Productive convergence with equality: Characteristic of Latin American and Caribbean economies is the notorious structural heterogeneity that largely explains the deep social inequalities in the region. This heterogeneity is caused by internal and external productivity gaps. To help close these gaps, ECLAC suggests transforming the productive structure in three policy areas: industrial, emphasizing innovation; technological, focused on creating and disseminating knowledge; and support for small and medium-sized companies.

3) Territorial convergence: Territory does matter. Social and productivity gaps have their territorial correlate, and thus the importance of policies to address the spatial heterogeneity within countries. Intergovernmental transfers are decisive for correcting territorial disparities, as are territorial cohesion funds.

4) More and better employment: Employment is the master key to reducing inequality. In order to close gaps in income, access to social security and labour stability - as well as eliminating discrimination against women, ethnic minorities and youths -, ECLAC proposes a roadmap focused, among other things, on creating a labour covenant that may generate economic growth and protect workers.

5) Closing social gaps: The State has a decisive role to play in reverting inequality, and this implies a sustained increase in social expenditures and advancing in social institutions and towards monetary transfers to improve income distribution to the neediest.

6) Fiscal covenants as key to recreating the link between State and equality: The State should be provided with greater capacity to redistribute resources and foment equality. A welfare State, not a subsidiary State, can move towards a tax structure and transference system guided by the principle of social solidarity. With a new equation State-market-society, countries in the region can achieve development with high-quality employment, social cohesion and environmental sustainability.