Tony Addison reviews, for the Africa region, the years leading up to the MDGs – including the legacies of structural adjustment and conflict. Africa has yet to achieve the level and speed of structural transformation that is required to meet the SDGs. The last decade’s super-cycle in commodities seems to be over, dangerously exposing the weakness of the ‘African lions’ and their undiversified growth model. Moreover, African policymakers have yet to absorb the implications for investment in their extractive industries of what real progress on international climate change agreements will mean for the demand for Africa’s exports of fossil fuels. The development states that Africa needs to create must have a deep knowledge of what the private sector is capable of achieving. Then high-value synergies of private and state action can be identified and acted upon – while ensuring that business operates within a framework of supporting regulation that protects the public interest.
Edited by Peter A.G. van Bergeijk and Rolph van der Hoeven
Malte Luebker recalls that employment and labour issues were entirely absent from the initial set of MDGs, and that only in 2005, somewhat hastily, a new target was added to address this oversight. He therefore welcomes that the 2030 Agenda for Sustainable Development makes ample reference to employment and inequality. Goal 8 is devoted to ‘Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all’ and expands on two familiar themes, productivity and employment, while adding labour rights as a new element. The more nuanced treatment of labour arguably presents a notable advance in attaining a wider set of progressive policies concerned with addressing rising inequalities. While the SDGs are strong on some policies that have direct impact on the primary and secondary distribution of incomes, they lack an explicit endorsement of freedom of association and the right to collective bargaining. Hence, they fail to mention the mechanisms that give workers a voice and a meaningful stake in development.
Giovanni Andrea Cornia
Giovanni Andrea Cornia challenges the idea that a recession by definition increases inequality. In the first decade of the twenty-first century various Latin American countries saw declines in income inequality. These declines in inequality were the result of changes in the political regimes towards the left or the centre, from deliberate policies changes as well as from changes in international conditions. Policies that helped to reduce inequality included a rise in secondary education of low-middle class children, labour market policies that included a rise in the minimum wages greater than in average wages, improved collective bargaining, especially in Southern Cone countries and a formalization of informal jobs, changes in tax policies, that included a rising tax/GDP ratio, more progressive taxation, more attention in public expenditure towards the poor, including social transfers in the form of social pensions and Conditional Cash transfers.
Peter Edward and Andy Sumner
Peter Edward and Andy Sumner discuss the growth in global consumption since the end of the Cold War. They argue that the dominant and optimistic narrative on globalization is considerably more methodologically fragile than it at first seems. The fall in inequality is almost exclusively attributable to the effect that the rise of China has had on between-country inequality. Changes in global inequality across the rest of the world are much more modest. Edward and Sumner suggest therefore that the dominant or optimistic narrative, of falling poverty and an emerging ‘middle class’ largely free from the threat of poverty, disguises both considerable growth in the size of the ‘global precariat’ living in conditions that most in the developed world would consider to be well below ‘middle class’ and an erosion of the financial security of a significant proportion of those living at higher consumption levels.
Jan Vandemoortele provides a critical reflection on the SDGs. Although they address a broader set of concerns than the MDGs did and emphasise more clearly the link between global goals and national targets, the SDGs do not quite represent a ‘one-world’ agenda that applies to all countries in a similar manner. Most of the verifiable targets are not dissimilar from those covered by the MDGs, thus do not apply to developed countries. Most of the issues that concern them are either omitted or formulated in a woolly fashion – i.e. inequality, overweight, breastfeeding, climate change. This relates to the context in which they were shaped, characterised by a deep divide between North–South, a stronger sense of national sovereignty among member states, aloof leadership throughout the United Nations, diminished influence of civil society organisations and greater leverage of global corporations. Two steps are now overdue: (a) each country must adapt the SDGs to her national context and (b) globally, fitting indicators must be adopted to remedy the flawed nature of many SDG-targets.
The financial commitments to 2030 Agenda for Sustainable Development do not seem to live up to the ambitions of the SDGs. Rob Vos proposes reviving the old idea of using international liquidity, the IMF’s special drawing right, to leverage new development financing. This would strengthen the international financial safety net to deal with balance-of-payments crises and reduce the need for developing countries to take out ‘self-insurance’ against external shocks by accumulating vast amounts of their own reserves. This will take the international community some way in providing the global public good of global financial stability, while eliminating the deflationary bias on global economic growth implied by the present international monetary system. At the same time, using idle SDRs to leverage new development finance could yield as much as US$1 trillion in new development finance for the provisioning of other global public goods (like a stable climate and/or improved public health).
Peter A.G. van Bergeijk and Rolph van der Hoeven
Peter van Bergeijk and Rolph van der Hoeven discuss the design and development of the Sustainable Development goals (SDGs) and their strengths and weaknesses. Based on the findings in this edited volume they point out persistent high and/or growing national inequality in different regions in the world. The absence of any concern for inequality in the predecessors of the SDGs, the Millennium Development Goals was a great omission as reducing income inequality is one of the most important challenges countries are facing. Although the SDGs contain a goal to reduce inequality (goal 10) the target related to this goal is wholly insufficient as it relates only to progress of the bottom 40 per cent of the population. There is no sensible indicator to attest the growing importance of the growing cleavage between income of work and income of capital and the income of super rich (the top-1 per cent) which manifest themselves in much more visible form in emerging and in developed countries. The authors argues that concern for income inequality should receive far greater attention in the implementation of the SDGs
Rolph van der Hoeven
Rolph van der Hoeven reviews (drivers of) processes of growing income inequality and what kind of challenges these pose for the post 2015 development agenda and the SDGs. He judges the compromise text of goal 10 on inequality too weak to be meaningful for proper implementation. Moreover van der Hoeven argues that active involvement of civil society is necessary. Elements of a new global Social Contract should include the right to development and the basic elements thereof in the form of non-discrimination, participation and accountability and introduce a global social floor, which is financially possible, but where currently political will is lacking. A revitalized form of global governance, where the coherence, at national and international level between social, economic and environmental sustainable policies, is strengthened, thus allowing developing countries to strive for necessary structural transformation. This could take the form of a Global Economic Coordination Council.
Deepak Nayyar observes that, during the past 25 years, there has been a significant increase in the share of developing countries in world output, manufacturing and trade. This catch up, in aggregates, has been driven by economic growth. But the process is characterized by uneven development and emerging divergences. There is an exclusion of regions, of countries within regions, of regions within countries, and of people, leading to increasing divergences within the developing world. Asia led the process, while Latin America stayed roughly where it was, and Africa experienced regress. Nayyar formulates two interlinked hypotheses. Economic growth (catch-up) is essential for reducing inequality (between and within countries), but at the same time it will be unsustainable without reducing inequality (within countries). He concludes that catch up can reduce inequality. If it does not, there will be no catch up.