PRESS BRIEFING ON WORLD SOCIAL SITUATION REPORT
Press Briefing
PRESS BRIEFING ON WORLD SOCIAL SITUATION REPORT
19970220
FOR INFORMATION OF UNITED NATIONS SECRETARIAT ONLY
Economic globalization was positively affecting economic growth while exacerbating differences in income levels both between and within countries, according to the 1997 Report on the World Social Situation. Introducing the report at a Headquarters press briefing this morning, Albrecht Horn, Officer- in-Charge, Micro-economic and Social Analysis Division, Department for Economic and Social Information and Policy Analysis, said that it was divided into two sections. Part one provided an overview of social issues, with an emphasis on living conditions. Part two focused on the core themes of the Programme of Action of the 1995 Summit for Social Development: eradication of poverty; expansion of productive employment; and international instruments.
The report had attempted to link economic and social indicators at the international level, he continued. It had revealed that economic growth trends varied a great deal between different regions, a fact that raised problems of sustainability. Further, it indicated that economic growth was an indispensable instrument for the reduction of poverty and creation of employment. Indicators of gross domestic product (GDP), and even of per capita GDP, were important, but so were figures on the distribution of income, both within and between countries. Income inequality was growing in both areas, he said.
According to the report, Mr. Horn said, the process of globalization had a substantial social impact. While that phenomenon had created broad-based economic growth, it threatened to marginalize several countries and create problems for social development. Fiscal consolidation and anti-inflation measures often had negative impacts on social development programmes. In developing countries, pressure was being brought to bear on minimal social programmes. In western Europe, where the fiscal demands of monetary union under the Maastricht Treaty were stringent, there was great pressure to reform the "welfare State" that had existed since the Second World War.
He said the report had determined that there were 1.3 billion people worldwide living under the international poverty line -- the overwhelming majority in South Asia, sub-Saharan Africa and, to a lesser degree, in East Asia. In transition economies, relative -- not absolute -- poverty was increasing.
Regarding poverty alleviation and policy development, Mr. Horn said that sound, equitable economic growth was essential. Without sound macroeconomic policies, equitable growth could not be addressed. Because of that, governments faced spending restrictions that had required cuts in health and
education services. A reasonable amount of public money, targeted to vulnerable poor groups, was essential for poverty alleviation.
Also essential to poverty alleviation was access to land, credit and employment, he continued. Micro-economic policy and microcredit arrangements were important components. Public work programmes were another tool in the struggle against poverty. Many countries had responded to poverty with programmes for the maintenance of pubic infrastructure, which raised economic productivity and created employment.
Social safety nets were also very important, especially in developing countries, he added. In many countries, no safety margin whatever was provided for the very poor. To alleviate poverty, countries should establish a minimum set of support services. While those components were traditional elements of poverty alleviation, there was no universal formula, he said. The appropriateness of plans varied on a country-by-country basis.
The paradox, he said, was that while economic growth was essential for tackling unemployment, the resulting social inequalities could be a factor in inhibiting growth. The importance of flexible labour markets, small business, the informal sector -- principally in developing countries -- and strengthening the demand side should not be underestimated. Further, while inflation should be guarded against, there was a trade-off between inflation and growth. The report had concluded that the trend at present was to overemphasize protection against inflation, which had resulted in unemployment.
Regarding trade and technology, Mr. Horn said that some had argued that competition from low-wage countries had created unemployment in the developed world. The United States presidential election campaign of Patrick J. Buchanan had been an example of that type of thinking. International trade actually benefited all parties, though the cost of adjustment could be high. That was being seen today in the developed economies of Europe, as low-skilled labour there was at a cost disadvantage compared with workers in low-cost labour markets.
The 1995 Social Summit had identified discrimination and intolerance as critical social problems and had recommended better social integration policies, he continued. An essential first step would be the development of policies that mitigated against traditional political, economic and social discrimination against ethnic and national minorities, and against women. The report stated that if minority population problems were not addressed, social tension or even armed conflict could result. The report also recommended that human rights instruments, legal instruments and social policies be developed that could help create an identity for minorities without threatening the State.
Horn Briefing - 3 - 20 February 1997
A correspondent asked if, given the need for international coordination, the United Nations should be allowed to supervise global policy responses. Mr. Horn responded that countries often initiated policies aimed at rectifying earlier policies. Affirmative action was an example of such a policy. He emphasized that such reactive policies should really only be temporary. The underlying causes of discrimination needed to be discussed, not just their remediation.
As for global decision-making, he said that international factors always affected national decision-making. Multilateral financial institutions and governments needed to coordinate their work. But, more global decision-making was not required. The United Nations was an assembly of sovereign States. Those governments, however, could better coordinate their policies.
How could the problem of "structural unemployment" in Europe be addressed? a correspondent asked. Mr. Horn said that in western Europe high levels of unemployment were being caused by sluggish economic growth. But, unemployment was also caused by such structural factors as high wages and social security costs, government regulation, labour market rigidity and competition from imports.
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