GROWING INEQUITIES POSE CHALLENGE TO CONGRUENCE BETWEEN ECONOMIC, SOCIAL POLICIES, COMMISSION FOR SOCIAL DEVELOPMENT TOLD AS SESSION OPENS
Commission for Social Development SOC/4590*
Fortieth Session 11 February 2002
1st Meeting (AM)
GROWING INEQUITIES POSE CHALLENGE TO CONGRUENCE BETWEEN ECONOMIC, SOCIAL POLICIES,
COMMISSION FOR SOCIAL DEVELOPMENT TOLD AS SESSION OPENS
While current trends heralded the triumph of the free market and the process of globalization, growing inequities in the world posed a central challenge to the maintaining of congruence between economic and social policies, the Commission for Social Development was told as it opened its fortieth session this morning.
Unfortunately, many economic policies still did not take into account social objectives or perspectives, Faith Innerarity (Jamaica), the Commission Chairperson, continued. The establishment of poverty reduction as the main goal of the social agenda internationally represented a major shift from the neo-liberal paradigm of the 1980s. Although poverty eradication had become the overriding development priority, it was still important to examine the extent to which social policy objectives had moved to the core of development thinking and practice.
During its current session, which will last through 21 February, the Commission will consider the priority theme, "Integration of social and economic policy," focusing on its three main topics of discussion: social aspects of macroeconomic policies; social assessment as a policy tool; and expenditures in the social sector as a productive factor. The Commission is also scheduled to take up the outcome of the second session of the Preparatory Committee for the Second World Assembly on Ageing and the report of the Special Rapporteur on Disability. (For background information, see Press Release SOC/4589 of
6 February.)
A functional commission of the Economic and Social Council (ECOSOC), the Commission for Social Development consists of 46 members elected by that body. The mandate and the membership of the Commission were expanded following the World Summit for Social Development, held in Copenhagen in 1995. Ever since, the Commission has been the key United Nations body in charge of the follow-up and implementation of the Copenhagen Declaration and Programme of Action. It meets once a year in New York, usually in February.
The keynote speaker this morning, Executive Secretary of the Economic Commission for Latin America and the Caribbean, Jose Antonio Ocampo, said that globalization had created “a set of winners and losers”: along with many successful countries, there were many that had failed. International commitments
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* Press Release DEV/2372 should have been SOC/4589.
Commission for Social Development - 1a - Press Release SOC/4590
1st Meeting (AM) 11 February 2002
to reduce poverty, eliminate extreme poverty and enhance equity and social integration required persistent actions to reconcile economic growth, employment
generation and an active social policy within a consistent macroeconomic framework.
He stressed the importance of consistency and stability as conditions for tackling structural goals, including improvements in the distribution of income and opportunities. Macroeconomic instability was harmful for both growth and equity, and a sound macroeconomic environment was a necessary condition for successful social policy. “Inclusive growth” should allow the poor to face the effects of globalization. Also needed were development strategies that were equity-oriented. Among the major issues before the international community were broad-based access to resources (capital, land, knowledge), basic protection, empowerment and community participation.
Johan Scholvinck, Director, Divisions for Social Policy and Development, introduced the reports of the Secretary-General and said that social policy involved equity considerations, while economic policy was mostly concerned with efficiency. Marrying equity to efficiency was not a simple matter. He also stressed that macroeconomic policies were essentially only a means to an end, not an end unto themselves. It was the job of the Commission to ensure that no one lost sight of the true ends.
In an organizational part of the opening meeting, the Commission adopted its agenda and work programme and discussed how to improve its working methods. It also decided to re-elect its Bureau of its thirty-ninth session, consisting of Faith Innerarity (Jamaica) as Chairman and Henrik Hahn (Denmark), Nicole J. Elisha (Benin), Muhammed Enayet Mowla (Bangladesh) and Anzhela Korneliouk (Belarus) as Vice-Chairmen. It was also decided that Ms. Korneliouk would continue to act as Rapporteur.
The Commission’s Secretary, Vivian Pliner-Josephs, addressed the Commission on procedural matters. Also speaking on the organization of work were the representatives of India, Spain (on behalf of the European Union), Algeria, Bangladesh, Cuba and Morocco.
The Commission will proceed with its high-level governmental and expert panel discussion at 3 p.m. today.
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Election of Officers
Following the open-ended informal consultations, the Commission re-elected its Bureau, which consisted of Faith Innerarity (Jamaica) as Chairperson and Henrik Hahn (Denmark), Nicole J. Elisha (Benin), Muhammed Enayet Mowla (Bangladesh) and Anzhela Korneliouk (Belarus) as Vice-Chairpersons. It was also decided that Ms. Korneliouk would continue to act as Rapporteur.
Opening Statement
FAITH INNERARITY (Jamaica), Chairperson of the Commission for Social Development, said the theme of this session “ Integrating Social and Economic Policies” was at the heart of the work of the Commission. Discussion of the interplay between economic and social factors had had a long and controversial history in development studies, she said. The attainment of stable economic growth with equity was of paramount importance in this discourse.
While current trends heralded the triumph of the free market and the process of globalization, the world was marked by growing inequities posing a central challenge for the maintaining of congruence between economic and social policies. She added that disciplinary, academic and government institutional boundaries continued to limit the effective integration of objectives in the two domains. Many economic policies still did not take into account social objectives or perspectives.
The integration of social and economic policies must be understood from the standpoint that various objectives were affected by policy-making, and they must all be included in the policy process. Issues of equity, gender equality, class, ethnicity and other related elements must be integral components of the planning and monitoring of policy outcomes. She stressed that the establishment of poverty reduction as the main goal of the international social agenda represented a major shift from the neo-liberal paradigm of the 1980s. There was now much greater acknowledgment of the social context and impact of economic policy. Although poverty eradication had become the overriding development priority, it was still important to examine the extent to which social policy objectives had moved to the core of development thinking and practice. Unfortunately, in spite of its extreme importance, the focus on poverty did not capture all aspects of the social agenda.
All economic policies had a social content, she said. They tended to benefit some people more than others. She warned that economic policies that used only market-based criteria would overlook non-market inputs and outcomes and concentrate benefits in the hands of those with greatest marketed assets. She also expressed concern as to the decline of public expenditure in developing countries, the limited share of developing countries in total world trade and the debt burden of both the least-developed and some middle-income developing countries.
Organizational Matters
The representatives of India, Algeria and Cuba asked for clarifications and introduced amendments to the proposed programme of work. Also speaking was the representative of Morocco, who congratulated the re-elected Bureau.
The representative of Spain, speaking on behalf of the European Union, said it was important to improve the working methods of the Commission to increase its efficiency. Functional bodies played a significant role in the follow-up work of major conferences and summits. He added that more attention needed to be paid to the role of the Commission as a consultative body to the General Assembly and the Economic and Social Council. Cooperation between the Commission and other functional commissions and with the specialized agencies was also necessary to attain greater coherence within the United Nations system. He suggested the strengthening of the Economic and Social Council's assistance to its functional bodies and a new, more dynamic way to conduct meetings with a view to improve efficiency.
The representative of Bangladesh proposed his country’s permanent Representative, Iftekhar Ahmet Chowdury, as the chair of the forty-first session
-- the elections are to take place at the end of the current session.
The Commission approved its agenda and programme of work for the current session.
Introduction of Documents
JOHAN SCHOLVINCK, Director, Division for Social Policy and Development, introduced the reports of the Secretary-General and updated the Commission on last week’s events. The Secretary-General had spoken at the World Economic Forum. He said that even though some had viewed the Secretary-General’s presence as betrayal to the cause of the downtrodden masses, the opposite was true. The Forum was an opportunity to address the global elite on behalf of those downtrodden masses -- on behalf of well over a billion people in the world who were living without food to eat; without safe water to drink; and without primary schooling or health care for their children -- in short, without the most basic requirements of human dignity.
As the World Economic Forum was held in New York, people had gathered in Porto Alegre for the World Social Forum. He said the contrast between the two could not have been greater. It reinforced the image that the economic sector was associated with the rich and powerful and the social with the poor and powerless. This dichotomy, this divide, was in dire need of being closed and the Secretary-General’s speech at the World Economic Forum had been an important step in that direction. There was no other intergovernmental body in the United Nations better placed than the Commission for Social Development to take the lead in showing the absolute imperative of integrating social and economic policies.
In a nutshell, it could be said that social policy involved equity considerations while economic policy was mostly concerned with efficiency. Marrying equity to efficiency was not a simple matter, he said. However, an important task was to temper this focus on efficiency and to redress the balance towards the inclusion of equity. He stressed that macroeconomic policies were essentially only a means to an end, not an end unto themselves. It was the job of the Commission to ensure that no one lost sight of the true ends. The Commission could not remain a self-referencing body whose reports got only a cursory review at the Economic and Social Council. The subject matter was far too important, far too fundamental to be relegated to the margins.
Keynote Address
JOSE ANTONIO OCAMPO, Executive Secretary of the Economic Commissions for Latin America and the Caribbean (ECLAC), said there was clearly a need to bridge the gulf between macroeconomic policy and the social dimension. The international community had come a long way from the times of structural reform process, in which the issue of social impact had not been presented as a major theme to be taken into account. It had been assumed that structural reforms would resolve many social issues in themselves.
Addressing the developments of the past two decades, he said that with the notable exception of some Asian countries, growth rates had been disappointing in the developing world. Within the context of globalization, the degree of income inequality varied greatly from region to region and had increased among and within many countries. Inequality was the greatest in Latin America and sub-Saharan Africa, but the increase was most striking in some transition economies. The gaps between the industrialized world and the developing countries were increasing.
He said globalization created “a set of winners and losers”: along with many successful countries, there were many that failed. Many groups of workers and peasants who produced traditional goods within certain economies were displaced by foreign competition. Growth had also become more volatile during the 1990s. Macroeconomic policy efforts and structural reforms had failed to anticipate and prevent such events as the Mexican crisis in 1994-1995 and the Asian crisis.
Commitments to reduce poverty, eliminate extreme poverty and enhance equity and social integration required persistent actions to reconcile economic growth, employment generation and an active social policy within a consistent macroeconomic framework, he continued. Consistency and stability were necessary conditions for tackling structural goals, including improvements in the distribution of income and opportunities. There was a consensus that macroeconomic instability was harmful for both growth and equity, and that a sound macroeconomic environment was a necessary condition for successful social policy. High inflation was very costly for the poor, as were recessions and exchange rate fluctuations. Macroeconomic stability was connected to the stability of growth and financial systems.
Low inflation and balanced fiscal accounts were components of stability and consistency, but they were not synonymous, he said. That was an important consideration, since most of the macroeconomic effort had concentrated on those two aspects. Mexico and the Southeast Asian economies, however, on the eve of their respective crises, had exhibited fiscal balances or surpluses and low inflation rates, along with exchange rates misalignments and unsustainable current account deficits. Regulation of financial flows and prudent management of fiscal systems were important for addressing many problems.
Another aspect of the problem was represented by the fact that the developing world had been experiencing pressure to adopt policies that tended to increase domestic effects of both booms and crises, he said. In that respect, he emphasized the importance of countries’ own fiscal efforts. National financial institutions should reduce the impact of the boom-bust cycles of recent decades. Also, the fact that revenues in most developing countries were insufficient emphasized the need for improved tax systems and efficient social investments.
Sustained stable growth was important, but it was not enough, he continued. There were many links between growth and social conditions. Human capital was recognized as one of the sources of stable growth. Thus, social investment was a production factor. There was a need for sustained investment in social policies. In addressing social disparities, growth had to be managed in order to maximize the social effects that it could generate. “Inclusive growth” should allow the poor to face the effects of globalization. Also needed were development strategies that were equity-oriented. Among the major issues before the international community were broad-based access to resources (capital, land, knowledge), basic protection, empowerment and community participation. Social policies should receive priority as means of addressing poverty and inequality. Education, nutrition, employment, wealth distribution and sound demographic policies were among the important factors of social development.
Regarding social protection, he said that in order to allow workers to adapt to the current economic situation, all countries should aim at developing universal and integrated social protection systems. Adjustment programmes should certainly include social safety nets, as had been stressed in recent IMF adjustment programmes. The development of affordable and appropriate social safety net institutions was essential to reassure populations that the negative consequences of economic reforms and downswings in activity would not fall disproportionately on them. Such nets needed to be designed on a permanent institutional basis, so as to be able to respond quickly in a case of crisis. To improve the macroeconomic policies, it was also important to analyze how they affected the poor, taking into account both their positive and negative aspects.
Turning to institutional demands of macroeconomic policies, he added that various social actors should take part in the formulation of economic policies. Also needed were the systems to allow for the definition of explicit social targets of public sector policies, as well as coordination between economic and social authorities. Exchange of information and sharing of experiences were important. Social cohesion and solidarity were fundamental conditions of development and social progress, and it was important to sustain efforts to develop and reinforce institutions and mechanisms encouraging social integration. Better links between economic and social policies were needed.
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