Poverty, Inequality and Inclusiveness: Which Comes First?

These overlapping concepts together frame what many define as one of the principal challenges of modern society in both developing and developed countries. They have recently come to focus for two distinct reasons. The global financial crisis has exposed new vulnerabilities in supposedly developed societies such as Greece and Spain, even the USA. These vulnerabilities are proving far from temporary—perhaps pointing to disturbing secular trends in inequality of incomes and opportunities.

At the same time, developing countries are pressing for greater equity in the allocation of global resources and a next, perhaps final, push to eliminate extreme poverty. This push, built around the slogan ‘leaving no one behind’, is the core objective of the emerging UN Post-2015 Agenda. The UN package is being discussed in the so-called Open Working Group, a very dull title for a committee of leading UN members (including Canada), but one with a key mandate. They have been given until September 2014 to propose a new framework of universally applicable Sustainable Development Goals (SDGs). This framework will form the basis for a negotiated Post-2015 Development Agenda.

Extreme poverty, defined by a World Bank income threshold of US$1.25 per day, still affects some 1.2 billion people globally. They are located in the developing world, representing about half the population of low income (LICs) and fragile states. The largest number of poor (395m) live in India, despite it being a BRICS country. If we shift the threshold to just $2 per day the world’s poor doubles to 2.4 billion.

The S for ‘sustainable’ should mean that the international community will be both bolder and more thoughtful this time around.

We need to remind ourselves as Canadians that we have our own poor (especially when we think in terms of relative poverty), located mainly among our indigenous peoples. Reductions in poverty in developing countries over the last decade have not been matched in Canada.

Inequality is about relativities, not absolutes, in poverty. It exists between different categories of countries, comparing the most fragile (such as Haiti) to the mega-rich (such as Saudi Arabia). More sensitive in political terms are inequalities within countries, which are present among both low-income developing countries and emerging economies. Increased political and social tensions in the US and other developed countries show that inequality is not exclusively a developing-country issue.

If poverty and inequality are complementary measures of absolute and relative deprivation, where does ‘inclusiveness’ fit? It is a key factor in their causal chain.  While we cannot all be equal, we now recognize that poverty is not a natural or desirable quality in any society. Some still argue that rising inequality is a necessary concomitant of growth; but inequality is rather a measure of inefficiency, of a population segment inadequately engaged in society.

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That societal dysfunction has its roots in failed inclusion. It arises because many people—maybe over a billion globally—are denied opportunity. They are excluded from meaningful access to key public services, including education to acquire the job skills needed to be productive citizens. Poverty is thought of as an issue of income, but it is in reality multi-faceted. Extreme poverty flourishes in a society in which people are disempowered economically and politically simply because they are women or belong to ethnic/religious minorities.

In developing countries, many still only on the brink of democratisation, public goods are in often largely a preserve of those already privileged by birthright or by acquired wealth. In the shadow of many modern apartment towers in Mumbai sleep homeless families whose uneducated children beg on the same streets by day.

This is failed inclusiveness.

Comparable failings exist in Canada. Despite millions allocated in federal and provincial budgets, aboriginal communities often live in condemned temporary housing, jobless, poorly nourished and often victims of abuse.

Overcoming exclusion is the first step towards sustainability at the community level. Top-down paternalism, whether by a Western donor or an Asian bureaucrat, is not the route to eliminating poverty. Overcoming inequality is not just a worthy social goal but also the route to a stronger economy. Programs providing income support linked to improving social conditions (e.g. sending girls to school) can provide a head-start towards breaking the poverty trap.  The key transformative kicker for sustainable change is a world in which all citizens have effective access to basic government services, notably health and education. An institutional framework that fosters social and political inclusion is essential.

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The MDGs were the agreed vehicle for global action on Poverty Reduction for the first 15 years of this millennium. As we approach their end, we are still seeing very uneven levels of success, both between and within countries. Of course, part of the problem has been the lack of resources relative to the challenge; but maybe more important has been flawed implementation using approaches that fail to engage or meet the needs of the most needy.

The evolving framework of their proposed successors, the SDGs, is more complex and transformational in its objectives. The S for ‘sustainable’ should mean that the international community will be both bolder and more thoughtful this time around.

But already there is hesitation on some key goals. The word ‘equity’ is becoming lost from sight because it could seem to threaten traditional power relations. Donors claim a financial pinch even as they, including Canada, plead for new trade opportunities with emerging economies. The term ‘universal’ is making some donor countries uneasy about coming under international scrutiny on their own failure to effectively tackle poverty.

A better understanding of the role of inclusion for success in eliminating extreme poverty will hopefully make this goal more achievable under the emerging Post-2015 Agenda. Canada should be an important actor helping make that happen, by showing understanding and empathy to countries facing this daunting challenge. We should be duly modest, given our own unmet poverty elimination goals.

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