In recent decades, governments and international institutions focused on opening international and domestic markets to increased competition.
The powerful new force of information and communication technology (ICT) was released. Globalization, as it became known, was changing the policy landscape and distribution of power and gains.
While for some globalization has generated wealth and welfare, many see it as a source of persistent inequality and social exclusion. Growing insecurity and a sense that the rules of the game are unfair have given rise to frustrations in the hearts of many individuals and their families. Questions of legitimacy and sustainability have led to increasingly acrimonious exchanges, most visible in the protests that regularly accompany major meetings of international financial and trade institutions. And what are people worried about? Jobs, to begin with.
Official unemployment, which continues to rise, masks the even larger problem of underemployment and billions of people unable to work in ways that fully utilize their creativity or maximize their productive potential. The work of the poor is largely invisible. Far too much of women’s work is still uncounted and undervalued. And the greatest failure of the current system is for young people who see no future.
In addition, a large proportion of people living in extreme poverty live in countries that are themselves economically and socially excluded. For example, in 2002, the United Nations Conference on Trade and Development (UNCTAD) estimated that 81 per cent of the population of the least developed countries (LDCs) lived on less than US$2 a day and 50 per cent on less than $1 a day.
Inequality within many countries and between the richest and poorest worldwide has grown exponentially over the last few decades.
Yet the dominant policy message has been: Grow first, distribute later.
Many countries gave this strategy the benefit of the doubt and followed the recipe. It has not really worked. Distribution has been slow in coming – threatening social cohesion and making people lose faith in governments, institutions and those with the power to change things. Today, for example, the middle class in Latin America is shrinking and there are more poor and unemployed people than at any time since the Great Depression of the 1930s.
Trust in authorities of all sorts has suffered. A recent regional survey found that trust in democracy is flagging in Latin America – a region that spent the 1970s and 1980s struggling to wrest democracy from military regimes.
In 1960, the income gap between the wealthiest fifth of the world’s population and the poorest fifth was 30 to 1. By 1999, it was 74 to 1. In 1995, average per capita GDP in the richest 20 countries was 37 times the average in the poorest 20 – a gap that has doubled in the past 40 years.
Would growth have been impaired or trade and investment diminished if wealth creation had been more evenly distributed these last 40 years? If we had at least maintained the ratio of 1960?
Certainly not. On the contrary, there would be fewer people living in poverty, a stronger middle class in the world and more stable social and political systems. There would be more consumers, greater demand and a more dynamic global economy. Let us not repeat the mistake. We need growth with equity – a globalization that leaves no one behind. That is the whole meaning of the Decent Work Agenda.
To learn more about this author, visit International Labour Organization's Website.
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