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Background

The session is the most important biennial meeting of the Economic Commission for Latin America and the Caribbean (ECLAC). It serves as a forum for the consideration of pressing development issues for the countries of the region, as well as an opportunity to review the progress of the Commission’s work.

The position document that ECLAC will present on this occasion will explore further the theme of equality addressed at its three previous sessions, in Time for Equality: closing gaps, opening trails (2010, Brasilia), Structural Change for Equality: an integrated approach to development (2012, San Salvador) and Compacts for Equality: Towards a Sustainable Future (2014, Lima).

On the basis of the Sustainable Development Goals and in the light of global economic trends, the position document for the thirty-sixth session, entitled Horizons 2030: equality at the centre of sustainable development, considers the policies and partnerships that the region will need in order to move towards a development path capable of ensuring greater equality and environmental sustainability. It also argues that new global public goods are required to guarantee stable growth with inclusion, the creation of quality jobs and environmental stewardship. It also makes regional and national policy proposals geared towards an environmental big push, in the framework of a renewed relationship between the State, the market and society.

 

Paths to equality for Latin America and the Caribbean

The Latin American and Caribbean region is at a crossroads today. It has long been and remains on an unsustainable path, with insufficient growth, high levels of inequality and little momentum towards structural change. And, despite the auspicious decade that has just passed, today the region faces an increasingly problematic external scenario.

In order to lock in the region’s undoubted recent social achievements, efforts are urgently needed to move the region onto a new, sustainable growth path with greater equality, by means of a renewed set of institutional and policy reforms.

 

Time for equality, Brasilia, 2010

Since 2010, when ECLAC presented the position paper on the theme Time for Equality: closing gaps, opening trails at its biennial session, the Commission has argued that equality must be our main guiding ethical principle and the ultimate objective of development. Following the advice of Prebisch —to observe the reality before starting to think— we must acknowledge the undeniable fact that Latin America and the Caribbean remains the most unequal region in the world.

We know that placing equality front and centre means breaking with the economic paradigm that has prevailed in the region for at least 30 years. But a look at the reality of our continent makes this a moral imperative. We have a clear conviction: that we must grow to equalize and equalize to grow.

This is no easy path, but taking it can no longer be postponed. Instilling equality will take structural change aimed at closing critical social and productive gaps and achieving compatibility between the economy, production, social dimensions and environmental sustainability.

 

Structural change for equality, San Salvador, 2012

As we argued two years later in San Salvador, in a new document, Structural Change for Equality: an integrated approach to development, we are driven by the deeply-held belief that equality is the horizon, structural change is the path and policy is the instrument. This path requires a new equation between the State, the market and society, while expanding the toolkit to tackle a broader range of objectives.

This means adopting a fresh approach in light of external constraints and the endogenous features that hold back the region’s development. External constraints include the loss of growth momentum and much cooler global demand, greater uncertainty over financial signals and access to financing, and the region’s lack of coordinated responses to the shifting configurations of global value chains.

The region’s internal problems include an out-of-date and disarticulated production structure, highly informal labour markets, low rates of investment with little absorption of technical progress, gaps in well-being and capacities, weak natural resource governance, and consumption patterns that are environmentally demanding, energy-intensive and short on public services. At the same time, the region’s institutions have long been inadequate to properly capture, regulate and allocate resources.

At this stage, the policy shift must galvanize investment to underpin a virtuous relationship between growth, productivity and environmental sustainability, by embedding knowledge into production and generating high value added, making the world of work more inclusive and achieving greater convergence between tax reform and social policy. These two aspects —tax reform and social policy— must have a firmly redistributive slant to reduce the various forms of inequality in the region and balance the expansion of private consumption with timely provision of good-quality public services, in order to underpin social cohesion and environmental sustainability. Proper governance of natural resources must be instituted to achieve more diverse, environmentally sustainable production patterns with positive impacts on employment and well-being.

 

Compacts for Equality: Towards a Sustainable Future, Lima, 2014

In Lima we stated that these proposals needed social covenants if they are to come to fruition. They need strategically planned, medium- and long-term initiatives capable of engaging a broad array of stakeholders and revitalizing civic participation. Compacts for Equality: Towards a Sustainable Future discusses the two major challenges to development in Latin America and the Caribbean: to achieve greater equality and to make development sustainable for future generations. The various chapters examine the social, economic, environmental and natural resource governance constraints on sustainability, as well as the challenges associated with strategic development options. They also further explore the equality approach developed by ECLAC at previous sessions, treating the world of work as a key arena. Consumption is analysed as it relates to the economic, social and environmental spheres, highlighting its potential to increase well-being as well as its problematic externalities in terms of environmental sustainability, the fiscal covenant and the production structure, among others. The dynamics existing between production structures and institutions are explored, drawing attention to ways in which the efficient organization of institutions can help to maximize contributions to development. The document concludes with a set of medium- and long-term policy proposals that need to be enshrined in social covenants and policy instruments for implementing, in a democratic context, the policies and institutional reforms that the Latin American and Caribbean countries need to resolve the dilemmas they face at the current crossroads.