You are here
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 session also enables the governments of member States to examine the secretariat’s report on the Commission’s activities and thus apprise themselves of the work accomplished by ECLAC during the two preceding years. Furthermore, through the programme of work that the governments adopt and the calendar of conferences they approve, they also define the mandates that will guide the Commission’s work in the future.
The position document that ECLAC will present on this occasion, The inefficiency of inequality, draws attention to the urgent need for a political big push to overcome the region’s economic lag compared to the rest of the world. To that end, our region needs to move away from a culture of privilege towards a culture of equal rights. Inequality is inefficient. It imposes a high cost on our societies in terms of economic growth, wasted human resources and talent, quality of life, social relationships and political systems. ECLAC therefore proposes that equality is a driver of sustainable development, promoting innovation, higher productivity and environmental protections. Equality is not only a product of the economic system, it is also an explanatory variable of long-term economic efficiency. Equality creates inclusive institutions and a culture that rewards innovation and effort, not economic actors’ social class, ethnicity, gender or political connections. Equal access to skills and opportunities is increasingly important given that the technological revolution requires better education, coordination and cooperation among actors in order to adopt new technology and build new sectors. Equality strengthens democracy, with democratic States providing more public goods and positive externalities that call for technological change, economic and political stability, and environmental stewardship. Lastly, equality in the global economy helps boost demand and deescalate internal and external conflicts by promoting development.
The environmental big push proposed in 2016 opens up opportunities for innovative technology to create new synergies, such as technology to manage sustainable and digitalized cities, expand mass transport systems, conserve biodiversity, develop biomaterials and harness renewable energy, leading to the development of value chains. Progress in such areas would boost a range of productive activities, by creating new material conditions for social inclusion and equality, and by redirecting investment towards a low-carbon growth path. The environmental big push is therefore the driving force behind a new development model with sustainability and equality at the centre.
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.
Horizons 2030: Equality at the centre of sustainable development (Mexico City, 2016).
In the light of global economic trends, the position document presented at the thirty-sixth session, considered the policies and partnerships that the region needs in order to move towards a development path capable of ensuring greater equality and environmental sustainability. It also argued 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.
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.