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Global trends in inequality and social fragmentation in fragile and conflict-affected states represent two fundamental obstacles to inclusive development. Policies to counter the concentration of wealth and power exist, as Latin America has shown. But we also need to address the systems that generate ever greater divergence.
A recent remark by a Nigerian oil businessman on his country’s economic woes illustrates the scale of the challenge in promoting inclusive development where it is most badly needed. “The benchmark effect of this downturn is for the guy who understands the value of education and struggled to get his kids to school in England,” the businessman explains, bemoaning the “extra cost of fees.”
Bluntly put, Africa and the world lament the rise of Islamist terrorism or ungovernable mega-cities in Nigeria; Nigeria’s elites ponder how to afford private school fees in Europe in the light of devaluation. This estrangement between the globalized perspectives of national elites in developing and fragile states, and the very limited possibilities for mobility of the vast majority in those societies, represents a turn of the screw in efforts to achieve a more egalitarian, fairer and more stable world. No longer is this just a question of national development, of “bridging the gap” between rich and poor countries, but a conundrum derived from worldwide economic and technological processes, licit and illicit, that reach deep into the tissue of fragmented and conflict-affected societies.
Before considering how to approach inclusive development, therefore, it is essential to have a panoramic view of the components and causes that need to be addressed. First, there are the systemic trends driving global inequality, as delineated by authors such as Chrystia Freeland or Joseph Stiglitz: technological progress, deeper international economic integration and deliberate policy-making on behalf of the rich (e.g. in fiscal matters or offshore finance).
The derivatives of these interrelated trends are easy to spot. The International Labour Organization’s recent map of inequality shows all regions bar Latin America, and parts of Africa and the Middle East, seeing increases in income inequality over the last 20 years. We know, from Oxfam and others, about the extraordinary concentration of global wealth. Recent work from the World Bank offers a fascinating nuance in the form of an “S-shaped” graph.
Matters are made more complicated in fragile or conflict-affected states. Here, as in Nigeria, narrow, increasingly rootless elites have merged with the global one per cent. But back home, chronic poor governance, state capture and sectarian fragmentation make it enormously hard to achieve inclusiveness. Consider, for instance, the dilemmas of Yemen’s National Dialogue Conference, a heroic UN-backed effort involving 600 delegates and generating 1,800 recommendations, yet with little effect on the country’s very strained political settlement.
A slightly different circumstance is found in post-conflict Mali or Guatemala, where long-term group (or “horizontal”) inequalities have become embedded in the way societies are governed, generating chronic barriers to inclusiveness through low tax, high insecurity and state neglect. Charles Tilly termed this “durable inequality.”
As a result, it is vital that donor approaches on behalf of inclusiveness span the breadth of the question, not piecemeal bits of it through well-meaning projects.
At national level, they should draw from the successful levelling policies of recent years in Latin America, particularly involving public education, conditional cash transfers or focalized welfare programmes, or the affirmative action of Malaysia and other developmental states. While entrenched horizontal inequalities are hard to overcome and resurface in unexpected ways, a range of political and economic interventions do exist to counter them.
Obviously, future donor policy must consider rigorously the nature of national linkages to the global economy. The competitive nature of global capitalism, as the World Bank admits, can militate against fair tax rates and welfare spending. For low-income countries, meanwhile, economic connectedness tends to be mediated through natural resource exploitation and trading zones, both of which unerringly generate vast inequalities and require targeted policy responses.
Lastly, we must reflect wisely on the very mechanisms used to bring about inclusive development. Astronomic inequality levels, Freeland reminds us, risk repeating the Venetian oligarchic Serrata of 1297. We have to make sure the UN and development bodies do not suffer an attitudinal shift towards complacency through seemingly minor vices as nepotism, unpaid internships, and favours for insiders.
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