Minister Ploumen’s letter to the Dutch parliament in late September highlights the focus on inclusive development in Dutch development policies. But what does inclusive development actually mean? Inclusive policies pay attention to wellbeing, instead of welfare; they focus on inequalities, instead of just economic growth, and recognize that the ‘trickle up’ effect is the only way of improving living standards for all.
On 28 September Minister Ploumen sent a letter to the Dutch parliament entitled ‘Inclusive development in the Dutch programmes for Foreign Trade and Development cooperation’. The key message of this letter relates to the motto of the new Sustainable Development Goals of the United Nations: ‘Leave no one behind’. This new agenda of the United Nations aims to eradicate extreme poverty by 2030, which had not previously been possible. Following this ambitious agenda, Minister Ploumen formulated concrete goals in her letter regarding education, health, water and sanitation, energy, decent employment and reduced inequality. These goals have to be ‘inclusive’: everyone needs to be reached, including the poorest of the poor.
Not just economic growth, but ‘inclusive development’ is the main theme of Ploumen’s letter. However, what is meant by this term? And more importantly, is inclusive development the answer to the global issues of poverty and inequality? Critics argue that without changing our understanding of economics, inclusive development is ‘business as usual’.
‘Trickle down’ effect outdated
Poverty has been reduced substantially in the past decades. However, millions of people still live in the direst of circumstances in extreme poverty. Moreover, inequalities have increased in many countries – both rich and poor countries. This growing inequality hinders social and economic development and political stability.
When the lowest income groups lag behind there are several consequences: economic potential remains unused, social cohesion decreases, the risk of conflict increases, and economic growth and long-term stability are undermined. The dominant theory of income growth for the poor resulting from a rise in average income – the so called ‘trickle down’ effect – is outdated. World poverty has decreased relatively, but in absolute terms the amount of poor people has remained constant, despite the continuous economic growth of the BRIC-countries and other emerging economies. Increasingly, empirical evidence proves the opposite: that ‘trickle up’ is the only way to improve living standards for all.
Inequality and exclusion as persistent processes
Inclusive development focuses on the poorest of the poor, which is a very diverse group of marginalized people. This group often includes people who work, or are looking for work, in the informal economy, live in isolated areas, have HIV/AIDS, are single mothers, prostitutes, ethnic or religious minorities, sick people, physically or mentally disabled people, and unemployed youth. For different reasons, these people have no chance of building their own sustainable future. They not only lack economic opportunities, knowledge and capital, but connection to, and support from, society as well.
The process of exclusion knows many socio-cultural and political barriers. For mentally or physically disabled people finding a job is close to impossible in most developing countries. In many societies they are treated as intrinsically bad, discriminated against, and hidden by their families because of shame and ignorance. Altaf’s study shows that long-term exclusion and discrimination can lead to the internalization of such attitudes and beliefs: people will exclude themselves from participation in social activities because they perceive themselves as inferior. This is illustrated in the person of Baki, a woman from Benin who was left behind by her husband, family and community because she is epileptic. People in her environment are afraid to touch her for fear of infection. Because of this social exclusion and stigmatization her self-esteem has plummeted. As a result she has excluded herself.
Figure 1: Baki, an excluded Beninese woman. Photo taken by Anika Altaf during fieldwork.
Governments, companies and social institutions often have a ‘blind spot’ regarding people like Baki. Political or religious motives and elite capture of resources make the work of organizations trying to reach the poorest of the poor even more difficult. Although short-term results guarantee future funding, projects are targeted at those with opportunities, instead of the poorest of the poor. Eliminating prejudices, changing institutions and investing more in democracy are a part of Ploumen’s inclusive development agenda, but economic growth is still emphasized. What will happen if the processes outlined above are not incorporated in our studies of growth and development? Shouldn’t we change our economic perspective first, before determining our policies?
Wellbeing instead of welfare
The current economic system in capitalist countries is directed towards the growth of individual welfare. This vision is being exported to development in poor countries. The assumption is that when individual welfare (income) increases, the welfare of society as a whole will improve. Economic growth is taken as the most important indicator of economic success, instead of sustainability or social equality. Policies are built on the idea that without growth there is no progress and that without growth there can be no investment in education, health care and social security either.
Yet, these assumptions neglect the question of distribution: who is to benefit from economic growth? And how, and why, should this income from economic growth be spent – to generate even more growth? How much growth is enough? There is no economic model that can answer these questions, because they are essentially political questions. Structural poverty, increasing inequality and environmental issues are causing societal unrest and conflict globally – not only in developing countries, but in Europe and the United States as well.
More attention should be paid to social-cultural and political causes of poverty, inequality and exclusion within economic studies. Instead of the emphasis on individual welfare, there should be a focus on societal ‘wellbeing’. Wellbeing is about what it means for people to live a good life within their social environment, as defined by Pouw & McGregor. This is important because human beings are essentially social beings, not hermits. Progress and growth should not only be about individual gain, but about societal gain. What kind of society do we want to create together? And what living conditions will we leave behind for future generations? These are important questions when talking about inclusive development.
Let’s turn the reasoning around. Investment in sustainability, quality education, health care and social security is not just an ‘expense’, it can be a source of growth and progress. So if there is slightly less growth, but this growth benefits everyone more equally, so what?
