Will we reduce inequalities if we “foster inclusive growth”? A panel discussion I joined recently suggested so. Time to disagree.
Director at CONCORD Europe
We are looking back at another edition of the European Development Days (EDDs). Again, representatives of the development sector gathered to exchange ideas, information and strengthen their networks with their peers. This year, the EDDs set out to address inequalities and build a world which leaves no one behind.
As part of this event, the European Commission’s Directorate-General for Economic and Financial Affairs invited me to speak about “Fostering Inclusive Growth” in the light of reducing inequalities. The title of this discussion upheld the long-standing mantra that economic growth will solve the pressing issue of inequalities. It was my priority to argue against the assumptions which underpinned this panel discussion.
Despite – to various degrees and from different angles – all agreeing that the economic model must not leave anyone behind, none of my colleagues on this panel were willing to question whether economic growth is a solution to the problems of our times, even in the face of the mounting evidence to the contrary. The pursuit of infinite growth on a finite planet has led us down a path of massive overexploitation of our natural resources in order to constantly increase consumption…and create profit. This cannot go on any longer. The Earth is a closed system, not an open market.
The neoliberal model based on economic growth works in the interests of the privileged few, but not for the majority of people. While profit may skyrocket for CEOs of international corporations, it is their very workers who continue being left further and further behind (never mind the people who don’t even have a job). People are more than simply a labourforce. Breaking down inequalities between the owners of capital and workers will only happen when governments have the will and power to do so. If we want to foster inclusivity and well-being, we must prioritise the rights of workers instead of the interests of corporations.We also need to think to the future: what will happen in this fast-paced world of robotisation, digitalisation and artificial intelligence if we continue to allow corporations to make a profit through automation while reducing staff? Governments need to step in and take a firm stand in safeguarding people’s jobs instead of the interests of companies.
And while they are at it, governments should work with companies to open up their governance structures, to democratise and rethink the overall purpose of corporations.
What most see as economic prosperity does not mean progress for all. Progress for all people means that everyone’s sense of well-being is improved; it means that people are able to fulfill their potential; and it means a more equal distribution of wealth, equal access to health care, education, opportunities and resources.
Right now, with our sole focus on economic growth, we only see the inequalities of opportunities and outcomes widen. It’s no wonder that between the plundering of our planet and rising inequalities, we are causing social unrest.
So, no – inclusive or not, economic growth is no cure for inequalities. After a certain point, quite early on the development path of a country, the so-called trickle-down effect just ceases to happen. And if we do more of the same, we will get more of the same – soaring inequalities. A much-needed systemic change can start with us, with the influence, expertise and passion of the development sector. What if the next time we gather at the EDDs, moving beyond the growth paradigm is not a radical idea anymore? Then we might be able to truly tackle inequalities!