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How can the world address inequality? 7 experts explain

The COVID-19 pandemic has exacerbated socioeconomic inequalities within and across countries

By: EBR - Posted: Wednesday, July 7, 2021

Mitigating inequality requires a mix of bottom-up and top-down changes that address the underlying social and economic systems.
Mitigating inequality requires a mix of bottom-up and top-down changes that address the underlying social and economic systems.

by Abhinav Chugh*

The COVID-19 pandemic has exacerbated socioeconomic inequalities within and across countries. The policy responses designed to mitigate them in the form of either relief and recovery packages or welfare protections have mostly proved to be short-term fixes. In the long-term, however, the distributional consequences of the pandemic between and within countries, as in during previous pandemics and recessions, are bound to widen inequality.

According to the World Inequality Database 2020 update, Latin America and the Middle East stand as the world’s most unequal regions, with the top 10% of the income distribution capturing 54% and 56% of the average national income respectively. Despite Gulf countries (Bahrain, Kuwait, Oman, Qatar, UAE, Saudi Arabia) having among the highest GDP per capita levels, they have also marked extreme inequality levels, with little variation since the 1990s. However, the starkest change has been the rise in concentration of incomes in the US, with the top 10% witnessing an increase from 34% to 45% of the national income between 1980 and 2019.

The data are an indicator that countries with strong investments in public services, social protection, and labour market policies have the lowest inequality levels, with Europe standing as the most equal of all regions driven by its redistribution and progressive taxation, seen in the Commitment to Reducing Inequality Index.

Looking at global inequality beyond purely from an income distribution lens, it is critical to take into consideration multidimensional factors such as social mobility, gender equality, livelihood infrastructure, technology access, the voice of civil society, privacy, social and environmental protections, progressive tax laws and labour rights when examining the how societies perform on reducing inequality and serving public interest.

The COVID crisis has forced us to reimagine our shared futures as the world attempts to rebuild. From proposals relating to basic income and collecting the tax deficit to the more emerging debate on inheritance for all, the asymmetric impact of the pandemic and divergent recovery beckon a universal call for us to build back broader.

Mitigating inequality will now demand a mix of bottom-up and top-down changes that recognize the social and economic systems aggravating inequality are a matter of choice. Where do we go from here?

We asked seven global experts from the World Economic Forum Expert Network to provide their perspective on how we can build a better future where we leave no one behind. Here’s what they said.

‘It is particularly crucial to increase the minimum wage’
Tak Niinami, Chief Executive Officer, Suntory Holdings and Senior Economic Advisor to the Prime Minister of Japan

The pandemic has made it apparent that Japan also faces the issue of inequality. A widening in the gap must be prevented by all means as it would bring social unrest and social divide. In the short-term, given Japan’s comparatively low wages, it is particularly crucial to increase the minimum wage and thoroughly implement an “equal pay for equal work” policy to bridge the gap between regular and non-regular workers.

The acceleration of redistribution of wealth is also imperative. Taxation on assets and capital gains should be increased so that this resource can be utilized to fund NPOs (nonprofit organizations) that can take measures against issues such as poverty and isolation.

Furthermore, in the long-term, I believe education is key in mitigating inequality. The widening education gap can spill over from generation to generation, creating a chain effect that must be avoided. Technology can prove to be a solution if it can be applied to ensure equal opportunities, enabling high-quality education to anyone and anywhere, no matter where you live.

‘Well-funded and quality universal healthcare must be the legacy of the pandemic’
Deepak Xavier, Head of Inequality Advocacy and Campaigns, Oxfam International

The world risks the greatest rise of inequality since records began, and today it is inequality that perpetuates COVID-19, which is ending so many lives. The grotesque inequality in accessing healthcare is proving fatal. To be without a hospital bed or medical oxygen in the face of a pandemic is frightening enough. However, for most of the world that has long been the case. Pre-pandemic 10,000 people were dying daily due to lack of access to healthcare.

Progress on universal healthcare is achievable – as countries such as Costa Rica have shown. Implementing a fair and progressive tax system to avoid concentration of wealth to the top 10% is one way to provide a fiscal boost. A 0.5% extra tax on the wealth of the richest 1% alone could raise $418bn each year which could be redistributed towards resilient healthcare systems. Issuing US$1 trillion of IMF’s Special Drawing Rights (SDRs) global reserve asset would dramatically increase the funds available to countries – for example, the Ethiopian government will have access to an additional $630 million — enough to increase its health spending by 45%.

Well-funded and quality universal healthcare must be the legacy of the pandemic: to save lives and better tackle future pandemics.

’Support our people outside of the "nine to five".’
Leslie Parker, Partner and Member of the Board of Directors, Kearney

It used to be that there was very little crossover between our work and personal lives. Since COVID, that has changed. The new work-from-home model has given us intimate access to our colleagues’ personal lives – and surfaced a whole new set of inequalities.

We see family members juggling caring responsibilities with the demands of their jobs. We see people who live alone, who might not physically encounter another human being that week. We see housemates sitting three to a table, trying to work at the same time. And we see laptops propped on kitchen counters, stacks of boxes and pairs of knees, as people search for an elusive quiet space or change of scenery.

The ability to work from home is an incredibly privileged position for many. But with working patterns and norms changed beyond all recognition, we need policies that take on these and other new inequalities – including lack of choice over working location – into account. It’s not enough to dish out some grants for home office equipment. What about some let-up from home schooling or eldercare, or help to tackle loneliness? Why not help our teams create better connections with one another that can offer more than the virtual happy hour and more time behind a laptop? We need to go beyond one-dimensional Diversity, Equity, Inclusion programmes and policies, and really support our people outside of the ‘nine to five’.

At Kearney we have taken a first step by asking employees around the world to tell us what would improve their lives and how we can help as leaders. We are already seeing wellbeing, both physical and mental, as a major theme. We introduced more mental and physical health programmes with free classes available to employees, redesigned our future work model strategies to allow for flexibility of working hours and location (no longer adopting five-days-a-week office model), offered an option to go to co-working spaces to employees whose current situation is not supportive of their work or mental health and improved coaching and mentoring guidelines in the absence of in-person onboarding and support.

‘Promote more transparent and accountable systems’
Ibrahima Hathie, Distinguished Fellow, Initiative Prospective Agricole et Rurale (IPAR), Senegal and Southern Voice network member

Sustainable Development Goal 10 of the 2030 Agenda seeks to “reduce inequality within and among countries”. Yet, the goal’s targets and indicators focus on horizontal inequality and exclu­sion of the vulnerable and marginalized population from opportunities. The United Nations’ overarching principle of “Leave No One Behind” reflects this orientation and calls for a transformative agenda. However, it fails to address deep-rooted social, economic, and political systemic problems that preserve and often amplify vertical inequalities.

A path to achieving this must seek to reduce the political influence of elites in the formulation and implementation of public policies. It would promote more transparent and accountable systems. Tackling inequalities between countries is also imperative if we are to face the consequences these have on the most vulnerable in developing countries. Addressing overlapping disadvantages through a comprehensive development strategy can be an excellent response to horizontal inequalities. Vertical inequalities require more: progressive economic institutions with pro-poor taxation, investment, and trade.

In Senegal, for example, the government should choose and invest heavily in food value chains, funding of research of these value chains, training of family farmers, agricultural entrepreneurs, technicians, and engineers and introduce multisector governance to ensure smooth coordination to achieve the goals set out by the Malabo Declaration. This would lead to increased industrial development, improved health and nutrition, and decent and abundant jobs for young people and women.

‘The basic fundamentals of knowledge creation and collaboration must be addressed’
Marie McAuliffe, Head, Migration Research Division, International Organization for Migration

In addition to measures on improving social protection of migrant workers, reducing costs of international remittance transfers, and bolstering migrants’ rights throughout the migration process, the fundamentals of knowledge creation and collaboration must be addressed. Affected communities impacted by increasing inequality must be part of processes aimed at formulating effective responses.

Developing country experts and research institutions must be able to meaningfully participate in researching, proposing, designing, and evaluating solutions according to their priorities and needs. A much greater focus on leveraging opportunities to undertake participatory and collaborative research with (and for) marginalized populations is needed. Only then can the programmatic and policy responses designed to reduce inequality globally be truly sustainable.

We advocated this approach as part of consultations on the UN Research Roadmap on COVID-19, which makes a strong case for participatory research to support long-term global transformations. In 2017, IOM invited the world’s leading migration researchers from around the world to join in sharing their expertise and knowledge in support of the 2018 global compact on safe, orderly and regular migration. As a consequence, the resolution on the Global Compact for Safe, Orderly and Regular Migration was adopted by the United Nations General Assembly in 2018.”

‘Increase public investments in the formal and informal care economies’
Susan Ferguson, Women Representative for India, UN Women

The COVID-19 crisis in India has impacted millions, not only those suffering from the disease, but also those who care for them. As always, women have taken on the heavy burden of caring for the sick and finding ways to meet their family’s basic needs. A recent Oxfam report shows that Indian women and girls put in 3.26 billion hours of unpaid care work every day — a contribution of at least ?19 trillion a year to the Indian economy.

Yet in India, duties performed at home have historically not been considered “work,” because of unequal gender and caste norms. And now, with after the second wave of COVID-19, the combination of illness, unpaid care, economic slowdown and lack of access to financing for female entrepreneurs means that many women are unable to return to work.

If these trends aren’t reversed, they will have a devastating impact on the economy and further exacerbate gender inequality. For this generation of women to emerge relatively unscathed from this pandemic and be able to return to the workforce, we must invest seriously in education and livelihoods of women and girls in India. UN Women’s Second Chance Education programme is a prime example of how we can and must focus on women’s livelihoods right now, before the equality gaps widen even more. Another way to mitigate the inequality crisis would be to increase public investments in the formal and informal care economies and tap into the job creation potential of the care economy.

In the end, it will come down to changing attitudes. Whether it’s at home, in the office or in the fields, we must stop taking women’s work for granted.

Don’t use the pandemic as a justification to discriminate and exclude
Melody Patry, Advocacy Director, Access Now

From Singapore to Jamaica, governments are scrambling for solutions to help the world return to a pre-virus normality. Vaccine certificates — or “passports” — that record and authenticate vaccination statuses, however, are short-term fixes that potentially pose long-term risks to human rights. These fast-tracked stopgaps are a blueprint for exclusion and discrimination, and present serious and disproportionate threats to the privacy and security of millions of people.

COVID-19 and its reverberations already impact our most vulnerable and underserved individuals and communities — from limited health care, to increased economic instability — we cannot allow techno-solutionism to exacerbate the divide further.

Global leaders, and their industry counterparts, must stop, recalibrate, and ensure technology plays a positive, cornerstone role in pandemic recovery. As laid out by U.N. Special Procedures on the eve of RightsCon 2021, "we need to act together to embrace the fast-pace expansion of digital space and technological solutions that are safe, inclusive and rights-based."

*Specialist, Content Partnerships and Community Curation, Strategic Intelligence, World Economic Forum
**first published in: www.weforum.org

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