Growth can’t come at the expense of social exclusion

Rick Nease / KRT

The decision of the government of Paraguay to dedicate the 2014 OAS General Assembly to issues of development and social inclusion comes at an opportune moment. Recent economic growth has been important to our region and, in that context, the delay in the full inclusion of all citizens in the benefits of development takes on fundamental importance.

We have maintained for years that, in addition to the weaknesses that still exist in our institutions and political practices, the full exercise of democracy in the Americas suffers from a serious problem of inequality, which not only affects democratic coexistence, but also is an obstacle to healthy growth.

Though the number of people living in poverty has dropped substantially in the past decade, many of those who have emerged from poverty still face extremely precarious conditions. About a third of Latin America’s population lives in households with an income of between $4 and $10 dollars a day.

They have escaped the poverty that still afflicts more than 167 million Latin Americans, but to call them the “middle sector” makes no sense. In truth, they are the millions of “not poor” people, who occupy an income level that keeps them extremely vulnerable.

Despite the fact that much of the recent alarm over inequality has focused on its economic aspects, especially on the distribution of income, it is worth noting that it also affects other areas of social life in ways that do not emerge from the presence of greater or lesser poverty.

Inequality is not expressed only in the enormous diversity of people’s buying power or income. It also comes from discrimination because of class, race, gender, geographic origin, differing physical capacities and other sources, which turn it into a multidimensional phenomenon and make it incompatible with our democratic ideals.

To be female, poor, indigenous, Afro-American, migrant, disabled or an informal worker means to start from a disadvantageous position in society compared to other groups.

Generally these categories entail different economic conditions, different levels of access to services, public protection, education or employment. Their origins as social categories may differ, but the main effect is to make the people in these groups more vulnerable to abuse, exclusion and/or discrimination.

The times in which we believed that the interaction between democracy and the market economy would reduce inequality are long gone. On the contrary, the massive injustice that exists in our countries in terms of the distribution of wealth and access to social goods seriously damages the social fabric. That is why the debate has ceased to be purely economic and has become one about public policies.

The political decisions that states make to improve distribution are what make the market economy compatible with democracy, and it is up to them to find a balance, within the rule of law, between growth and the reduction of inequality.

José Miguel Insulza is the secretary general for the Organization of American States.

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