‘Employment with full rights holds the master key to equality; and that must come with social policies to tackle the risks on the road to structural change’.
This is the central message in a new blueprint for closing the equality gap put forward by the United Nations’ Economic Commission for Latin America and the Caribbean (ECLAC) in a 300 page report: Structural Change for Equality, An Integrated Approach to Development.
The document was presented to regional representatives by ECLAC’s executive secretary Alicia Bárcena at the 34th biennial meeting of the commission, held in San Salvador at the end of August 2012.
These proposals follow on from the 2010 report: Time For Equality: closing gaps, opening trails. Both ECLAC publications argued that the strengthening of the newly democratic governments in the region depends on greater equality of opportunities and rights.
The 2010 report ended with the affirmation that: ‘social equality and economic growth that transforms the production structure are not incompatible, and [that] the challenge lies in finding the synergies between them.’
According to ECLAC in 2010: ‘there is no contradiction, but rather convergence: equality for growth and growth for equality.’
The newly-released report attempts to build on the insights of the earlier analysis. It is based around three main goals: structural change to underpin progress towards more knowledge-intensive sectors; convergence to reduce internal and external gaps in income and productivity; and an insistence on the equality of rights.
ECLAC sees structural change as putting qualitative refroms of the production structure at the centre of growth. As Latin American economies open to global markets, the report argues that they will only be able to offer more equality by the ‘greater participation by knowledge-intensive sectors in overall production. This fosters the building of capacities, knowledge and learning in coordination with production and investment across the economy and the social fabric.’
In this way, industrial policy and macroeconomics are seen as the tool for achieving greater equality. As a result, the report claims: ‘structural change creates job opportunities in higher-productivity sectors while pushing labour market participation rates up and unemployment and informality rates down. There is no question that all of this has positive impacts in terms of poverty and inequality reduction.’
This emphasis on structural change for growth goes against the neo-liberal open market policies common throughout the region in the 1990s and the beginning of the new millennium.
Most importantly perhaps, as the report stresses, macroeconomic changes on this scale ‘require the return of politics and of the State’s role.’
Specifically, ECLAC calls on the region’s governments to actively pursue policies that will promote investment and growth. It also calls on the states to strengthen regulation and redistribution of wealth.
This is made all the more urgent, ECLAC claims, because Latin America is a region ‘where income and wealth tend to be over-concentrated in the top percentile, both proportionately and in comparison with other regions.’
In a similar vein, Structural Change for Equality warns that ‘the prevailing pattern up to now has been for investment to reinforce the yawning gaps in productivity that feed labour market segmentation in terms of job quality, labour productivity and wage income,’ and calls for a recognition by governments that an effective development policy of the kind outlined in the report contributes to thriving, more equal societies.
Alicia Bárcena, the executive secretary of ECLAC, concluded the San Salvador meeting by urging the countries of the region to embrace the idea of structural change for equality, and to study ways it could be applied to their national contexts.
For her part, in a message to the San Salvador meeting, Brazilian president Dilma Rousseff commended the ECLAC report, and called on it to ‘continue its effective contribution so that the governments of Latin America and the Caribbean can pull millions of people out of poverty and misery, and build a worthy, sustainable future which will include all human beings.’
Read the report in Spanish