A Regional Agenda on Inequality and Exclusion: The Case of Latin America and the Caribbean

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By Paula Sevilla Núñez, Pathfinders Program Assistant at the NYU Center on International Cooperation

On September 30th, the Advisory Council for the Pathfinders Grand Challenge of Inequality and Exclusion met for the first time in Mexico City to find a way to reverse the rising trend of inequality and exclusion. The meeting took place on the side-lines of the Third Regional Conference on Social Development organized by the Economic Commission of Latin America and the Caribbean (ECLAC), where representatives of Latin American Ministries of Social Development and partners came together to discuss challenges and opportunities to address slowing rates of poverty eradication and growing rates of inequality in the region.

Mexico City (Photo: Paula Sevilla Núñez)

Latin America and the Caribbean is known as the world’s most unequal region, and combating inequality has long been at the forefront of ECLAC’s agenda. Under the leadership of Executive Secretary Alicia Bárcena, who is also a member of the Advisory Council of the Grand Challenge, ECLAC has played a major role in measuring levels of inequality and exclusion in the region and promoting the social and economic inclusion of all Latin Americans, especially historically disadvantaged and vulnerable populations. Speaking during the conference, Ms. Bárcena warned that in order to achieve the goals of the 2030 Agenda the region would not only require an annual economic growth rate of 3%, but would also need to reduce inequality by 0.5%. Instead, after experiencing advancements in the region between 2002 and 2014, economic growth has slowed and the reduction of inequalities has stalled. These trends are concerning since, as ECLAC has repeatedly argued, “inequality not only constrains poverty reduction but entails a loss of productivity that generates substantial costs for societies.”[1] The costs are economic, but also political.

The Grand Challenge of Inequality and Exclusion acknowledges that inequality and exclusion are a source of political grievance that can undermine citizens’ trust in institutions and governments. Addressing the challenge of inequality and exclusion requires an understanding of how disparities in both material opportunities and access to the benefits of economic growth and globalization are experienced by citizens as a form of violence, thus limiting societies’ ability to reap the benefits of economic development and achieve the 2030 targets for peaceful, just and inclusive societies (SDG 16+).

Yet despite the complexity of the challenge, actions are being taken to tackle it. New generations of social welfare policies can learn from and build upon advancements in poverty eradication achieved through previous cash transfers and social protection programmes.[2] Efforts like the Montevideo Strategy on Gender[3] and the Declaration of Panama that emerged from last year’s conference constitute beacons that can guide the region’s promotion of inclusive policies, both collectively and nationally.[4]

(Alicia Bárcena speaking at the Regional Conference — UN ECLAC)

Mexico was represented on the Advisory Council by Martha Delgado Peralta, Undersecretary for Multilateral Affairs and Human Rights. In early October, Mexico not only played host to the ECLAC Conference, but also witnessed an event which illustrated the salience of these issues in Latin America. Shortly after the opening of the Conference, the Ministry of Finance and the civil society organization Fundar revealed a list of almost ten thousand people who had received tax exemptions from the government between 2007 and 2015. These exemptions totalled 274 billion Mexican pesos (around 14 billion US dollars), of which almost a quarter went to just 10 out of the 7,885 people and companies identified.[5]

This case resonates with the work of the Grand Challenge of Inequality and Exclusion for multiple reasons. Firstly, tax evasion is a key challenge to address inequality in Latin America and the Caribbean; it amounts to 6.3% of the region’s GDP, four times what is spent on social protection.[6] Secondly, it shows that the Grand Challenge cannot be tackled by simply focusing on the poorest alone, but requires measures to be taken to address the concentration of wealth at the upper echelons. Tellingly, the four-year-long litigation process initiated by Fundar to make this information public is a clear reflection of a citizenry that no longer accepts inequality as inevitable or exclusion as acceptable. It may also be a promising indicator of an administration and a President that have been keen to reiterate a commitment to the social and economic inclusion of all Mexicans. We need to build on the momentum these opportunities offer to show that policies matter, inequality is not inevitable, and change is possible.

[1] ECLAC, May 2018. The Inefficiency of Inequality. https://www.cepal.org/en/publications/43443-inefficiency-inequality

[2] ECLAC, October 2019. Critical obstacles to inclusive social development in Latin America and the Caribbean. https://crds.cepal.org/3/sites/crds3/files/19-00578_cds.3_critical_obstacles_web.pdf

[3] ECLAC, March 2017. Estrategia de Montevideo para la implementación de la Agenda Regional de Género en el Marco del Desarrollo Sostenible hacia 2030. https://www.cepal.org/es/publicaciones/41011-estrategia-montevideo-la-implementacion-la-agenda-regional-genero-marco

[4] ECLAC. 13 September 2018. “Declaration of Panama” Reaffirms Latin America and the Caribbean Official’s Commitment to Reduce Inequalities.” https://www.cepal.org/en/pressreleases/declaration-panama-reaffirms-latin-america-and-caribbean-officials-commitment-reduce

[5] Najar, Alberto. 2 October, 2019. “La condonación de impuestos del SAT: el escándalo de los famosos, empresarios y políticos de México a los que perdonaron sus deudas con hacienda.” BBC News Mundo. https://www.bbc.com/mundo/noticias-america-latina-49914364

[6] ECLAC, October 2019. Critical obstacles to inclusive social development in Latin America and the Caribbean. https://crds.cepal.org/3/sites/crds3/files/19-00578_cds.3_critical_obstacles_web.pdf

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