Today, the Global Economy and Development program at Brookings convened a high-level panel to discuss how social inclusion should fit into the post-2015 development agenda. Panelists included Club of Madrid members Kim Campbell, former prime minister of Canada; Wim Kok, former prime minister of the Netherlands; and Cassam Uteem, former president of Mauritius. They were joined by Santiago Levy, vice president for Sectors and Knowledge at the Inter-American Development Bank and John Podesta, a former member of the High-level Panel on the Post-2015 Development Agenda. Brookings Senior Fellow Homi Kharas moderated the discussion.
Highlights of the panelists’ introductory remarks appear below, although the conversation ranged across a broad set of topics, including: education, migration, post-conflict issues, governance of global institutions, taxation, disabilities and youth, data disaggregation, labor markets, resilience—especially in the context of natural disasters, program design and implementation, political challenges, and building a long-term agenda. Event audio and video are now available.
Wim Kok: “It’s clear now to everyone in every society that inequality, and the underutilization of certain groups in society, is bad for economic growth”
We came to the conclusion … that the concept of shared societies is crucial for developed and developing countries, for regions to make best possible use of potential of every individual regardless of religion, ethnic background, et cetera. And we came to the conclusion that shared societies also pay economic dividends. So it’s not just for intrinsic reasons but also for economic reasons that it’s useful and essential for a country, for a society, to be inclusive.
I think it’s clear that the marginalization or the underutilization of the inputs of individuals in marginalized groups in society has a negative effect on the realization of development goals. But the situation is even more serious because the way in which the Millennium Development Goals have been used makes it possible that some people might say, yes, OK this country has a very good performance in terms of realizing the development goals but then the underutilization of the input of individuals of marginalized groups doesn’t come above the surface. So the general statistics may be alright but the precise effect, the precise outcomes for groups in society may not be alright. … So don’t talk too much about averages, about general mathematic outcomes you won’t realize without paying specific attention to the utilization and the input of specific groups in society. …
Why paying attention to marginalized groups and not just paying attention to median voters and the average citizen? As if there would be a contradiction between the two.
It’s clear now to everyone in every society that inequality, and the underutilization of certain groups in society, is bad for economic growth as well. So there’s no contradiction between approaching the median voters and using the potential of marginalized groups because if a society is unfair—and of course a lot can be said about what’s fair and what’s not fair—but if there is a lot of inequality in a society, if large groups in a society or in a region cannot participate on their own merits, economic development pays a price for it. So there is a moral, a moral intrinsic value in including everybody in society in economic and social development, but also economic arguments. And I think it’s important for each and every country to understand that this is not only of importance for developing countries, but also the developed world. And countries in the developed world would be well-advised to pay attention to that.
And our proposal is to make this specifically visible in the way the post-2015 development goals are going to be composed.
Kim Campbell: “The term ‘shared societies’ [is] this notion of giving people not just the opportunity to participate but a sense of dignity.”
The commitment to shared societies is in many ways a mentality. … And I think one of the things that we think about is how can we avoid doing the wrong things for the right reasons? And one of the ways of avoiding that is to try to get rid of the hubris that we know the answers to questions and understand that we don’t know all the answers. …
When we talk about shared societies, we’re not just talking about minorities or marginalized groups. A majority can be marginalized for certain policy purposes. The Club of Madrid has done a lot of work with women and peace and security, and we have a particular project in the Horn of Africa. And one of our participants … a woman from Uganda said, “I was talking to our foreign minister and he said, ‘But what do women have to do with peace and security?'” And she said, “then I explained it to him and he went, ‘Oh.'” And what I think we need is a lot of “Oh” moments where we come to understand that what we think we’re doing is having a differential effect on certain groups and how can we identify those groups.
What are the tools that we can use to make sure that we are not having bad outcomes because our policy is not well designed? And so the term “shared societies” has perhaps has a kind of New Age sound to it in a way—sharing and caring and a little bit Sesame Street—but the reason for it is because it’s a two-way street, it’s this notion of giving people not just the opportunity to participate but a sense of dignity. That we share a society, we share responsibilities, we share the need to try and understand how we’re doing things. But the ultimate result is meant to be … effectiveness. It’s meant to be policies that actually work, policies that don’t waste money.
But it’s a mindset. It’s a way of saying if we really want things to work, we have to understand that life in societies are very complex and that sometimes people are left out, either politically or socially or economically, and that sometimes majorities can be marginalized for certain purposes. Sometimes people can be marginalized geographically. There are all sorts of different ways. But if we ask those questions and don’t feel that we have to a priori know the answers, to actually see them as questions that need to be pursued, we’ll do a lot better job of all of our investment on economic development and empowering people and getting the results. So it’s a way of thinking not just a series of techniques.
Cassam Uteem: “We can say with a certain level of satisfaction that we have been able to reach where we have reached thanks in particular to the vision of our leaders who led the country to independence in 1968 … Thanks to the shared society vision.”
Our country is a relatively new country, but we had an advantage. That our country was a desert island 400 years ago. There were no inhabitants on Mauritius. We are all migrants. All our ancestors came either from Europe, from Africa, or from Asia. From Europe: France, England. From Africa: Mozambique, Guinea, Senegal, Madagascar. From Asia, India: all the different states of India and China. So you can have an idea how not only how heterogeneous is the Mauritian society but how complex such a society can be. And yet as you say we have achieved what we have achieved.
There is a long way to go to reach the standards of people living in the west. But we can say with a certain level of satisfaction that we have been able to reach where we have reached thanks in particular to the vision of our leaders who led the country to independence in 1968. Thanks to the shared society vision, as if we had the shared society vision before the shared society existed as a concept in our Club de Madrid. We realize, our leaders realize, the time of our independence in 1968 that we had a divided country. Half of the population voted in favor of, and half of the population—almost half—voted against the independence of Mauritius. …
So the leaders of the day, in particular the prime minister of the day, the first PM of Mauritius … he had the wisdom of, immediately after the election, asking the opposition to join government: Why don’t you join in and we’ll work together for the progress of Mauritius? There was a lot of problems in between of course. Partisans on one side who had just been fighting a hard and tough battle on the ground, refused. Most of the grass-roots workers refused. But the wisdom of the leader prevailed and there was a coalition government formed. And this brought, slowly, unity among the people.
Not 100 percent unity of course, but unity in a large measure. Consensus was reached and gradually it was this government, this first coalition government, that set the scene for the development of Mauritius.
Santiago Levy: “Everybody is losing in a context in which we’re trying to reach more inclusion through the wrong set of programs and institutions.”
Sadly Latin America stands out as being the most unequal region in the world. Actually, 14 of the 15 most unequal countries in the world are in Latin America, so not something to be proud of. The region has made quite a bit of progress in reducing extreme poverty in terms of ensuring that the poorest 10, or 15, or 20 percent of the population in each of these countries now has much better indicators of consumption and access to health. But the region has a long way to go in terms of reducing inequality and a much even longer way to go in constructing shared societies.
There’s a big difference between lowering your indices of extreme poverty and having shared societies in terms of real inclusion in terms of people. And what I’ve been trying to highlight in my book is that the structure in which social programs are currently carried out in Latin America is not conducive to a shared society if you think about a shared society in terms of including everybody with the same set of standards of rights and obligations.
Particularly vis-à-vis the labor market. What is true about the region is that depending on which country you look at, 50 percent, 60 percent, 80 percent of the labor force finds itself in informal jobs. And only 30 or 40 percent of the population of the workers have access to health and pensions through a formal job.
The structure of programs that is currently being put together to solve this problem is not conducive to inclusive growth and is actually having perverse incentives and perverse results because it is actually making the informal sector bigger. And is giving prizes for being in the informal sector to the extent that formal people have to pay for certain benefits, informal people are getting benefits for free. …
So the details of the program, the structure of taxation and the structure of program design, is central to achieving shared prosperity. This is a very important point. People applaud after any social program and they think that any social program is to the good. The point that I am trying to make is that not any program will be to the good and that you have to think carefully about the incentives and the message that you give in terms of rights and obligations. And the region, Latin America, although it has made great progress in the last decade in reducing extreme poverty, is not really having the architecture of social programs that will lead to a more shared society and a more inclusive society. And what’s important is to raise consciousness that the potential of individuals is being wasted. Their contribution to society is being wasted. What they could be as productive individuals is not being achieved. And that in fact everybody is losing in a context in which we’re trying to reach more inclusion through the wrong set of programs and institutions. So big challenge ahead even though some progress made so far.
John Podesta: “We’ve seen substantial poverty alleviation that has come from strong growth, but in order to be sustainable and shared growth—inclusive growth—you had to be conscious of the fact that you had to reach the most marginalized people in society.”
I think with our three co-chairs … we began with trying to decide what the mission of this panel, having been charged by the secretary-general to consider how we move forward in the post-2015 environment. I remember in the first meeting the secretary-general said we have to keep our head in the clouds but our feet on the ground. And our chairs pushed us to adopt a mission … from the very first meetings that we had we saw and came together as a group … that ending extreme poverty was both aspirational—that it could grab the mind-space, the attention and the commitment globally—but it was also operational. …
When I say it was operational I think we tried to take the lessons from the MDGs that Wim Kok discussed. … and I’ll just read two sentences from our mission that we adopted early, which was “Our vision and our responsibility is to end extreme poverty in all its forms in the context of sustainable development and to have in place the building blocks of sustained prosperity for all. The gains in poverty eradication should be irreversible.”
So if you start from that perspective, that that was a challenge to the world that we could actually achieve and make operational, then I think you have to quickly move to the idea that you could leave no one behind. That you had to reach a perspective that … reached into marginalized societies if your goal was to end extreme poverty. And we had to get that right this time around.
We saw the gains that had occurred as a result of the MDGs and the concentration and bringing together governments and international institutions and global philanthropy around a simple set of goals. And the fact that they could move … analysis, move money, move commitment toward achieving goals. But that in order to get the whole way to really end extreme poverty, we had to begin with that frame of leaving no one behind. …
We’ve seen substantial poverty alleviation that has come from strong growth, but in order to be sustainable and shared growth—inclusive growth—you had to be conscious of the fact that you had to reach the most marginalized people in society. So this concept of inclusive growth has to be connected, and people—the poorest people in the world—have to be connected to ladders of opportunity. That means connections to the financial system, connections to the educational system, connections to the health care systems of their countries. So I think at the end of the day … the analytic context was that strong, sustainable growth could only come if you connected everyone to a shared prosperity model.
Event audio and video are now available.
I think blended finance, development finance, is what’s needed, is the future. The U.S. is using a model that was created 40 years ago and I think it’s way past time for modernizing our capabilities.