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Inequality and the post-2015 agenda
This panel consists of:
● Sara Murawski (The Broker)
● Marc Vandepitte (Technische School
Mechelen)
● Evert-Jan Quak (The Broker)
● David Sogge (Transnational Institute
and NOREF)
Discuss inequality and the post-2015
agenda at www.thebrokeronline.eu
Inequality is a hot topic..
● International institutions: World Bank, IMF
and OECD have changed their discourse..
“The benefits of economic growth DO
NOT trickle down automatically. Greater
inequality DOES NOT foster social
mobility.” (OECD 2012)
Inequality is a hot topic..
● Recent literature & newspapers: Joseph Stiglitz
(Price of Inequality, 2012), Paul Krugman
(NYT) Martin Wolf (FT), Thomas Piketty with
Capital in the 21st
century and his famous
formula r > g..
Inequality is a hot topic..
● (International) governments: World
Economic Forum (2014), Obama's State
of the Union, European troika..
“One of the leading economic stories of
our time is rising income inequality, and
the dark shadow it casts across the global
economy.” (Christine Lagarde, IMF)
Post-2015 process
● MDG's did not pay a lot of attention to inequality
● High inequality puts MDG's under pressure
● But income inequality does play an important
role in the design of the post-2015 agenda:
-Open Working Group (OWG) on Sustainable
Development Goals (SDG)
-Letter from 90 academics to High Level
Panel (HLP), calling for 'top-level goal to
reduce inequalities'
What do the numbers tell us?
● Income inequality measured by the Gini-index,
focused on within-countries
● The world’s richest 1% owns 40 % of global
wealth, while the bottom half owns merely 1%
● Two thirds of the world population live in
countries where income inequality increased
between the mid 1990s and the mid-to-late
2000s
● The crisis has worsened inequality
Increasing inequality worldwide
(source: Conference Board of Canada, 2012):
Fragile global middle class
● More than a billion people live in extreme
poverty (below $1.25 line)
● In 2010, 2.8 billion people, which is 40% of the
world's population, was living on a daily income
of $2 - $10
● Almost 1 billion people live just above the
poverty line, between $2 and $3
● Economists warn that the global middle class is
very fragile, and runs the risk of falling below
poverty lines due to the slow-down of the global
economy
Fragile global middle class
(source: Financial Times)
Relation between inequality and growth:
● Kuznets curve has been severely criticized
● Inequality hinders poverty reduction
● Inequality blocks growth itself
“Over longer horizons, reduced inequality and
sustained growth may thus be two sides of the
same coin.” (Berg & Ostry, IMF, 2011)
Growth is not per definition good..
● It often leads to more inequality,
because trickle down does not work
● It exhausts our planet and natural
resources (Tim Jackon (2009):
Prosperity without growth)
The complex dilemma of growth:
● It seems that inequality, at least on the
short and middle run, can only be reduced
by economic growth (fragile middle class)
● Slow growth might cause more inequality,
because it strengthens the power of
employers at the cost of labour unions
● But growth also causes inequality
● Unequal growth can have detrimental
effects on societies and the environment
Inclusive growth must take account
of the circumstances under which
inequality has increased:
● Globalization
● Financialization
● Skill-biased technological change
● Flexibilization of the labour market
What the Western world could do:
● Reform the financial sector in order to
prevent another global financial crisis
● Dismantle tax havens
● Review international investment treaties
and develop a framework for fair global
trade
● And..?
That's all for now..

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EADI Conference 2014 - The Broker panel session - Presentation Sara Murawski

  • 1. Inequality and the post-2015 agenda
  • 2. This panel consists of: ● Sara Murawski (The Broker) ● Marc Vandepitte (Technische School Mechelen) ● Evert-Jan Quak (The Broker) ● David Sogge (Transnational Institute and NOREF)
  • 3. Discuss inequality and the post-2015 agenda at www.thebrokeronline.eu
  • 4. Inequality is a hot topic.. ● International institutions: World Bank, IMF and OECD have changed their discourse.. “The benefits of economic growth DO NOT trickle down automatically. Greater inequality DOES NOT foster social mobility.” (OECD 2012)
  • 5. Inequality is a hot topic.. ● Recent literature & newspapers: Joseph Stiglitz (Price of Inequality, 2012), Paul Krugman (NYT) Martin Wolf (FT), Thomas Piketty with Capital in the 21st century and his famous formula r > g..
  • 6. Inequality is a hot topic.. ● (International) governments: World Economic Forum (2014), Obama's State of the Union, European troika.. “One of the leading economic stories of our time is rising income inequality, and the dark shadow it casts across the global economy.” (Christine Lagarde, IMF)
  • 7. Post-2015 process ● MDG's did not pay a lot of attention to inequality ● High inequality puts MDG's under pressure ● But income inequality does play an important role in the design of the post-2015 agenda: -Open Working Group (OWG) on Sustainable Development Goals (SDG) -Letter from 90 academics to High Level Panel (HLP), calling for 'top-level goal to reduce inequalities'
  • 8. What do the numbers tell us? ● Income inequality measured by the Gini-index, focused on within-countries ● The world’s richest 1% owns 40 % of global wealth, while the bottom half owns merely 1% ● Two thirds of the world population live in countries where income inequality increased between the mid 1990s and the mid-to-late 2000s ● The crisis has worsened inequality
  • 9. Increasing inequality worldwide (source: Conference Board of Canada, 2012):
  • 10. Fragile global middle class ● More than a billion people live in extreme poverty (below $1.25 line) ● In 2010, 2.8 billion people, which is 40% of the world's population, was living on a daily income of $2 - $10 ● Almost 1 billion people live just above the poverty line, between $2 and $3 ● Economists warn that the global middle class is very fragile, and runs the risk of falling below poverty lines due to the slow-down of the global economy
  • 11. Fragile global middle class (source: Financial Times)
  • 12. Relation between inequality and growth: ● Kuznets curve has been severely criticized ● Inequality hinders poverty reduction ● Inequality blocks growth itself “Over longer horizons, reduced inequality and sustained growth may thus be two sides of the same coin.” (Berg & Ostry, IMF, 2011)
  • 13. Growth is not per definition good.. ● It often leads to more inequality, because trickle down does not work ● It exhausts our planet and natural resources (Tim Jackon (2009): Prosperity without growth)
  • 14. The complex dilemma of growth: ● It seems that inequality, at least on the short and middle run, can only be reduced by economic growth (fragile middle class) ● Slow growth might cause more inequality, because it strengthens the power of employers at the cost of labour unions ● But growth also causes inequality ● Unequal growth can have detrimental effects on societies and the environment
  • 15. Inclusive growth must take account of the circumstances under which inequality has increased: ● Globalization ● Financialization ● Skill-biased technological change ● Flexibilization of the labour market
  • 16. What the Western world could do: ● Reform the financial sector in order to prevent another global financial crisis ● Dismantle tax havens ● Review international investment treaties and develop a framework for fair global trade ● And..?
  • 17. That's all for now..