Reducing the Number of Citizens Being Left Behind

Although incidences of poverty and inequality are greater in developing countries, they are undoubtedly global challenges and their eradication quite rightly, features among the United Nations’ (UN) 2030 sustainable development goals. As the world seeks to navigate these unprecedented times, a major concern is that the COVID-19 pandemic may substantially exacerbate inequality and poverty, both at the global and country levels. In addition to eroding much of the recent gains made in these two areas, it is also feared that the lingering effects of the virus could constrain progress for years to come. According to the World Bank, 10 percent of the world’s population (734 million people) lived in extreme poverty in 2015, compared to 36 percent (1.9 billion people) in 1990. This measure of poverty is based on individuals who live on less than US$1.90 per day. The virus is projected to erase much of the progress made over the last five years, with 40-60 million people expected to fall into extreme poverty in 2020. In terms of how wealth is distributed between the rich and poor, the IMF expects the income gap between the rich and poor to widen further in the wake of COVID-19. This outlook is supported by the agency’s research on the effects of five epidemics, namely SARS (2003), H1N1 (2009), MERS (2012), Ebola (2014) and Zika (2016), which revealed that income inequality increased steadily in the affected regions during the five years after the event.

While this is troubling, it is by no means surprising. After all, the overwhelming majority of low-income earners survive on jobs that are low paying, require little skill and which are normally the first casualties of an economic downturn or crisis. Accordingly, there tends to be a significant level of discontent among these individuals during challenging economic times and no shortage of individuals willing to take advantage of the sentiment. In recent years, we have seen populist ideologies gaining increasing acceptance globally and the politicians that espouse them, taking the reins of power, sometimes by large electoral margins. This has occurred even in countries once believed to be least likely to embrace such principles. The subdued economic conditions that characterised much of the global economy at that time provided fertile ground for the phenomenon to blossom. As job opportunities began to diminish and governments’ fiscal resources became increasingly strained, large corporations, globalisation and capitalism drew more frequent and more intense condemnation. The immigration policy of many countries also came under increased scrutiny, as xenophobia rose to worrying levels, and countries managed their borders more tightly. With current global conditions multiple times more difficult, one wonders, what will be the impact on the global geopolitical landscape.

Encouragingly, crisis is always accompanied by opportunity. On this occasion, we have the opportunity to embrace the spirit of the UN’s 2030 development goals, which simply put, is that in modern society, no one should be left behind. The rest of this note discusses a few ways to enhance initiatives designed to reduce poverty and narrow the wealth gap.

Broadly speaking, the root cause of inequality and poverty is a lack of opportunity or at least, significantly less of it, due to social class, race, gender, disability and geographical location, to name a few. This includes opportunities to learn, practice, work and even play. Most times, the lack of opportunity is quite clear, such as when a qualified person is unable to secure employment. Other times, it is not always easy to recognise, especially by those who do not face the related challenges. For instance, two children could attend the same class in the same school, but one could be at a severe disadvantage because she/he comes from a poverty-stricken home. This child may not have access to all the learning material, their parents may not be able to consistently satisfy the nutritional needs of the household, or basic amenities such as electricity and running water may be beyond the family’s resources. In the context of the current COVID-19 construct, many students throughout the world are now required to participate in class remotely. However, with little or no access to computer equipment and reliable internet service, millions of students, including many here in the Caribbean are at a disadvantage. While it’s impractical to expect a truly level playing field, and though history is replete with examples of people who overcame tremendous challenges to lead hugely successful lives, it is in everyone’s best interest to create more breaks for those at the margins of society. The simple reason for this is that poverty and inequality limit economic development and erode confidence in institutions. The smaller the proportion of individuals living in poverty, the larger will be the consumption stimulus and thus, the rate of economic growth. Further, when there is distrust of institutions and procedures, people tend to engage in activities that may be injurious to society and ultimately themselves. Unfortunately, too many of us believe that it is solely the government’s role to create opportunity for the disadvantaged, when in fact it requires a societal effort and should really be a guiding principle.

The government has to be at the forefront in the battle against inequality and poverty, ensuring that its programmes are adequately supported in terms of fiscal resources, legislation and public awareness. For the greatest efficacy and to conserve resources, such programmes should be appropriately targeted and reviewed regularly. For example, schemes such as free universal tertiary education and fuel subsidies benefit both the rich and poor. A more refined approach will direct scarce resources only to those in need and as such, reduce the state’s fiscal burdens. Care must also be taken to ensure that such initiatives amount to more than just transfers and subsidies. Given the vast needs of the individuals in this group, government would invariably have to engage in such spending, but this should be paired with expenditure on training initiatives to equip the vulnerable with the skills to acquire sustainable jobs or open their own businesses; the age-old teach a man to fish principle. If government forms partnerships with the private sector and non-government organisations, it will be able to enhance the reach of its programmes and contain costs.

The need for a societal effort dictates that the private sector must also play a role in attending to the needs of the vulnerable. Thankfully, over the years, many firms have generously accepted this function. In recent times though, the way the role is viewed has undergone substantial change. Businesses today are increasingly required to be mindful of the impact of their operations on society. More specifically, they are called to be good corporate citizens. As they pursue their objectives, there is growing pressure on firms to act in ways that protect the environment, build the economy and enhance the lives of people in the communities in which they operate. For this reason, many companies have adopted the corporate social responsibility (CSR) philosophy, under which such entities hold themselves socially accountable and are also responsible to stakeholders and the public. The range of activities under CSR programmes can be quite broad, but philanthropy and volunteerism are by far the most popular. In today’s world, established firms are sometimes called to be business mentors to start-ups and potential entrepreneurs. This activity is especially important for the enlargement of commercial activity in developing countries. CSR programmes play an important role in the fight against poverty and inequality and are beneficial to the company, the recipient and society. Businesses that are socially aware and active, generally benefit from a boost in image and employee engagement, as workers normally feel a great sense of pride knowing that their company is having a positive impact on society. Sadly, not all businesses with the necessary wherewithal have embraced the CSR ethos. Public policy initiatives such as government incentives may be required to drastically reduce the number of firms without community outreach programmes. Given the intractability of poverty and inequality, it is important for more of the global business community to join in the efforts to address these ills over the medium to long-term. Having said that, it was indeed encouraging to see a reasonably strong level of philanthropic activity globally during the height of the global lockdown, despite the deleterious effect of the pandemic on business profits.

Social programmes need to be protected and synergised. As mentioned before, social initiatives should be properly targeted to ensure that the persons benefitting are indeed the ones in need. It is also essential to have a clear strategy to advance as many people as possible out of these schemes, by equipping them to be productive members of society. In this regard, there must be a reasonably strong training element. There will, of course be some cases where social support is necessary throughout a person’s life, but for those individuals with the requisite capacity, the aim is for the reliance on support initiatives to be temporary. If this is done, it will significantly boost the benefit of such initiatives to society, since they will be able to look after more people over the long-term and help to improve productivity. Sometimes, to safeguard the viability of the programmes, administrators will have to use tough love. The regular receipt of grants may be a disincentive for some individuals who are otherwise capable, to take the necessary actions to lead successful, financially independent lives. For this reason, it is important to speak truth to fear, slothfulness, inappetence etc.; to constantly monitor progress and ensure that programmes do not move away from their moorings. For instance, it is counter-productive to allow individuals to make careers of what were initially intended to be schemes which provide training and temporary employment.

We are obligated to look after and seek to reduce the number of our brothers and sisters who, for varying reasons, are being left behind economically. To be successful, this requires an all-hands-on-deck mindset and approach, where every institution and every member of society recognises that there is a part to be played by everyone. However, in its leadership role, government is required to create the environment for widespread participation and must take steps to enhance the sustainability and synergy of the collective effort.