Features

Beyond 2015: tackling inequality to help lift more people out of poverty

15 September 2014
ITC News
ITC advocates for a stronger focus on SME competitiveness in the post-2015 development agenda, with a particular focus on the three Es: entrepreneurship for employment and economic growth, while ensuring that inequalities are addressed.

We believe that the central challenge we face today is to ensure that glo balization becomes a positive force for all the world’s people.’ These were the words of heads of state enshrined in the Mil lennium Declaration, unanimously adopted at the United Nations General Assembly in 2000.

The ambition they represented was elaborated in the eight Millennium Devel opment Goals (MDGs) that have guided the development community towards reach ing agreed targets by 2015. As progress in achieving the MDGs has accelerated in re cent years, parallel consultations have been taking place to design the next framework: the post-2015 development agenda. How will this programme successfully build upon MDG successes and move them forward to create a true global transformation? To do so there is a need to firmly embed economic and trade in the new agenda.

Globalization and economic develop ment are intricately linked. The fact that the international community achieved the first target under the MDGs five years ahead of the 2015 target date is testimony to this. Under the broader goal to ‘Eradicate ex treme poverty and hunger’ (MDG 1) the tar get set in 2000 was to ‘reduce extreme pov erty rates by half.’ The global poverty rate at US$ 1.25 a day fell to less than half the 1990 rate by 2010: 700 million fewer peo ple lived in extreme poverty than in 1990. Rapid economic development is largely at tributable to gains from trade, which con tributed to raising average incomes and slashed poverty rates. Within this period was the rise of the BRICS bloc – Brazil, Rus sia, India, China and South Africa – which played a significant role in raising measure ments of global well-being.

It is not the first time trade has been central in tackling poverty: export earn ings were critical in the sustained develop ment in East Asia and Europe in the 20th century. What is different this time around is the growing awareness of inequality – between countries, between men and women, and between those living in urban and rural areas. To reduce this growing in equality there is therefore a need to in the next agenda to better capture quantitative and qualitative data. Doing so will allow for strengthened analyses to better meas ure progress made towards ensuring that globalization becomes a real force for good for all.

THE THREE Es

Economic growth, while a worthy tar get, falls short of adequately dealing with the immediate concern of job creation as a source of income generation. This is why the International Trade Centre (ITC) focuses on improving the competitiveness of small and medium-sized enterprises (SMEs). In developed and developing countries, SMEs generate approximately 80% of jobs. Exam ining the constraints to success that SMEs face will allow the international community to proactively tackle them and foster entre preneurship, generate jobs and contribute to economic growth. Whereas the MDGs con tained no reference to entrepreneurship at all, there is growing consensus that economic growth has to play a strong central role in the new set of goals. ITC, for example, has been advocating a stronger focus on SME com petitiveness in the post-2015 development agenda, with a particular focus on the three Es: entrepreneurship for employment and economic growth.

MORE STAKEHOLDERS

That there is a sea-change in awareness of the contribution economic development makes to poverty eradication is evident in the proposed list of objectives and targets developed by the Open Working Group of the General Assembly on Sustainable Devel opment Goals.

In the post-2015 agenda, the social jus tice pillar, which was central to the MDGs to achieve sustainable development, has been complemented by parallel pillars of economic growth and environmental stew ardship.

While it was the UN member states rep resented in the Open Working Group that deliberated over 13 sessions to arrive at 17 goals and 212 targets, much input was pro vided by civil society and the private sector. There was also active substantive support from 60 UN entities constituting a technical- support team.

As a result, the proposed new agenda is much wider in scope, noting that the goals and targets are ‘global in nature and uni versally applicable’. This is a leap forward from the MDGs, where developing coun tries reported on progress and developed countries headlined how they helped. The post-2015 framework, meanwhile, proposes universally applicable goals and targets and universal reporting by both developing and developed countries. In effect this would al low each government to set its own targets guided by the global level of ambition while taking into account national circumstances. This flexibility suggests that trade groups, for example, would do well to mobilize resources to ensure that economic aspects are well integrated in national targets and plans to meet those targets, with a view to foster ing entrepreneurship for employment and economic growth.

At every stage we need to close the loop and capture the impact on poverty. For us to end poverty, in all its forms everywhere, we now know economic growth is not enough. We need to take steps to ensure inequali ties are addressed. In trade, we need to go beyond aggregate export earnings to exam ine the hands into which those earnings and incomes fall and ask ourselves who benefits. We need to improve our indicators to cap ture: is it men or women? At what stage of the value chain? When we have these an swers we will unite two central concerns: that globalization becomes a positive force for all the world’s people and that it is har nessed to eradicate poverty.