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Social and Political Exclusion: The Challenge of Inequality in Latin America
Chatham House Conference: Speech by International Development Minister Shahid Malik
05 November 2007
Good Morning, Ladies and Gentlemen.
It is an honour and a pleasure to be here this morning, among some of the great UK experts on Latin America. I am particularly honoured to meet the former Colombian President, Excellency César Gaviria.
Personally, I have not yet had the pleasure of visiting the region, but I hope to do so soon. However, I do have a deep appreciation for the fact that the biggest challenge for the region is overcoming inequality, both in times of good growth and bad. Today, one in seven people in Latin America live in extreme poverty. This is despite the fact that in recent years, the growth record of the region as a whole has been quite good. Access to services is also highly unequal. In Bolivia under-5 mortality rates for the poorest 20% of the population are 105 per 1,000 whilst for the richest 20% of the population, the rate is 32 per 1,000. Much of that inequality is driven by social and political exclusion, which in turn can hinder economic growth and widen inequalities.
Northern Ireland experience
In 1999, I had the honour of working in the Northern Ireland Equality Commission, after the Good Friday Agreement. This was a difficult time in the province’s history. I came across many examples of those who struggled to get a decent job because their religion was more important than their qualifications or skills, or because they came from the wrong neighbourhood. Access to a hospital or a GP surgery made difficult because people were afraid to go out at night. In Northern Ireland, this kind of exclusion proved a drag on growth. The private sector didn’t want to invest, there were fewer jobs to go around, and so inequalities became more and more deep-rooted. Fortunately, Northern Ireland has turned a corner. When visiting there recently, a taxi driver explained to me that peace had brought a reduction in stress levels, which improved everyone’s health and general well-being. This in turn improved people’s prosperity, and further reduced stress levels. Because of the progress that has been made on social exclusion and violence, the investment climate has improved, and the province has seen unprecedented growth, and importantly, job creation. It is important to work on both peace and stability, and prosperity and social justice at the same time. Sometimes political challenges can blinker people’s views of development challenges.
Challenges in Latin America
The challenges for poor and excluded peoples in Latin America are not dissimilar. For the young gang member in a Sao Paolo favela who cannot get a job, for the indigenous campesina on the Caribbean Coast of Nicaragua who can’t sell her produce because there’s no road to the market, and for the little girl in the Peruvian Andes who can’t go to school because her mother couldn’t afford the journey to get her a birth certificate. In Bolivia, disabled people are almost entirely excluded from economic life due to stigma and discrimination. In Brazil, urban women’s earnings is only 65% that of men in the same sectors. Their stories are all indicative of how social exclusion can slow down economic growth. It also shows that regardless of how well the economy is doing, certain people get locked into a poverty trap, simply because of who they are, where they live, or what language they speak.
These challenges also exist in the UK. There are significant wage differentials between men and women. Women’s parliamentary representation is limited to 120 female MP’s out of a total of 646. It is my belief that if we can increase womens’ representation in the House of Commons to 50% we can significantly improve the quality of debate that happens in the House.
Improving the business environment
However, we do know that it is possible to help people overcome the constraints that keep them in these social exclusion ‘traps’ and contribute to, and benefit from, economic growth. Let me give you an example. In the Caribbean Coast of Nicaragua, it takes cocoa producers 2 days to get their produce as far as the capital Managua by boat. That’s before they even think about exporting! With the support of an Export Association and DFID, they have managed to access export markets and are now selling their Fair Trade cocoa to Austria. But more importantly, the previously excluded producers of the Caribbean coast have, for the first time, been able to contribute to the development of the cocoa sector, and have been able to lobby for smarter investment in infrastructure in their region. Now they can get their voices heard they can address all kinds of wider development issues that affect them.
DFID: Promoting growth in Latin America
In Brazil, a combination of improved wages in some sectors, and cleverly targeted conditional cash transfer programmes, has brought about an encouraging improvement in inequality. In Brazil, the incomes of the poorest tenth of the population have been growing at 8% a year - eight times faster than the average for the population as a whole. In the last 5 years, Brazil seems to be beginning to reverse an entrenched inequality that had persisted for decades. DFID is working closely with the Brazilian Government to explore the reasons for this change in more detail, so that they can continue this virtuous circle, and explore its relevance for other highly unequal countries.
I expect that today’s discussions will be helpful in unpacking the complex relationship between economic growth, income inequality, and exclusion. In DFID we are conscious that Latin America has much to teach other regions of the world grappling with these challenges and I look forward to some of the recommendations of the conference.
Political will vital for poverty reduction
I leave you with these thoughts. Politicians and civil society leadership can deliver change. Where there is a political will, there is a political way. In the debate on social exclusion, I want to debunk the myth of tolerance. Nobody wants to be ‘tolerated’- it’s a concept that’s fickle and skin-deep. Society should not be about tolerance, it should be about mutual acceptance. Sometimes it can seem like we won’t make progress, but there are experiences that give us hope. There is light at the end of the tunnel.
I wish you a successful meeting.
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