Presentation on theme: "Growth with Equity: Trends and Challenges in the ECE Region Ján Kubiš"— Presentation transcript:
1Growth with Equity: Trends and Challenges in the ECE Region Ján Kubiš UNITED NATIONSECONOMIC COMMISSION FOR EUROPEGrowth with Equity:Trends and Challenges in the ECE RegionJán KubišUNECE EXECUTIVE SECRETARYNew York3 November 20101
2Long-run Trends in Inequality Over the last two decades inequality has been increasing throughout much of the worldThis has been true in the three regions of the ECE – North America, Western Europe and the European Emerging Economies of East, Central, and Southeast Europe, the Caucasus, and Central AsiaThis has been due to changes in technology, globalization and government policyInequality has several dimensions including: the overall income distribution, by gender, ethnic groups, by geographical regions, and intergenerationalAlthough inequality has increased, in the ECE the poorest have been generally protected
3Inequality in the ECE Region Despite the trend towards higher inequality, the ECE region still has less inequality than most other regions of the worldInequality in the US is generally higher than in Western EuropeInequality in the UK and continental Europe is higher than in the Nordic economiesThe Nordic economies are generally considered as being the most successful economies in the world in terms of achieving equity with growthInequality in the European Emerging economies varies considerably
4Government Policy and Equity There are two competing social models in the ECEA “free market or American” model which emphasizes equality of opportunity, market provision of services, limited labor market regulation, and a safety net limited to the poorestA “European or social” model which emphasizes social cohesion, equality of outcomes, universal provision of health, education and other public services, labor market regulation, and generous social transfersOver the last two decades there has been a move from the European model to the American model under the belief that this will promote faster economic growthHow successful this transition has been in terms of increasing growth is debatable, but it has resulted in a general increase in inequality
5Source: Eurostat, OECD Social and Welfare Statistics.
7Inequality in the Transition Economies With the economic collapse in the transition economies in the early 1990s, inequality increased significantly and social and health indicators declined significantlyThe initial increases in inequality were largest in the most negatively impacted economies of the CIS with more moderate increases in the new EU member statesSince the late 1990s until 2008 sustained economic growth allowed the increases in inequality in the CIS to be partially reversedNevertheless large disparities continue to persist in many of the transition economies and many health and social indicators are inadequate
8Gini Index in the European Emerging Economies A larger index number means higher inequality
10Major Challenges in Improving Equity in the Transition Economies Promoting equity requires a strong, efficient government while governmental institutions in many of the transition economies are weak and inefficientIt is difficult to provide social protection to those working in the informal sector and living in informal settlements and these groups are often quite largeNatural resource economies often do not have a production structure which provides large numbers of stable well-paid jobsHowever, resource-rich economies do provide governments with revenues that can be used to finance public services and social transfers; the sustainability of this depends on high oil priceMigrant populations are often poor and receive limited social protections and benefits
11The Importance of Perceived Fairness in Assessing Equity How a society views the inequities within it can be as important as the actual level of the inequitiesFor example, although income inequality is higher in the US than Western Europe, it is generally viewed by the US population as less of a problem than in EuropeAlthough income inequality is not particularly high in many of the transition economies compared to other emerging economies, because of cultural beliefs developed under Communism, the sense of unfairness is quite high in the transition economies
12The Impact of the Financial Crisis on Equity The ECE region was the hardest hit region in the world; most economies other than those in Central Asia experienced negative growth in 2009It will be 2011 before most economies return to their 2008 levels of GDP; unemployment may not fall to 2008 levels until 2013 or beyondAs a result poverty has increased in most economies and social and health indicators have declinedAchieving a number of the MDGs now appears problematicThe need for fiscal retrenchment throughout the region means that social programs will have to be cut back for years to come
13Improving Gender Equality Progress in most ECE countries has been achieved in:Women’s participation in the labour marketWomen’s political participation at local levelsNew and strengthened legislation for gender equalityInstitutional mechanisms on gender equality and women’s empowermentKey challenges for gender equality remain in the following areas:The gap between legislation and implementationDecent work for women and measures to counteract labour market segregationThe gender pay gapThe situation of migrant women and women belonging to minority groupsThe persistence of gender stereotypes, especially in media and educationInsufficient availability of sex-disaggregated data and gender-sensitive indicators
14Gender discrimination in the labour market Gender pay gap by subregion, 2008 or latest available year (per cent)5101520253035404550GEOAZETJKARMRUSKAZKGZBLRUKRMDAALBMKDHRVSRBTURESTCZESVKLTUPOLBGRLVAROMHUNSVNSource: UNECE Gender Database.
15Ethnic and Geographical Inequality Minority groups in many of the ECE economies often have significantly higher levels of poverty and face other forms of social exclusionDicrimination often exists even when there is no government policy against minoritiesDifferences between ethnic groups have often led to conflictAffirmative action for minorities may be effective if properly implementedActive labor market policies and targeted educational programs have been effectiveIncome differences across geographical sub-regions within countries are often quite largePoverty is usually much higher in rural areasRegional development strategies have often been successful in addressing regional disparities
18Intergenerational Equity Intergenerational equity is often considered to be a major defect of democratic societies since future generations do not have a voteThere are a number of intergenerational issues of major importance for the ECE regionProvision and financing of age-related pensions and health careAll of the ECE economies except for those in Central Asia face a demographic aging problemAlthough provision of pensions is well-developed their financing has not been adequately addressedExcessive carbon emissions and the resulting climate change may be the result of an excessive discounting of the interests of future generations
19Policy Directions for Growth with Equity Integrated policy frameworkBalance between macroeconomic, structural and social policiesSynergies between growth, employment, improved education and healthcare, and environmental sustainabilityGender equality policiesCross-cutting effects on all social sectorsReview of fiscal policiesIncome redistribution and fiscal space for social protectionBetter data on disadvantaged population groupsEssential for monitoring the impact of pro-poor policies