Faculty / School

Faculty of Business Administration (FBA)

Department

Department of Economics

Was this content written or created while at IBA?

Yes

Document Type

Conference Paper

Publication Date

5-15-2018

Author Affiliation

  • Dr. Ishrat Husain is Professor Emeritus at IBA.

Conference Name

Economic and Social Commission of Asia and Pacific (ESCAP)

Conference Location

Bangkok

Conference Dates

May 15, 2018

First Page

1

Last Page

4

Keywords

Income Inequality, Multilateralism, Economic Development, Redistributive Policy

Abstract / Description

I would like to adopt a different approach in my remarks this afternoon than my other panelists. My starting point is that it is the prime responsibility of the national governments to tackle the issues of inequality . I would therefore share with you our present empirical understanding about the relationship between economic growth and inequality. I would then survey the current scene of multilateralism and globalization to infer if this is conducive or helpful to national strategies. First, What are the lessons we have learnt so far about inequality? Unlike Poverty where a lot of theoretical, cross country and country specific empirical evidence shows that by and large rapid growth does result in poverty reduction the literature and evidence about the relationship between growth and income inequality has remained inconclusive. We can find countries such as Brazil which started with high Gini coefficients and was considered after Albert Fishlow’s classic paper as an epitome of high inequality have been successful in reducing inequality under Cardoso and Lula regimes but we also find fairly egalitarian societies such as China and India recording rapid growth but have been hit at the same time by higher inequalities. Both these countries have been successful, China more so, in lifting hundreds of million of poor people out of poverty but the rising trends of dollar billionaires and millionaires whose cumulative incomes exceed the total income of bottom 20 percent of the population are indeed worrisome. . I am also surprised that the most dynamic region in the world i.e. Asia and Pacific has seen the largest increase in the average Gini coefficient in the last twenty five years. South Asia region is additionally characterized by stark gender disparities with low female participation in labour force, limited access to public services and low social status of women. In my view the SDGs should have taken up Inequality as an overarching theme for 2030 like the MDGs had successfully taken up Poverty reduction as the central theme. All other subsidiary goals that made highest contribution towards mitigating inequality should have been given priority in resource allocation and policy reforms. But the flexibility provided to individual countries in the implementation of these goals should still permit focused attention on attaining this particular objective.

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