Promoting Inclusive Growth In the Sustainable Development Framework

The International Labour Organization estimates that across the world, over 202 million people are unemployed. Although the developed world has witnessed a recent rise in unemployment in the wake of the global financial crisis, the vast majority of the unemployed are in Southeast Asia and Africa. Not only are young people disproportionately affected by high levels of global employment, but over64% of working age people are working or looking for work.

Those that have jobs might not be that much better off. As income inequality grows across the world, the working poor population also continues to grow.

In the last few years, the United States, one of the most unequal advanced economies, has engaged in a public dialogue among policymakers and the media regarding the widening wealth gap between the rich and poor. As millions across the country struggle to make ends meet, the richest 1% continue to grow richer. While this has sparked bitter commentary about the unfair advantages of privilege from one side and the need to end hand-outs from others, it is clear that across the world, we need to institute mechanisms to promote inclusive growth. This is not a phenomenon solely limited to the developing world.  

Nowhere is this more clear right now than in Brazil, a BRIC nation and one of the most rapidly growing economies, but a place where the newfound wealth is largely concentrated in the hands of the country’s elite, which is primarily of European descent. Right now, in 25+ cities, people are protesting against excessive FIFA World Cup spending.

The 2013 Global Peace Index analyzed the political climates of societies across the world and concluded that conflict and violence are on the rise. Fearon and Laitin (2003) hypothesize that economic inequality and poverty are drivers of conflict. If we want a safer and more peaceful world, inclusive growth must figure as a priority in the national agendas of all economies.

As the United Nations Development Programme states, “inclusive growth is both an outcome and a process.” It is the product of participation that fosters productivity and a system that allows people to share in society’s benefits. Societies in which there is participation without benefit-sharing create inequitable and unjust growth. Sharing benefits without participation creates an undesirable welfare state, the antithesis of productivity.

Creating inclusive growth is also imperative in order to avoid financial crises like 2008. To ensure lasting prosperity and economic security, we must utilize and cultivate all of society’s social and economic resources to create competitive economies. This approach requires governments to keep an eye on long-term development solutions instead of the common focus on short-term panaceas that do not address root structural problems.

We cannot only create economic growth; we must also create sustainable growth. This goal can only be realized if the potential sources of growth are expanding. In many developing countries, an over-reliance on lucrative extractive industries leads to a focus on sectors like mining at the expense of others sectors like manufacturing and agriculture. Diversification is a key step in expanding employment opportunities.

Growing unemployment trends worldwide compel necessitate the creation of more mechanisms to increase the pace of growth and the range of opportunities. One of the first steps towards accomplishing such a lofty task is establish a competitive marketplace. The World Economic Forum’s Global Competitiveness Index framework suggests 12 factors that might encourage such an environment like institutions, infrastructure, health and primary education, higher education and training, technological readiness, business sophistication and innovation.

From these criteria, it is also clear that addressing traditional preoccupations of the development field - governance and social services - are a prerequisite for any growth.

That being said, transforming governments and creating prosperity is obviously easier said than done, but as we pursue a better world, mechanisms to produce inclusive growth need to be a greater factor in discussion.

Akinyi OchiengComment