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Forum on social equity mobilizes leadership to support policies to promote equity in Latin America


The Inter-American Development Bank has launched a new stage in its Social Equity Forum, which during its first year will focus on promoting the consideration of policies to institutionalize the advancement of equity in Latin America and the Caribbean.


At the end of the last decade 20 percent of the region’s population that was the wealthiest received 60 percent of the income, while the poorest 20 percent received only 3 percent.


Brazil’s former President Fernando Henrique Cardoso emphasized in the inaugural ceremony in Washington, D.C., the evolution of the concept of development from a narrow focus to a broader economic sphere that includes social issues.


Despite the fact that in the past two decades economic growth has not been as fast as during the 1960s and 1970s, social indicators and the quality of life have nevertheless improved over time. He noted that in Brazil, for instance, poverty has dropped from 40 to 32 percent of the population in recent years.


Cardoso said we must counteract those ideas that allege that everything accomplished has made things worse or that action is futile, he said. Important changes in recent years have improved the quality of life while continuing democracy. “Whether or not the glass is half full or half empty is not important – what is important is whether the glass is being filled or whether it is being emptied,” he said.


Cardoso added that equity cannot be dealt with without also including the issue of democracy. Liberty is not enough. There can be liberty without access to rights. Institutions are needed in addition to liberty, so that people have access to rights, union organizations, churches and political parties.


Reform is necessary, he added, as the market does not reduce poverty, and specific programs are necessary. Many external factors have had devastating effects on Latin America, but the region’s incapability of creating sound institutions and managing economic policy has made some problems worse.


Forum on Social Equity


The Social Equity Forum was created by the IDB in 2000 to assemble political leaders, academics, entrepreneurs, representatives of civil society and the media to debate social policies and analyze the best ways to achieve more equitable societies.


The new stage launched on Feb. 27 of this year will be lead by former President of Mexico Miguel de la Madrid and the President of Peru’s Alianza Electoral Unidad Nacional, Lourdes Flores Nano.


“We want to encourage an examination of the reasons why we continue to have a region with wide inequality,” said IDB President Enrique V. Iglesias, commenting on statistics that indicate that 180 million people in Latin America and the Caribbean live in poverty, a drop of only a 10 percent compared with the index a decade earlier.


“These enormous gaps among incomes have very complex causes and consequences that aggravate the economic and social situation,” Iglesias added.


The crisis of the 1980s led to greater consciousness about the region’s social, political and economic distortions. “We have learned an important lesson: humility. Solutions to our social problems are not so easy,” Iglesias noted.


The 1990s were characterized by three great pillars: recuperation of macroeconomic stability, the beginning of the opening of Latin America and its dynamic insertion into the rest of the world; and reform of the state, an unfinished endeavor. There was also progress in the social area, such as a reduction in poverty and improved social indicators, including education, potable water and infant mortality, according to the IDB president.


The decade of reforms also brought us a return to democracy, which has been maintained despite recent political tensions. There are continuing questions among political leaders, public opinion and academics about the validity of certain models and their volatility, and this process has sharpened questioning about social inequities, such as exclusion and unemployment, Iglesias concluded.


The previous president of the Forum and deputy director of the International Monetary Fund, Eduardo Aninat, proposed taking advantage of the technical experience of political leaders, officials and experts to integrate the discussion of social issues in a framework of stability and globalization. He added that the time has come to examine the institutional needs for carrying out equity policies.


Participants in the Forum proposed working to build solid institutions and to transform social policy into a process that goes beyond political parties and governments, avoiding what has been called “schizophrenic cabinets,” designed under the old quantitative concept of development in which the economic branch of the cabinet makes decisions while the social branch is put in charge of the well being of the population.


Also discussed was the need to develop political and entrepreneurial leaders among youth, the builders of future social capital in Latin America, where three out of every five persons are under 30 years old.


The multiple branches of study that were suggested included consultation among sectors regarding policies that promote equity, practical recommendations to improve existing institutions, and activities based on specific institutions, such as the example of health services in Brazil, instead of considering “institutions” in the abstract.


Another proposal was to promote in the region the idea that success depends on effort more than in other factors, which makes escape from poverty possible. Investing in men and women allows the exercise of power for the common good. Institutions don’t build men and women; men and women build institutions.


Participants proposed studying the social achievements of the past 20 years and determining whether or not there has been backsliding and its relationship with economic cycles. Other study proposals concerned the relationship of lack of social progress with economic volatility. Colombia’s Ministry of Social Protection was presented as an example of “new institutionality” in the budget process.


Other suggestions included a redefinition of social equity, indicators, evaluation mechanisms, the role of citizens in the development of institutionality, and lessons learned from the program to reduce the debt burden of heavily indebted poor countries (HIPC) that included the design of a strategy for fighting poverty with the participation of the entire population.


The manager of the IDB’s Department of Sustainable Development, Carlos M. Jarque, said the public policy agenda is extensive and includes critical issues, such as the necessity to improve the effectiveness of tax policies, the size and management of public social expenditure, systems of labor market regulation and the promotion of social protection systems.


Jarque also underscored the importance of creating adequate legal frameworks for the promotion of equity policies and for the definition and execution of programs. He concluded by stressing the importance to sustainable development in overcoming the challenge of equity in Latin America and the Caribbean.


Issues during 2000-2002


The Forum on Social Equity has examined the following issues since it was created:


  • Macroeconomic policy with social responsibility. Macroeconomic policies have important repercussions on equity because of their impact on social spending, labor markets and systems of social protection.
  • The new economy and equity in labor markets. The challenges of the new economy, characterized by technological change and globalization, have important consequences for equity in labor markets.
  • The political economy of social reform. For social reform to have success, policymakers and government officials must take into account constraints and opportunities caused by political realities.
  • Transparency and accountability. These are essential for equitable access to basic social services, justice and political power.


The Social Equity Forum has been possible due to the financial support of the Swedish and Norwegian Governments


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