inclusive economic growth: increasing connectivity, expanding opportunity, and reducing...

7/29/2019 Inclusive Economic Growth: Increasing Connectivity, Expanding Opportunity, and Reducing Vulnerability

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Inclusive Economic Growth: Increasing

Connectivity, Expanding Opportunity,

and Reducing VulnerabilityJohn Podesta February 2013

Tis paper was presened a he January meeing of he U.N. High Level Panel of Eminen

Persons on he Pos-2015 Developmen Agenda. Te composiion of he High Level Panelwas announced by U.N. Secreary General Ban Ki-moon in July 2012. Te High Level

Panel is asked wih providing a writen repor of heir recommendaions for a Pos-2015

Developmen Agenda by June 1, 2013.

Wih broad consensus, paneliss have agreed ha ending exreme povery in our ime

should be he core ene o he pos-2015 global developmen agenda. Tere has been

almos equally broad senimen wihin he panel ha osering susained and inclusive

economic growh, creaing decen jobs, improving living sandards, and addressing

youh unemploymen were underemphasized in he original goals and should be more

prominen in any pos-2015 developmen agenda.

Tere is no silver bulle o ensure rapid, broad, and equiable economic growh ha can

reach he poores o he poor. Indeed, i he ormulaion were so simple, counries a

every range on he economic scale would have already embraced i.

Ta said, we do know ha he only way o reach he 2.5 billion people living on less

han $2 a day is o creae greaer opporuniy or hem while more deeply connecing

hem o he economic, social, and poliical lives o heir counries—and hrough heir

counries o he global economy.

Evolving paterns o growh make clear ha reaching he poor and radiionally margin-

alized populaions in middle-income counries and he many poor who reside in ragile

and conic-aeced saes will require an approach ha moves beyond a simple ocus

on raising naional gross domesic produc or on increasing oreign direc invesmen,

alhough boh remain vial. Wha is needed is an approach ha capures he enabling

1 Center for American Progress | Inclusive Economic Growth: Increasing Connectivity, Expanding Opportunity, and Reducing Vulne



condiions o economic and social developmen and includes a deliberae and acion-

able ocus on inclusive economic growh.

As he global populaion coninues o expand and 40 million more people ener he

global labor orce every year,1 our ask—hrough he pos-2015 developmen agenda—

should be o embrace he bold bu pracical seps ha mus be aken o help ensure ha

every person has he opporuniy o be healhy, o work, and o be couned, and haeveryone has access or “conneciviy” o he inrasrucure, social services, and unda-

menal righs hey need o conribue o developmen and improve heir own lives.

A cenral ocus on economic growh in he pos-2015 agenda can no only rigger sus-

ained increases in average GDP bu can also end exreme povery in our generaion and

subsanially reduce low-income povery. A majoriy o he world’s exreme poor survive

on no income or on less han $1 per day. Expanding he opporuniies or growh o

include hese populaions would enable many counries—working in parnership wih

he inernaional communiy and he privae secor—o make sure ha all o is ciizens

are ree rom he crushing burden o exreme povery. Reaching his ambiious goal willrequire counries o adop he policies and programs ha can lead o susained increases

in naional GDP and o implemen argeed naional sraegies ensuring ha hese

economic opporuniies and benes exend o all ciizens—including subsisence-level

producers, he urban poor, and radiionally marginalized populaions.

In pursui o susained and susainable developmen, he panel mus come ou in srong

suppor o he economic growh as he sronges counerorce o povery, while recog-

nizing ha ending exreme povery in our generaion is he undeniably ambiious goal

ha should be he cornersone o he pos-2015 developmen agenda. I is a powerul,

clear saemen o purpose reecing he will o he poores o he poor, o civil sociey,o member saes, and o an enormous range o parner organizaions and insiuions.

I also underscores he appreciaion ha he end goal o srong economic growh mus

be o realize he benes o broadly increased individual and household incomes and

improved living sandards or he many—no he ew.

o ensure ha our eors ruly simulae inclusive economic growh, we mus increase

GDP. Bu we mus also deliberaely ocus on breaking down he barriers ha prohibi

individuals, amilies, and enire communiies rom connecing o opporuniies wihin

heir counries. Isolaion comes in many orms—wheher hrough geography, ehniciy,

gender discriminaion, or conic—and our ask should be o acor hese hurdles ino

proposed growh sraegies.

Tere appears o be no disagreemen wihin he panel ha our recommendaions

should include a primary emphasis on consolidaing and expanding he gains we have

seen in GDP, paricularly in low-income and a growing number o now-middle-income

counries. We have also observed ha—wih ew excepions—subsanial pockes o




exreme povery persis even in middle- and higher-income counries. Following are

hree acions we should consider ha can propel increased growh and ensure a level o

inclusiviy ha would enable us o arge—and pu an end o—exreme povery.

Increasing connectivity

For susainable economic growh o ourish and bene he poores o he poor, each

person mus be conneced o he engines o growh and he governmen ha regulaes

hem. Full conneciviy means ha a person is able o pursue a broad range o economic

opporuniies and also has access o he inrasrucure, social services, and governmen

insiuions ha are an essenial par o any social compac or developmen success.

Access to quality educational and health care systems

For ciizens o ake advanage o economic opporuniies, hey mus be able o achievea leas minimum sandards o educaion and healh. Wih an ambiious eor o pro-

moe educaion—such as achieving universal youh lieracy and numeracy by 2030—

he pos-2015 developmen agenda can ocus on angible, qualiy-based oucomes.

(Tere are numerous ways o rack and encourage educaional atainmen; our ocus

here, and in oher areas, should be on no jus he quaniy bu also he qualiy o ou-

comes and on he abiliy o all ciizens o access services such as basic educaion.)

Similarly, ciizens mus be able o access a healh care sysem ha enables hem o enjoy a

healhy lie ree rom he ear o a healh crisis ha can undermine heir economic prog-

ress. As in he case o educaion, we should ocus here on he access o basic healh servicesand emergency care, and paricularly on he availabiliy o reproducive and maernal

healh services, nuriional suppor and care, and early childhood inervenions ha we

know have he greaes impac on developmen, as well as on he qualiy o oucomes.

Access to infrastructure

I will also be necessary or naions, he privae secor, and he inernaional communiy

o ensure universal access o modern energy, ransporaion, and elecommunicaion and

nancial services. Quie simply, his aspec o economic growh is abou physically con-

necing people o he economic opporuniies and sysems ha will allow hem o hrive.

Eecive inrasrucure sysems provide he backbone or economic growh by enabling

innovaion, business developmen, rade, invesmen, and, mos imporanly, scale. Bu

providing broad-based access o modern susainable energy, ransporaion, and nan-




cial and communicaion services will no doub be a all order in many counries because

i will necessiae major capial invesmens in such inrasrucure.

Te imporance o his goal—and o he inernaional communiy ariculaing i as a

prioriy—canno, however, be oversaed. Reliable susainable energy, exensive roads,

and expansive communicaions coverage allow local businesses o operae compeiively

and build invesor condence. I will ake a concered eor o public and privae inves-men o reduce he global inrasrucure deci and bring modern energy, ranspora-

ion, and communicaion services o all—including he poores o he poor—bu i is

a crucial sep in promoing susainable economic growh. I will also be vial o ensure

ha inrasrucure is expanded in an environmenally sensiive and susainable way, and

ha i does no undercu oher key aspecs o he developmen agenda, paricularly as

hey relae o our shared environmen.

Access to effective and transparent governance

One o he mos imporan connecions ha can encourage economic growh is ha o

a ciizen o his or her governmen. Ciizens should be able o expec heir governmens

o creae he condiions needed or broad-based economic growh. When people can

access a governmen’s decisions and regulaions aecing economic growh, hey can

inorm heir own acions and hold governmens accounable. Te poliical inclusion o

all groups, especially he poores o he poor, helps o ensure ha heir economic per-

specives, realiies, and ineress are undersood and aced upon by governmens.

A crucial plaorm or connecing ciizens o heir governmens is hrough a counry’s

budge. Naional budges clearly reveal a counry’s prioriies and acions, as well as herade-os ha naions and governmens mus make. As such, hey should be publi-

cally accessible o all. Budge ransparency is also criical o economic growh because

i promoes accounabiliy, helps o reduce corrupion, and can inspire condence in

invesmens and he decisions ha regulae hose invesmens. Budge ransparency

addiionally allows public ocials and he ciizenry o deermine wheher he ruis o

susained economic growh are being shared.

Crowding in the private sector

Anoher necessary elemen o srong economic growh is connecing wih and inceniv-

izing he privae secor. From enrepreneurs and small enerprises o large inrasrucure

projecs, he capial and experise o he privae secor is essenial in realizing he goal

o ending exreme povery in our generaion. As limied governmen resources are

sreched o mee increasing demands, i will all o he privae secor o kick-sar many

o he engines o growh across he globe.




Te quesion, hen, is no around he necessiy o he privae secor bu in how i should

gure in he pos-2015 developmen agenda. As wih many o hese issues, urher discus-

sion is warraned abou how he privae secor migh ino any new se o goals. We

should be mindul, however, o creaing he righ incenive srucures o encourage and

aciliae a robus privae-secor role in susaining economic growh and encouraging eec-

ive public-privae parnerships in every aspec o he pos-2015 agenda. I will be incum-

ben upon us, as well, o hink o innovaive ways o align he developmen moives o heU.N. Millennium Developmen Goals wih he pro moives o businesses. I we seek o

engender a new arrangemen ha goes beyond corporae social responsibiliy o “shared

value,” we can indelibly link he developmen agenda o he expanding privae secor,

hereby ensuring ha economic gains are ar reaching and susainable.

Expanding opportunity

Even as ciizens are conneced o he enabling ools and condiions or economic

growh, hey mus also have opporuniies or advancemen.

Creating employment opportunities

I is impossible o discuss economic growh wihou also discussing he need or

increased employmen opporuniies. Tere have been calls or job creaion, a righ o

decen work or all, and employmen arges or underserved-bu-growing secors o he

workorce, including women and youh. Te panel has ye o deermine exacly i and

how i wishes o address employmen opporuniies as a uncion o economic growh,

bu his conversaion mus happen.

Te connecions beween unemploymen levels and economic sagnaion (or worse,

decline) are well-documened, bu, again, here are no easy answers when i comes o

nururing susained employmen growh. I remains o be seen how we will choose o

dene, measure, or even include employmen in any pos-2015 developmen agenda.

Employmen, especially or people who live and work ouside o he ormal economic

secor, provides he bes means o ackling exreme povery. Among some marginalized

populaions, however, he causes o heir marginalizaion—discriminaion, or exam-

ple—preclude he atainmen o good jobs and/or increased incomes and requenly

drive hem o remain in he inormal secor. Several pracical seps would go ar in

economically empowering radiionally marginalized populaions and grealy enhancing

prospecs or growh a he naional level.




Identity

Ensuring ha every person is aorded a regisered ideniy—wheher hrough a birh

cericae, naional idenicaion, or anoher orm—opens a wealh o opporuniies

currenly unavailable o hose unknown and unrecorded by heir counries.

A naional ideniy can make a number o economic opporuniies ar more acces-sible. I is dicul—and in some cases impossible—o open a bank accoun or access

money services wihou some orm o idenicaion. Tose seeking o lif hemselves

ou o povery are hereore ofen lef ou o ormal economic insiuions due o lack

o idenicaion, denying hem he opporuniy o proec and grow heir incomes and

denying governmens he opporuniy o coun and build upon he economic success o

heir ciizenry. Credi, a key ingredien in growing businesses, is similarly hard o access

wihou idenicaion. Idenicaion can enable he correc regisraion and inheriance

o asses, land, and resources, as parens seek o leave heir children more and beter

economic opporuniies.

Poliically, a naional ideniy gives ciizens he opporuniy o have heir voices heard

and couned. Te mos obvious bene is he opporuniy o voe and deermine

naional leadership and prioriies. In many counries, here are also a number o gov-

ernmen benes o idenicaion—including social saey nes, welare sysems, or

cash-ranser opporuniies—ha can accrue o hose ciizens in need. o access hese

economic and social opporuniies, however, one mus possess naional idenicaion.

Ensuring a universal righ o a naional ideniy will help level he playing eld or he

marginalized and poores o he poor. Tere is also ample reason o believe ha achieving

he universal righ o a naional ideniy would also have many benecial addiional eecssuch as promoing sabiliy and conic resoluion in conic-aeced and ragile saes.

Modern and effective land tenure and title

Anoher crucial elemen in providing economic opporuniy or he poores o he poor

is secure land-enure propery righs. An overwhelming majoriy o he world’s poor

rely on agriculure or heir incomes, and many o hese agriculural workers are women.

Ye in many counries, radiional and ofen-inequiable land-enure sysems mean ha

some agriculural workers canno own heir land, nor can hey inheri or bequeah i.

Many counries sill operae on he basis o muliple and diverse land-enure sysems—

each rooed in a paricular culure, radiion, or geography—bu wih he eec ha land

righs vary rom region o region wihin a given counry. Changing land-enure sysems

ofen enails high-level poliics and can rigger local conic, bu i may be possible o a

leas esablish a sandard on land righs and iles ha enables poor armers o make he

maximum use o land or produciviy.




Given he demographics o global povery and he ac ha a growing number o he

world’s poores ciizens now or will soon reside in urban areas, propery righs—and

in paricular iles—also impac he poenial o poor people o produce goods, secure

credi, and rade. Here again, even he atainmen o basic sandards on urban land

iling could generae signican gains by providing a pahway or he exreme poor o

he ormal economic secor and he ools available here.

Te Food and Agriculure Organizaion’s Volunary Guidelines on Responsible

Governance o enure, issued in 2012,2 provide an excellen saring poin or he

panel’s work. In his day and age, and in such a highly compeiive global economy,

we mus move pas he idea ha someone canno hold or inheri land simply because

o heir gender, ehniciy, or ideniy. Broad and secure righs o land, coupled wih

a naional legal ideniy ha makes ile accrual and ranser possible, will lead o

increased household incomes among he poores o he poor. Crucially, hese benes

could accrue o women and men equally, correcing he severe dispariy in land ile

ha currenly exiss beween men and women. Each counry would no doub imple-

men land-enure reorms mos appropriae o heir local needs and radiions, ensuringha he economic opporuniies rom land ownership and securiy lead o susainable

growh and prosperiy.

Reducing vulnerability

Finally, we mus ake ino accoun ha i is he world’s poores who are he mos vulner-

able o inernal and exernal shocks—or example, ucuaions in weaher, ood, or

oher commodiy price increases, climae change, and local or major conic. Even i

hey are able o increase heir incomes, heir economic coping mechanisms are ew andar beween. As we saw during he 2007–2008 spike in world ood prices, a major shif

in global markes can plunge as many as 100 million people ino povery.3

In order or he gains ha could be atained hrough he above acions o be susained

and or vulnerabiliy o be reduced, here are wo rends o which we should ake

advanage. Te rs is he concep o resilience and he specic seps required o ensure

ha people and communiies are able o wihsand—or a leas rebound rom—exer-

nal shocks. For he poores o he poor, his may mean building on a growing body o

work in he humaniarian relie eld over he pas several years—including, or example,

reaing malnourished children by boh providing ood and by using he high-nurien

producs ha address boh hunger and brain developmen, or aking deliberae seps o

ensure ha local markes do no collapse in imes o acue ood shorages by providing

vouchers raher han ood aid.

Te second is o build on he successes o a growing number o counries o deploy

social saey nes, cash ransers, and oher programs ha can reduce a poor amily’s





cash oulay and, imporanly, provide access o criical services, including healh and

educaion. Te opporuniy here is ha a signican number o middle- and low-income

counries have aken he lead in his area and have proven ha hese programs yield

immediae benes, as well as long-erm developmenal gains. Te challenge is ha

many social saey ne programs are poorly argeed and eiher provide oo much o

hose less in need and no enough o hose who need suppor, and/or hey overlook he

mos marginalized and disenranchised populaions. argeing hese programs o hepoor could yield boh greaer and aser progress oward eliminaing exreme povery

while also reeing up poorly argeed resources or oher purposes.

Conclusion

Susainable economic growh is no simply abou increasing he size o naional econo-

mies bu abou shaping enduring sysems ha respec he righs o individuals and give

hem he ools hey need o help lif hemselves ou o povery now and orever. Te

pos-2015 agenda oers an imporan opporuniy o move beyond simply alking abouhe imporance o growh, decen jobs, and reduced inequaliy and o sar puting in

place he pracical measures and mechanisms ha make such advancemens possible.

As wih all pars o he pos-2015 agenda, he economic porion o our work is deeply

inerconneced wih our eors in oher areas. We will no achieve our economic growh

aims i we all shor in educaion, public healh, he environmen, and in promoing

peace and securiy. We mus ideniy and address hose challenges ha si mos cenrally

in he web o social and economic developmen in ways ha move beyond he ofen

simplisic Norh-Souh dichoomy o he original Millennium Developmen Goals.

John Podesa is he Chair of he Cener for American Progress.

Endnotes

1 International Labour Organization, “Global Employment Trends 2012: Preventing a Deeper Jobs Crisis” (2012).

2 Food and Agriculture Organization of the United Nations,“Voluntary Guidelines on the Responsible Governanceof Tenure of Land, Fisheries and Forests in the Context of National Food Security” (2012).

3 The World Bank, “Global Monitoring Report 2012: FoodPrices, Nutrition, and the Millennium Development Goals”(2012).

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