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Tale til 'Public Dialogue meeting on Addressing Inequalities'

Udviklingsministerens tale ved åbningen af ’Public Dialogue meeting on Addressing Inequalities’, den 18. februar 2013, i forbindelse med Ulighedskonferencen.

Welcome to Copenhagen. Welcome to the Public Dialogue Meeting on Addressing Inequalities in the Post-2015 Development Agenda. It is very encouraging to see the overwhelming interest in participating in this dialogue meeting and very good to have all of you here. Let me also extend a warm welcome to everyone who is joining online.

On behalf of the Danish government, I am very pleased to co-host this conference as part of the global thematic consultation on Inequalities. I would like to extend my sincere appreciation to our co-host Ghana and not least UNICEF and UNWOMEN, who have organised the consultation. I would also like to thank the Advisory Group for their valuable inputs. The consultation has resulted in a synthesis report including recommendations for addressing inequalities in the future development agenda. The report is available here today and reflects the broad spectrum of inputs and ideas that have been presented. The vibrant and lively debate is very encouraging and I look forward to the discussions today.

Why a consultation on inequality? Inequalities are a key challenge to human development and addressing it is a precondition for progress and a sustainable future. The Millennium Development Goals have made a significant and impressive contribution to addressing a number of critical development challenges – not least providing social progress and lifting millions out of poverty. However, significant gaps remain. Social exclusion and inequalities have not been sufficiently addressed. The consequence is clear – over the past decade, we have witnessed growing inequalities both within many countries as well as between countries. More than 1.3 billion people still live in extreme poverty. This is not acceptable and has to be addressed as part of the future development agenda.

Key questions that the conference will take on today are why inequalities matter? What are the factors that drive and sustain them? And what are effective ways forward to address Inequalities?

When discussing the challenge of inequality it is important to remember that inequality is closely tied to poverty and like poverty, it is a multidimensional challenge with social, economic, political and environmental dimensions. This highlights the need for a holistic approach to poverty eradication and sustainable development. Too often we have tried to remove one type of inequality only to see people being blocked by other types of inequality and discriminiation. Tackling inqualities is not done by a clipse with your fingers. There is a need for profound changes in politics and economics. In culture and cooperation. In trust and tolerance.

The effects of inequalities are very real and constitute a heavy burden in the everyday life of millions of our fellow citizens, who experience discrimination and are pushed to the margins of society.  Unfortunately, marginalisation and exclusion often affects the poorest and most vulnerable people the most, including children, women, indigenous people, refugees and internally displaced, disabled and religious minorities, just as people are discriminated against on the basis of gender and sexual orientation. And often they are kept in an iron grip by longstanding structures and power relations in our societies.

During my travels, I have had the opportunity to talk to youth in different parts of the world. A young indigenous man in Bolivia and a young girl in rural Mozambique share the same dreams as young people here in Denmark and everywhere: An education, a good job and a family. The dreams are the same, but the opportunities to fulfil them sadly are not. All people have the right to a better life with equal opportunities, lives in dignity and decency. And in obtaining this human rights are crucial!

Human rights must form the backbone in our fight against poverty, inequalities and discrimination in all its dimensions. Respecting human rights and fighting discrimination is essential for each and every individual - but it is just as important for building strong and inclusive societies based on equity and participation. Discrimination excludes individuals from fulfilling their dreams and realising their full potential and blocks a society from prosperity.

The human rights framework offers a comprehensive universal platform on which to address inequalities. Human rights have a strong potential to ensure redistribution of both wealth and power. Therefore I believe that it is crucial to ensure a closer link with human rights in a future development framework beyond 2015. The human rights framework should inspire both our future goals and also inspire our path to get there. This can be done by building on and integrating core principles of universality, non-discrimination, participation and accountability.

Adressing inequality is indeed a multidimensional challenge and there is no magic silver bullet, but history tells us it can be done. And both history and recent research also tells us that if inequalities are addressed it can create stronger and richer societies. Increasing equality can contribute to economic growth.

This is indeed good news. For many years, the conventional wisdom among leading economist was been the exact opposite: A certain level of inequality was necessary to foster economic growth. It gave the wealthy better possibilities of making investments and provided incentives for all to make an extra effort. In my view, this assumption is questionable – at best. In reality, it is not only the wealthy that have savings to invest. In countries like China even poor farmers have high saving rates and are investing in local production. And the argument that inequality creates incentives to work harder is far from reality in many places – if realising your dream becomes too distant, too difficult, it may discourage people instead.

In fact, it seems that increased equality is creating more dynamics and contributing to economic growth. Why? The primary redistribution mechanism in many countries is investments in education and health. It makes people both smarter and healthier and thereby increases social capital to the benefit of companies and growth. Increased equity also increases social cohesion and reduces conflicts in society. A more equitable society can give poor people hope for a better future and a real possibility of participating in the creation of wealth and prosperity. More equitable societies can make better use of capital and spur innovation.

Another key question is of course how to achieve greater equality in opportunities and outcomes?
Removing discriminatory barriers that block girls and women, young people, poor people or marginalised groups to realise their full potential is crucial. Way to often marginalised people and groups stumble into rules and regulations, obstacles or oppression, barriers and blockages in their aspiration for a better life. These barriers must be removed. One by one. All by all.

The next step is to increase investments in health and education as key elements in fighting inequality. Economists and experience shows us this is very effective in removing inequalities. This challenge is still there in Denmark, it is there in Afghanistan, Ghana and Brazil.

There is a need for measures to redistribute welfare and income. Economists point to the redistributive value of a progressive tax system – which has proven beneficial in my own country, Denmark. 

At the same time, experience from a number of countries has showed that redistribution through subsidies for energy or food is not the right remedy. Not only can such subsidies create unsustainable growth patterns in terms of natural resource depletion and climate change. They are also not very effective in promoting equality. In fact, studies by the World Bank have shown that in terms of poverty reduction, social safety nets are much more effective and could provide the same reduction in poverty for a quarter of the money spend on subsidising energy and food. More and more countries are taking this avenue as examples from Brazil and other countries in Latin America show. Redistribution through social safety nets and social security has proven effective – especially to the extent that it targets the poorest and most disadvantaged people. In short, redistribution though investing in the poor is what pays! 

To sum up: The good news is that increased equity can constitute a growth engine in society. The news becomes even better by the fact that inequality is not a necessary condition but can be addressed and reduced through transformative policies. And the really good news is that  countries  fighting inequality are rewarded by increased stability, innovation and inclusive economic growth - to the benefit of all!

With this, I wish you a good debate today. It will constitute an important input and food for thought for the further work on the development agenda beyond 2015.

Thank you.