Social protection key to tackle inequality in Asia-Pacific

Inequality undermines social cohesion and solidarity. A growing divide between the rich and the poor is often a factor in rising levels of crime and social unrest, undermining trust and weakening bonds of solidarity.

In extreme cases, especially where inequality manifests along ethnic lines, it can lead to polarization, radicalization, and even failure of the State.

Environmental sustainability is also hampered by inequalities, which create resentments and disincentives and, in turn, generate pervasive free-riding and overuse of resources, with unsustainable environmental outcomes.

For instance, evidence from India and Nepal suggests that inequalities in local rural communities actually intensify deforestation.

This is why tackling inequality must be central to the sustainable development agenda. Perfect equality of wealth and income is not attainable but, when it comes to inequalities of opportunity, such as access to health and education, Asia-Pacific governments should not settle for less than a perfectly “level playing field.”

Safety net and opportunities

It is encouraging to see that, in addition to traditional cash transfers, Asia-Pacific countries are introducing innovative measures to reduce inequalities, such as health equity funds, impact investing in education, universal health coverage and expanding access to old-age pensions.

Building on this momentum, countries could also develop sets of complementary policies to tackle inequality in all its forms.

First, national taxation systems could be strengthened. There is ample room to expanding the tax base and strengthen compliance frameworks across the region. This is an effective way of broadening fiscal space to finance redistributive mechanisms, while building solidarity across socioeconomic groups and generations.

Second, productive and decent work should be even more strongly promoted. Forward-looking macroeconomic policies, coupled with active labor market programs and policies that encourage diversification, including industrial upgrading and productivity growth are critical.

Such approaches will ensure that economic growth generates more and better employment for people working in vulnerable conditions, while avoiding a “race to the bottom” triggered by unfettered international competition.

Third, social protection should be enhanced to ensure that everyone has access to quality essential services. Transformative social protection policies need to be anchored in national legislation and aim beyond providing short-term safety nets, to lift people out of poverty and vulnerability.

Complementing their redistributive role, well-designed and implemented cash transfers are an important vehicle of inclusive, pro-poor growth. Good practices from around the region illustrate that comprehensive social protection systems are feasible and affordable but necessitate political will.

Strengthening the evidence base on inequalities and social protection will also further facilitate the development and implementation of effective policies and programs. Innovative financing schemes, especially in partnership with the private sector, will be essential in this regard.

These 3 policy measures benefit all, from individuals and communities, to public institutions and private actors. They constitute a shared responsibility to inspire new partnerships and creative approaches, as we move to implement the 2030 Agenda.

Asia-Pacific inequality cannot be ignored. To do so jeopardizes the future we want of a more prosperous, inclusive, and sustainable Asia-Pacific region. –

Dr Shamshad Akhtar is an Under-Secretary-General of the United Nations and Executive Secretary of ESCAP. She has also been the UN’s Sherpa for the G20 and served as Governor of the Central Bank of Pakistan and Vice-President of the MENA Region of the World Bank.