THE BLOG

Cameron's Growth Approach Will Fail World's Poorest

22/02/2013 12:20 GMT | Updated 23/04/2013 10:12 BST

At the end of the second high-level panel meeting on the post-2015 development agenda in Monrovia last month, Prime Minister David Cameron made a revealing comment. Asked whether inequality should be prioritised over economic growth, he said, "no". Economic growth, he affirmed, is the priority.

Cameron's response showed he ignored the opinions of his fellow panel members. It made clear he opposes the now accepted wisdom that inequality hinders growth. And it revealed a position - enhanced by Cameron's comments this week on siphoning aid money into defence - at odds with the whole purpose of a transformative development agenda to replace the Millennium Development Goals (MDGs): not simply to grow, but to tackle poverty - which exists alongside immense wealth - and to improve the wellbeing of people and planet now and in the future.

The high-level panel, co-chaired by Cameron, Liberian president Ellen Johnson Sirleaf, and Indonesian president Susilo Bambang Yudhoyono, will produce a report after a final meeting in Bali next month. It Monrovia communiqué outlined the need for "transformative socio-economic change" and reiterated the desire "to end extreme poverty in all its forms".

What will concern many civil society organisations (CSOs) and social movements representing the poorest people in the world is that if a high-level panel focused on a new "people-centered agenda" is ignored by David Cameron, there seems little chance for them.

Many CSOs are adamant that development policy must function for the poorest through their participation in decision-making processes. Development remains top-down, often matched - including by Cameron - with the rhetoric of moral responsibility, and, in line with global power relations, dictated from the north and enforced on the south. Northern interests still supersede southern needs. In the case of aid, it is increasingly to the benefit of northern-domiciled private businesses and at the expense of southern people's ownership over their own development.

The successor framework to the MDGs is widely anticipated to be sustainable development goals (SDGs). There is no space for civil society in the process of reaching "intergovernmental consensus", from September 2013 to 2015, and thus little chance of a truly people-centered agenda. Instead, there is an overwhelming likelihood that the private sector-driven growth interests of the most powerful states will prevail.

In spite of the evidence, Cameron seemingly believes growth will tackle inequality. The troubling alternative is that he doesn't believe an overarching focus on inequality is necessary out of adherence to a debunked theory that inequality fires growth with wealth eventually trickling down to all.

Growth is only a means and not an end to eradicating poverty. It will only lessen inequality if part of a wholly reoriented system - one with a place for a word unfamiliar to the Cameron vocabulary and conspicuous by its absence from the official communiqué: redistribution.

A World Bank report last year found that each percentage point of economic growth in Brazil led to 10 times the reduction in poverty that the same growth achieved in India. Brazil, which also outperformed China in poverty reduction, placed greater emphasis on redistributive policies.

The state of poverty and inequality today is telling; a little sharing could go a long way. Almost 2 billion people live in multi-dimensional poverty, a measure incorporating nutrition, education and sanitation. Approaching 1 in 7 people go hungry, with about 1 in 5 obese. And the wealthiest 20 percent of humankind enjoy more than 80 percent of total world income while the bottom 20 percent share only 1 percent.

The IMF and World Bank, rightly associated by many in developing countries with policies that have exacerbated poverty and inequality, note that by the end of the 1990s there was an empirical consensus that countries with more equal income distributions grow faster, and that asset - for example, land - redistribution also leads to faster growth.

Indeed, it has now been recognised by many economists that inequality was a key driver of the financial crisis: excesses of wealth spurred the search for quick returns that created the "bubble economies" which collapsed with such disastrous consequences. Consequences felt most by the poorest.

As a post-2015 consultation affirmed this week, there is a moral responsibility in addressing inequality that Cameron would do well to remember: "The obligation to address inequalities is born from the principles and standards of the international human rights treaties which have been widely adopted in the last several decades, as well as from shared human values."

For the successor framework to the MDGs to bear fruit, it must capitalise on the MDGs' capacity to unite under a cause. But it must also listen to those in whose name development is undertaken, and look to tackle root causes to development problems. In this, the call for transformation is a must. But the transformation must be wide and deep, to match the wide and deep inequalities across the political, economic and social, which continue to frustrate international development.

Mark Dearn will be on the CSO media committee at the High-Level Panel in Bali with Philippines-based NGO, IBON International.