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This post originally appeared here on the Global Development Institute blog.

 

The composition of global inequality is changing. Between-country inequalities, although vast, are mostly falling, while the relative share of within-country inequalities within global inequalities is increasing – what David Hulme and I have recently synthesised as patterns of ‘converging divergence’. New geographies of development are emerging across economic, human and environmental aspects, challenging an assumed divide of a rich, developed North and a poor, developing South. Moreover, it is questionable how much of international development, or its study, would fit with an association of development aid from the Global North to “the poor” in the Global South, driven by a moral geography of charity. While David and I, following others such as Charles Gore, have suggested we may be moving towards an era of global development, we have few elaborations yet as to what that would involve.

Uma Kothari, David Hulme and I recently hosted a small group of leading (mostly UK-based) development researchers to discuss and debate ‘global development’, attempting to understand and explore what it is and its implications. As highlighted below, a lot of questions were raised, with productive scepticism as well as excitement as part of an emerging and intriguing debate as to what global development may involve.

The great development repositioning: beyond North-South?

Rich North Poor South

Many development actors, who have an identity framed in relation to the North-South divide, are having to reposition themselves. The aid dependence of many countries has declined significantly, with greater national potential for redistribution, as Andy Sumner highlighted. Moreover, the World Bank is no longer the only major provider of development finance, leading Ravi Kanbur to ask “What is the World Bank good for?” He has suggested the answer is to focus on global public goods. Many international NGOs from the North, whose identities are based on working in the Global South, have also faced a challenge of repositioning themselves, as David Lewis noted. Organisations such as Oxfam and Save the Children have attempted to increase their work on domestic inequalities within the North, although its unclear how successful they’ve been in that regard or whether international NGOs more broadly are continuing to move in that direction. David Hulme and Eleni Sifaki, based on some preliminary analysis of UK political party manifestos from the 1997 to 2017 general elections in the UK, find some move beyond ‘traditional’ development aid and free trade toward a more multi-dimensional understanding of global development based on addressing global inequalities and promoting social justice.

As educators and researchers of development, we also face such challenges in relation to our teaching and research on this changing world. Teaching and research on the third sector, for example, has often embodied a distinction between the international and domestic context – which David Lewis has argued should be overcome given the potential for useful comparative lessons to be generated across both. In the Global North, the teaching of development studies almost always has a predominant focus on the Global South, raising questions for whether development studies should be more global in scope. Moreover, the production of academic research is often not very global in the sense that although empirics can be drawn from different parts of the world, what counts as ‘knowledge’ is often still produced in the West. [Note: we acknowledge that (due to small size and budget) this workshop was not ‘global’ in scope of where our participants live and spend most of their time, which is largely the Global North] Similarly, old challenges may remain, including data to meaningfully interpret our world, as Dan Brockington argued. Yet, is development studies, as David Hulme suggested in seeking to synthesise some of our discussions, moving towards a focus on “multi-scalar, multi-dimensional, post-binary social progress”, where addressing inequality is central?

 

So what is ‘global development’?

Thinking about development as ‘global’ in scope is initially attractive for a number of reasons. Many ‘development’ challenges are faced in the Global North, including inequality, social exclusion and carbon emissions, which can be overlooked when development is considered just in relation to the Global South (such as with the MDGs). Excluded low-income groups in both North and South can face some real similarities of disadvantage, as Diana Mitlin noted from her experience working with Shack/Slum Dwellers International, and a global development approach offers potential to learn from such comparative experiences. The environmental aspect of sustainable development is clearly one where there is considerable ‘underdevelopment’ in relation to the Global North, which is arguably of urgent concern. Moreover, the North-South boundary is blurring considerably, as part of shifting geographies of wealth, income, poverty, and inequality across economic, human, and environmental indicators. Thinking about development in relation to the whole world may be more fitting to the shifting pattern of global inequalities, including the growing relative importance of within-country inequalities in much of both the Global North and South.In light of the problems and challenges of international development, along with shifting geographies, ‘global development’ has been advocated as an emerging paradigm, and potentially a more progressive framing than international development. Yet the term can be used in different ways. We can make a distinction between global development as scope, meaning geographic extent of development (ie of the whole world, as opposed to just the Global South) or as scale, referring to development actors who operate at, and form policies, across the whole world (as opposed to at a national or local scale, for example).

A growing theme throughout the workshop, however, was that global development is not necessarily progressive. North-South inequalities are still vast. Could the framing of development as a challenge in relation to the whole world lead to a dilution of attention to the biggest inequalities in the world – which are still mostly adversely experienced by people within the Global South? Could framing development as global in scope lead to an abdication of responsibility? Various actors could retreat inwards under the justification “we’re all developing now, so we have to look after ourselves”. Does talk of the global conceal inequalities and power relations? Rural India is clearly not the same as London. Uma Kothari argued that any shift from international to global is irrelevant unless perceptions shift regarding the inferiority of other people. Postcolonialism has always challenged international development as an imperialist project, pointing to the significant continuities from colonial times.

We can’t assume global development is necessarily progressive and must be wary of Eurocentrism in a universal guise and seek to create space for new forms of global solidarity to emerge. Moreover, thinking of development in relation to the whole world also raises the prospect of going beyond zero-sum assumptions about the relationships between national and global inequality, and exploring processes through which both can be addressed, as Dani Rodrik has recently explored.

‘Global development’ can also be framed as ‘scale’ and various discussions thus emerged over whether such an emphasis overlooks national and local development. We live in a world where, in spite of globalisation, ‘nation-states’ remain significant. Indeed, attempts at sustainable development on the ground require drawing on already existing geographical imaginaries and existing global, national, local processes, which have a rather sticky influence as Sarah Radcliffe noted. Debapriya Bhattacharya argued that the national scale of policy implementation and the challenge of policy coherence are crucial for SDG implementation. Charles Gore suggested that while sustainable development was originally a normative concept which was global in scope, it is largely now framed as a national challenge which should be pursued in all countries – as manifest in the SDGs.

Associating ‘global development’ with policy and actors at the global scale, however, can lead to perceptions of elitism, and of missing the boat in an era where the national continues to remain prominent. The vital role of actors and processes at various spatial scales – which include, but are not limited to – the global were repeatedly pointed to.

 

Cause for global development optimism?

Although global development may not be automatically progressive, rethinking the North-South framing of development in relation to the contemporary 21st century context is an intriguing prospect. This does not necessarily mean abandoning the North-South distinction. In case you hadn’t noticed from this blogpost, we talked about beyond North-South, but ended up mentioning the terms ‘North’ and ‘South’ as much, if not more, than at any other workshop! We also talked about “Norths” of the “South” and “Souths” of the “South”. Binaries are often inescapable, yet can sometimes serve to provide/illustrate productive tensions. Yet, it does involve clearly moving beyond a focus on ‘development’ as only a challenge for the Global South.

The issue of universal basic income (UBI) could be a fascinating lens through which to consider global development (as scope), as Sam Hickey highlighted. Across both Global North and South, similarities can be found with the ‘expulsion’ of growing numbers of people, adverse incorporation and a rise of the precariat. Yet while ideas associated with UBI are gathering increasing attention across different geographic contexts, it remains to be seen how much they will take hold and whether they will play out very differently in the North and the South.

A sense emerges that the world is changing, but how exactly and what this means, warrants continued attention. Indeed, Uma Kothari raised an intriguing point, that we may see as much need to rethink development – a term which retains a centripetal tendency despite the ambivalence, if not outright discomfort, of many in its orbit towards it – as to the ‘international’ or ‘global’ part. We may not have provided any singular perspective on or approach to global development, but a number of insightful contributions were made, which are likely to continue to be returned to as this debate unfolds. While productive scepticism surfaced, there was also considerable optimism about a shift towards global development that is more attuned to the shifting pattern of global inequality.

Clearly there’s plenty more to explore and we look forward to continuing this discussion. We are in the early stages of planning a larger conference on this theme in 2018. Look out for more details as they appear.

National security, anxiety, cyborgism, danger, ethics, innovation, the public-private divide, crises, avoidability, the politics of neglect – who knew pharmaceuticals could relate to so many different aspects of life?

From pharmaceuticalisation to moulecularisation to genericisation to securitisation to neoliberalisation, who knew there were so many “-isations” related to pharmaceuticals?

From human rights lawyers, international relations specialists in intellectual property to social theorists, science and technology studies experts, anthropologists, to geographers, who knew people from so many disciplines were working on pharmaceuticals?

From pandemic disease as a Foucauldian crisis of circulation, to the Polanyian backlash against market dynamics in pharmaceuticals, pharmaceuticals can and are being looked at through many lenses.

Last month I was lucky to be invited to participate in a workshop on “Pharmaceuticals in Global Health” organised by Stefan Elbe, Anne Roemer-Mahler and Chris Long of the University of Sussex’s Centre for Global Health Policy. The event marked the culmination of their European Research Council project on “Pharmaceuticals and Security”.

Rather than gather people with the same disciplinary background, approach or geographic area of interest, the workshop gathered people who broadly study the same thing – pharmaceuticals. It was amazing to see a variety of perspectives on what is defined in the Oxford Dictionary as a “compound manufactured for use as a medicinal drug”.

The pharmaceuticals landscape is one which includes actors ranging from the G7 to the World Health Organisation in Geneva, Switzerland, to the Biomedical Advanced Research and Development Authority in the United States to small-scale manufacturing units in Gujarat, India.

Rightly or wrongly pharmaceuticals has come to play a key role in global health policy.

Pharmaceuticals is clearly central to a whole variety of pressing societal challenges and is multi-dimensional.

All participants were asked a question for a video on whether the future of global health is pharmaceutical:

 

Participants seemed to agree that pharmaceuticals will continue to play some role in global health. Pharmaceuticals is a fascinating lens not just on health issues, but on wider societal issues too. Pharmaceuticals, and the pharmaceutical industry, can’t easily be lumped into one singular logic either, for they are extremely heterogeneous.

The pharmaceutical context I research, involving the supply of Indian pharmaceuticals to, and local manufacture of medicines in sub-Saharan Africa, is quite distinct from that in North America or Europe. Rather than issues of security centring around bio-terrorism, a key challenge is one of perennial insecurity of lack of secure access to affordable, effective pharmaceuticals.

As someone who thinks pharmaceuticals are particularly important for development, and not just for economic reasons, this was a fascinating opportunity to participate in a truly multi-disciplinary conversation. Rather than being confined by disciplinary boundaries, we were able to discuss and debate multiple different angles on the life of this curious industry.

This entry was originally posted here on the Global Development Institute blog.

The segmented globalisation practices within India’s pharmaceutical industry

In a new paper published in Global Networks, Rory Horner and Jim Murphy argue that significant discontinuities are present between the business practices Indian pharmaceutical firms deploy in South-South production networks vs. those in South-North trade.

The geography of global trade is shifting rapidly, with actors in the global South playing much more prominent roles as both producers and consumers in global trade. South-South trade has expanded rapidly, yet South-South value chains and production networks have received less attention than North-South oriented value chains to date.

India’s pharmaceutical supply, often termed the “pharmacy of the developing world”, is one of the most crucial, and fascinating, examples of South-South trade. More than 50% of India’s pharmaceutical exports by revenue, and even more by volume, go to other countries in the global South. They are significant economically, but perhaps even more importantly for public health – having the potential to increase access to medicines through relatively low-cost generics. Yet, although it is well-known that large volumes of pharmaceuticals are exported from India, relatively less is known about the underlying supply chains.

Figure. Export destinations of India’s pharmaceuticals by revenue for 2014-15

Drawing on a large number of interviews conducted with large, medium and small-scale firms, we took a systematic, inductive, practice-oriented approach to understanding the globalization strategies of Indian pharmaceutical firms.

We found significant discontinuities between the practices deployed in the industry in accordance with whether the supply is oriented towards Northern or Southern end markets. Key differences are present in quality standard requirements – sometimes simplified to a distinction between “regulated” Northern markets, and less or “semi-regulated” Southern markets – which create some degree of market segmentation.

Yet the differences go beyond that and relate to a whole variety of distinct production and quality practices, market access and innovation strategies that Indian pharmaceutical firms use to reach different end markets.

To supply Northern end markets, many large Indian firms possess, for example, USFDA or UKMHRA approved quality standard-approved plants for particular drugs, have globalised aspirations and image management, significant financial resources and capabilities, have partnerships with Northern MNCs, have their own manufacturing and even R&D facilities in Northern markets, have dedicated R&D investment and are keen to be seen as innovation-oriented.

In contrast, to participate in Southern markets, with lower quality requirements, firms find lower entry barriers, often have a short or medium-term outlook, produce drugs from separate plants for those from Northern markets, often have key relationships with Southern trading companies, and have very little dedicated R&D facilities or degree of being innovation-oriented.

Production is strongly segmented between Northern and Southern end markets. Only the largest and most capable Indian firms participate in supply to Northern markets. Most also supply Southern markets, yet usually through separate production facilities and wider practices. A much larger number of Indian firms specialise in the Southern end market strand.

This research challenges any singular notion of the Indian pharmaceutical industry and its supply of medicines, pointing to significant heterogeneity. The table below highlights some of the key discontinuities in value creation, enhancement and capture strategies.

In short, we highlight the significant discontinuities within the industry, particularly between supply to Northern end markets and that to domestic or South-South markets. These differences are related to, but go beyond quality control certifications, and involve a range of production, market access and innovation practices.

There are other significant aspects of variation within the Indian pharmaceutical industry, for example between different companies, between formulations and bulk drugs production, between large and small firms. Moreover, some large Indian firms also supply medicines through a chain not discussed here; via donor organisations such as the Global Fund. Yet, those differences pointed to here are the minimum requirements to participate in these chains.

From an analysis of these practices, it appears both South-North and South-South networks have their benefits and limitations, with a need to find industrial and public health balance between high-cost and often inaccessible supply to Northern markets and cheaper, but sometimes weakly regulated, South-South trade in pharmaceuticals.

Much further research is needed to unpack “India’s pharmacy to the developing world”. I am currently exploring such issues further in an ESRC-funded project on “India’s pharmaceuticals and local production in sub-Saharan Africa”.

The paper was originally presented at a workshop on “Global production and local outcomes”, held in Manchester in June 2015. It forms part of a special issue, edited by Rory Horner and Khalid Nadvi, on “Global production networks and the rise of the global South”, which is forthcoming in Global Networks.

Geography Directions

 Rory Horner, University of Manchester, United Kingdom

trump Donald Trump, quoted in The Financial Times (2017). Image available via Pixabay.

Not so long ago, proposed policies to “repatriate international supply chains” as part of national-oriented initiatives openly marketed as protectionist, would have been quite difficult to imagine. Yet, like in many issue areas, Donald Trump’s approach to trade policy is unconventional. His planned trade policies, including import taxes, have been met with widespread condemnation, with many questioning how they may work in an era of global value chains (GVCs).

The irony of Trump advocating protectionism to support American manufacturing while visiting Boeing, which reportedly draws on parts manufactured in over 60 countries, has been pointed to. Former Swedish Prime Minister Carl Bildt has tweeted that: “If Trump wants to close down global value chains he will close down Boeing as well. Among others”.

Meanwhile, in relation to the UK’s planned…

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This post was originally posted here earlier today on the Global Development Institute blog.

In a new paper, published in the GDI Working Paper series, Rory Horner and David Hulme argue that the macro-scale map of development has shifted from “divergence, big time” to “converging divergence”, which consequently requires a shift from thinking of international development to global development.

The contemporary global map of development appears increasingly incompatible with any notion of a clear spatial demarcation between First and Third Worlds, “developed” and “developing”, or rich and poor, countries. The Sustainable Development Goals (SDGs), agreed in 2015, have a global focus that represents a universalisation of the challenge of development, a clear departure from the Millennium Development Goals’ (MDGs) almost exclusive focus on developing countries. The World Bank declared in April 2016 that it will no longer distinguish between developed and developing countries in its annual World Development Indicators. Although increasingly widespread recognition exists that the distinction between “developed” and “developing” countries is no longer tenable, enormous inequality and unevenness persists, and to some extent is even augmented, under a new spatial configuration of development. What then is the new “map” of development?

The “old” focus of international development was based on addressing what Lant Pritchett referred to as “divergence, big time” – the major departure in terms of economic development between developed and developing countries across the 19th and 20th centuries. “Poor people” were assumed to be synchronous with “poor places”. Various critical scholars questioned this binary, yet it remained dominant. The developed/developing country divide persisted through the second half of the 20th century to such an extent that the MDGS, the major development framing exercise of the late 20th century, were almost completely set within this type of macro-geographical categorisation: they were a rich world product which set targets for poor countries.

The OECD 2010 report on Shifting Wealth, the UNDP’s 2013 Human Development Report (which highlighted “The Rise of the South”), and recent books by Kishore Mahbubani and Richard Baldwin, join various claims that suggest a “great convergence”. Notably, converging trends between Global North and South are present across economic, human (eg health, education) and environmental indicators (eg carbon emissions). Inequality expert, Thomas Piketty, has suggested in relation to income that: “all signs are that this phase of divergence in per capita output is over and that we have embarked on a period of convergence” between rich and poor countries (2014, 61).

A Pew Research Center Survey has even found that a majority of people in the Global South believe their children will have a better life than they have, while a majority in the Global North believe their children will be worse off.

Clearly, despite such positive attitudes within the Global South, as well as dismal perceptions of “relative” falling in the North and the popular appeal of campaigns to “take back control” in the UK or “make America great again”, actual convergence or meeting has not been achieved. It would be unrealistic, and almost impossible, for 15 or at best 25 years to have reversed an almost two-century long “divergence, big time”. Yet, the trends above do indicate a significant change in trajectory in the map of global development and the relationship between “Global North” and “Global South”.

Accounts of convergence must be tempered with recognition of relatively growing inequalities and unevenness within nations. We argue that instead of a “great convergence” having superseded “divergence, big time”, 21st century global development is characterised by “converging, divergence”.

A complex mosaic of rich and poor has evolved within nations. Across various aspects of economic development, human development and the environment, cross-country converging is overlain by vast, and often growing, inequalities between people living in the same localities, nations, and macro-world regions. Indeed, as aspects of “global convergence” receive more and more attention, reports such as the OECD’s 2011 Divided We Stand and 2015 In It Together simultaneously highlight challenges of rising inequality within the Global North. The World Bank has recently examined Taking on Inequality. Francois Bourguignon has suggested that: “a partial substitution of inequality within countries for the inequality between countries”.

Within-country inequalities should be taken particularly seriously. Branko Milanovic and John Roemer have suggested that many people make perceptions of their welfare in relation to those in greater spatial proximity. Thus, within-country inequalities may be “weighted” more importantly than those in relation to people in other countries and in different parts of the world.

21st century “converging divergence”, at its most simple, is based around falling between-country inequalities, especially between countries in the Global North and South, and rising within-country inequalities. The term seeks to reconcile an empirical reality of how claims of “global convergence”, driven by highly populous rising powers of China and India, can coexist with growing inequality, particularly within countries.

Converging trends at a global level, along with more localised divergence, challenge many of the key aspects of dominant ideas about development – including its spatial reference and nomenclature, the meaning of development, as well as the orientation of development assistance.

While the “what” and “how” of the post-2015 era has been extensively debated, the “where” question is vital and has widespread implications. We suggest that these changes necessitate a shift from analysing international development to global development, as outlined in the table below.

Table 1. From International Development to Global Development
ISSUE International Development “Divergence, big time” Global Development“Converging divergence”
Geographic focus Place-specific: synonymous “poor countries”, “poor people” and Global South Universal: Sustainable development issues wherever they exist – Interconnected issues, shared issues across North and South, ‘one world’ and graduated challenges toward bottom billion
Spatial nomenclature First-Second-Third Worlds; Developed/Developing; Global North-South Layering: Global convergence, national and sub-national divergence (enclaves, peripherality, connectivity/exclusion)
Prominent meaning of development Modernisation and growth: Southern countries becoming like the Global North SDG agenda: Transformation, true “global development”; sustainability; social justice
Big ‘D’ development morality and actors Charity and development aid by Northern states, NGOs Development cooperation by traditional and new donors; multiple domestic and international sources of public and private development finance

Source: Authors’ construction.

The 21st century global map of development has shifted dramatically from the “divergence, big time” which Lant Pritchett articulated in 1997. “Converging divergence” – and the declining between-country inequalities and growing within-country inequalities it involves – instead presents a different “where” of global development. We conclude that “converging divergence” questions an exclusive emphasis of development studies and policy on the Global South and addressing the development divide with the Global North. At the same time, the continued extent of between country inequalities, despite aspects of some converging trends between North and South as two aggregate groups, means that an interest in addressing such inequalities – the historical focus of international development – cannot be abandoned or ignored. Arguably addressing global inequalities, both between and within countries, regions and North and South, must play a central role in development. It is also vital to pay attention to the shifting geography of these changes. Today we face a different socio-spatial manifestation of development divides than those which characterised most of the 19th and 20th century, so the challenge for scholars, policymakers, activists and states is to understand and work towards addressing these new 21st century divides.

Here at GDI we are keen to push forward discussions of “global development”, and unpack further its causal dynamics. We will be hosting a workshop this June to take this issue forward so look out for more!

This post was originally posted here earlier today on the Global Development Institute blog:

Have we all been “divided and conquered” by the super-rich? Political divides and polarisation were highly apparent in the UK and the US in 2016, and are highly prominent elsewhere in Europe. Votes for Brexit and Donald Trump have brought renewed attention to major cleavages within society – along economic, social, cultural, urban/rural lines. This has fostered disagreement and tensions amongst people who encounter each other in their daily lives, distracting attention from the almost mythical super-rich, with their almost impossible-to-relate-to amount of wealth. While such divides amongst the 99% (or even 99.9%) have grown and need to be addressed, stealthily the global super-rich seem to get wealthier and wealthier.

Extreme inequalities: a timely reminder

Oxfam’s flagship annual report of global inequalities, timed to coincide with the Davos World Economic Forum meeting reveals its most shocking-yet figures in terms of global wealth inequality – the combined wealth of the wealthiest 8 people (all men) on the planet is equivalent to that of the bottom 50% of the global population. The report valuably refocuses attention on where the starkest inequalities lie – between the super-rich and the rest.

Oxfam_golf_cart inequality.jpg
The report contains a range of staggering statistics on various inequalities. A few that stand-out include:

  • The World’s richest 1% own more than the other 99% combined
  • While two buses were needed a couple of years ago to fit those people who own more than the poorest half of humanity, now only a large golf buggy is needed
  • Between 1988 and 2011 the incomes of the poorest 10% increased by just $65, while the incomes of the richest 1 percent grew by $11,800 – 182 times as much.
  • A FTSE-100 CEO earns as much in a year as 10,000 people in working in garment factories in Bangladesh.
  • On current trends, it will take 170 years for women to be paid the same as men.

Following on from 2016’s “An economy for the 1%”, Oxfam’s 2017 report “An economy for the 99%” – rather than increasing divisions – seeks to lay out a positive vision of a “human economy” that could work for all.

Oxfam’s wealth statistics and interpretations are often critiqued. Critics like to point out that wealth is not income or consumption. For example, someone who just graduated from Harvard Medical School could be in the lowest decile of global wealth, yet this could be a very short-term position as they are likely to be very high up the income distribution. Americans with a lot of debt, but potentially high income and consumption, can then be found amongst the lowest 10% of global wealth.

A box in the report (p. 11) on the wealth inequality calculations addresses these critiques and clearly explains the methodology (based on data from Credit Suisse and Forbes billionaires list).

A global challenge

One wealth statistic Oxfam’s report doesn’t mention, but which the Forbes billionaire’s list also shows, is the shifting geographical composition of billionaires – a rapidly growing portion are from developing countries. The figure below, from my ongoing research with David Hulme, on contemporary global development, depicts this growing share.

bil-chart

Source: Horner and Hulme (forthcoming).

The number of U$ billionaires for the world has more than trebled from 538 to 1,810 from 2001-2016, yet the increase has disproportionately been in particular developing countries. While the number of billionaires as a whole has increased almost two and a half times in countries that fall into the UN’s classification of “developed”, it has increased almost 7.5 times for developing countries. In that 15-year period, the number of billionaires has increased in China from 1 to 251 (251 times increase), and India from 4 to 84 (21 times increase). In the “transition” economy of Russia, the number has increased from 8 to 77 (a 9.6 times increase).

This shows the growing extent of a significant disconnect between the super-wealthy and the societies in which they come from. Moreover, despite a slightly more even spread of aggregate incomes, jobs, prosperity, across countries – what some are calling a “great convergence”, much of this benefit is accrued by a small minority of the population. Extreme inequalities are thus a global problem – within and across societies.

Oxfam has previously (and already this year) been accused of mis-directing attention from the economic bottom-half of the world’s population to the global 1%. The 2017 report does note progress in terms of reduced numbers living in extreme poverty by official measures, especially driven by China and India. It could also be added that some research by leading inequality researchers such as Branko Milanovic and Francois Bourguignon – albeit using measures which are less attuned to capturing the extremes at the high end of the scale – finds somewhat of a reduction in global income inequality across individuals has taken place in recent years (driven by growing incomes in China and India particularly). Such research still points to vast income inequalities. Oxfam suggests that without such extreme concentration of wealth, much more progress could have been made in addressing extreme poverty.

Rather than mis-directing attention, Oxfam’s report is a shocking reminder of, and valuable signal to, where the starkest inequalities lie: the divide between the 1% (and even the upper fractions of it) and the 99%. Rather than income streams relating directly to how hard or well people work at a particular occupation, as Thomas Piketty as shown, wealth has growing significance in the global economy. As well as the headline wealth statistic, the Oxfam report presents a shocking collection of facts about other extreme inequalities related to wages, gender etc.

Development “goods” – wealth and income being key – are overwhelmingly accrued by a small portion of people. Development “bads” – as Oxfam’s work on carbon inequalities has shown – are also contributed by those same people.

While super-rich individuals and corporations are begged to come to different countries (the report notes various such incentives), refugees are often forcibly kept out and even blamed for increasing inequality.

Differences among the 99% have been invoked and publicised fostering battles amongst the vast majority. In the US, this week a President who has sought to invoke addressing those “left behind” will be inaugurated. Without question, he will continue to divide the 99% and overlook the 1% (and its extreme upper end) which he and his “billionaires and mere millionaires” cabinet are part of.

Reformed international cooperation for a human economy

In line with attempting to construct a positive vision of an “economy for the 99%”, Oxfam make a number of valuable suggestions, including:

  • International cooperation to avoid tax dodging
  • Wealth taxes to create funds for healthcare, education and job creation
  • Action to encourage companies to benefit workforce and society, as well as executives and shareholders
  • Tackling educational barriers and burden of unpaid work for women

To make such suggestions work will require a countering of the “divide and conquer” by the super-rich, with a mobilisation within and across countries.

Most countries have sufficient resources domestically for there to be considerable scope within countries to address inequalities. While this has long been the case in the Global North, it is increasingly the case in the Global South. One recent analysis suggests that more than 75% of global poverty at lower lines could be eliminated via domestic redistribution funded by new taxation and reallocation of public spending.

Yet, international coordination is vital too. Oxfam suggests “governments must cooperate” and this point couldn’t be amplified enough. To be clear, much previous international cooperation has been mis-directed in the interests of the super-rich- making things easier for certain companies, but not for many people or for many small businesses. Rather than an abandonment of international cooperation – or a retreat from globalisation takes which could equally be skewed to restricting certain mobilities and favouring the highly mobile super-rich – a reformulation is needed. Action on corporation tax and a wealth tax can only fully work with such international coordination.

Surely nearly all of us can agree that such extreme inequalities are unwarranted and unjust? To move away from being “divided and conquered” by the super-wealthy, a much more unified approach within and across countries is needed. Oxfam’s 2017 report is a timely reminder of that.

This piece was originally posted on the Global Development Institute blog:

Rory Horner begins our series looking at some of the big trends in development to look out for in 2017.

2016 was, by many accounts, a strange year. Contemporaneously with the often discussed “rising powers”, 2016 saw the growth and resonance of “declinism” in what could (at least relatively-speaking) be called “falling powers”. Take for example, the political success of campaigns summarised in mottos to “Make America Great Again” in the US or “Take Back Control” in the UK.

According to Pew Research, a majority of people in the so-called “developed world” believe their children will have worse lives than they have, despite having substantially better lives by most indicators than the vast majority of people in “developing countries”.

pew

After two centuries of a growing gap, inequalities between what were once called “rich” and “poor” countries have begun to slowly decline in the 21st century – what has been termed a “great convergence”. At the same time, inequalities have increased within many countries – with the (absolute) poor in developing economies and (relative poor) in developed economies increasingly left behind.

2016 witnessed what Mark Blyth has referred to as a new era of neo-nationalism. The loss of national control in the Global North has been amplified, as have the extent of foreign influences being seen as negative. At the same time, the amount of control that can/will be taken back and the likely changes that will result have been inflated too.

The question for 2017 is not whether inequality will be on the table. The World Bank is “Taking on Inequality”. Neo-nationalists are invoking foreign sources of domestic inequalities.  It is how inequalities will be played out.

Will China and migrants be presented as the source of domestic economic and social challenges? Will states in the Global North cite domestic challenges and retreat away from addressing and improving international responsibilities and commitments favourable to the global development? Will domestic sources of inequalities, such as the declining tax take from the rich, be overlooked?

The “trading-off” of domestic and international inequalities is one to watch in 2017.

 

Read more of Rory Horner’s work on trade, globalisation and political economy.