By Manuel Chiriboga

The Global Summit of 1995 was a breaking point for social development, as it brought together so much hope and commitment and underlined the importance of Human Rights, as integral rights of every person. Nonetheless, from Copenhagen on, everything started to move in the wrong direction.

     At Geneva, things happened as they were bound to happen, considering the global context, both the social policy paradigm that most countries use – under the guidance of the Bretton Woods institutions and the G7 countries – and the lack of real commitment of most governments to implement the Copenhagen declaration.

     Back from Copenhagen many Latin American NGOs advocated their governments on concrete follow up steps. They held regional follow up conferences at Quito and Buenos Aires in 1995, under the umbrella of the Social Ministers network of the Río Group of countries, with support from UNDP and UNESCO. It was clear though, that by the end of 1995 the commitment had dwindled and that governments were back to business as usual.

     A few years after Copenhagen the Asia financial crisis swept through most of Latin America and quickly produced an increase in poverty and unemployment. If Latin America had grown at 5.3% in 1997, it dropped to 2.3% in 1998 and to 0.3% in 1999, with still modest perspectives for 2000. As a consequence the number of people living in poverty that had decreased from 42% in 1990 to 36% in 1997, increased again for the year 2000. People living on less than 1 US$ a day increased 70.8 million to 78.2 million between 1993 and 1998. Increases in poverty were particularly dramatic in Colombia, Ecuador and Venezuela. A revealing indicator is unemployment. In the urban areas of Latin America it increased from a 6% average from 1990 to 1997 to 8.4% between 1998 and 1999, with above average increases in most of the South American countries, including Argentina, Brazil, Colombia, Ecuador and Chile.

The deep causes of poverty in Latin America

     Why were countries unable to drastically reduce poverty and exclusion in its many forms? A more in depth analysis is needed, but let me mention a few crucial causes. Some are historic and structural, others are more recent, interacting with each other to produce unfortunate results. Among the historical and structural: inequality and deeply entrenched forms of exclusion based on class, gender and ethnicity. Among the more recent: Latin American immersion in globalization, macroeconomic adjustment policies and the recent trends in social policies.

     First of all, there is the profound inequality that characterizes Latin America. The region is by far the most unjust and unequal region of the world. About 25% of the Latin American income goes to 5% of the richest segments of population, while the poorest 30% of the population receives 7.5% of total income. The most unequal countries are Brazil, Chile, Guatemala, Ecuador, Mexico, Panama and Paraguay. Income inequality is not so much a problem of traditional rural areas, it is worst in urban areas. In countries such as Brazil, Chile, Mexico and El Salvador inequality is strongest in urban areas. Forbes magazine lists some Latin American families as the wealthiest in the world, with Mexico, Brazil and Venezuela with the biggest number of billionaires.

     The fact is that inequality is the basis for institutions of exclusion. Political, economic and cultural institutions reproduce and reinforce social practices that exclude the poor, indigenous peoples, the African Latin American groups and women, from accessing property, economic opportunities, political power or getting a fair trial. It is said that in Latin America, the right to vote, does not come linked to other economic, social and cultural rights. This creates fragile democracies, based on clientelism and with a strong tendency towards authoritarism.

     As a result of peoples’ struggle the state had tried to balance such structural inequalities, assuring that through public services, poor people could gain access to some basic needs. The welfare state in Latin America was basically a way to redistribute some of the wealth in the region from the elite to the poor, without modifying the structures of inequality.

     With Structural Adjustment and the opening up of the Latin American economies to international market forces, some of these safeguards were removed. In fact privatization and the downsizing of the state removed the distributive mechanisms that had been put in place from the 50s to the 70s, through taxation, land reform, the social security system and other social investments. In the 90s, universal coverage of basic needs as an aim of state policies was replaced with “targeting the poor”, under Bretton Woods guidance. Social Investment funds became the main channel of social spending, mostly based on external debt. As a result inequality could only become more pronounced.

Export oriented deformation

     At the same time adjustment policies removed the barriers that separated Latin American economies from world markets. Export production was seen as the new motor of the economy and internal market production was penalized. This concentrated growth and wealth in one segment of the economy, while jeopardizing the rest. Most of the Latinos were left out. The “opportunities” opened up by globalization have been captured in a very unequal way, benefiting the already rich and politically powerful elite. Immersion in the global economy brought another phenomenon: increased vulnerability to commodity and financial crisis, as the recent Asian and Russian contagion demonstrated in Latin America.

     As a result inequality has increased in almost every country of the region, while poverty has not been reduced significantly and people have become more vulnerable to external shocks. Not surprisingly, those countries that have gone further with neo-liberalism and opening up of economies, have increased inequality, even though, in some cases they have reduced the worst forms of poverty. Targeted social investments have been able to remove some of the manifestations of poverty, but have not, by far, removed its causes. Countries such as Chile, a flagship model by the liberal paradigm, grew at an unprecedented rate from 1984 on, but increased inequality dramatically. Argentina, Brazil, Mexico and even Costa Rica are following the same path. Whatever they do with social investment funds and “targeted policies”, inequality and the structures of exclusion that are associated with it will keep a significant part of the Latinos in poverty.

Geneva changes the Copenhagen paradigm

     The shortcomings in the implementation of the Copenhagen commitments were no surprise in Latin America. From 1995 on, the Washington Consensus model was pushed forward, with minor changes. There was more attention to the poor, more focus on social investment and more attention to governance issues. But the causes of poverty, inequality and exclusion were neither addressed nor removed. The profound injustice and vulnerability that globalization brings remained. There is an unresolvable contradiction between the structures of inequality and adjustment policies and the requirements of a more inclusive development.

     What was then amazing in Geneva is that the Bretton Woods institutions – now with UN support – are saying with Secretary-General Kofi Annan that “people are poor not because of too much globalization but too little.” Put forward strongly by Annan, this approach became even more evident with the launching of the “2000: A Better World for All” report of the OECD, the World Bank, the IMF and the UN, signed by Annan, Wolfensohn, Johnston and Kohler. While this report establishes a number of social goals – including halving poverty by 2015, universal primary schooling by the same year and also reducing infant mortality by two-thirds, achieving gender equality in schooling by 2005 – it does not question globalization of markets and finance, nor does it include specific means to reduce global inequality and vulnerability, such as the Tobin tax. The report doesn’t clearly establish the means by which such targets will be met.

     Probably the epitaph for the Copenhagen Social Summit commitments came with the removal of the notion of political, civil, economic, social and cultural rights for all. The poor are described as victims of poverty, people that live in poverty, people that need support and compassion. There is no reference to the causes of poverty, such as inequality and exclusion, as we experience them in Latin America. Poverty can be reduced, according to the report, if resources are spent more efficiently, if waste of resources is reduced, if social policies are more effective and if transparency is associated with social expenditure.

     Latin America knows best from its recent past. It does not work that way!

Manuel Chiriboga is Executive Secretary of ALOP, Asociacion Latinoamericana de Organizaciones de Promocion. Latin America Association of Promotion Organizations.