Let me congratulate you on your election as Chairperson of this important session of the Third Committee. You bring to this Committee a wealth of experience and I am confident that under your able leadership the Committee will tackle its vast and complex agenda with gusto and alacrity. I would also like to take this opportunity to extend my felicitations to the other members of the bureau. You should be assured of our fullest cooperation and assistance in your work.
In keeping with the practice of my predecessor, Mr. Nitin Desai, who over the years led the Department of Economic and Social Affairs with great ability, I am most pleased to address the Third Committee for the first time in my capacity as the Under Secretary General for Economic and Social Affairs.
I am very much aware of the rich spectrum of matters under the purview of this Committee, from gender and human rights to questions addressed by the newly formed Permanent Forum on Indigenous Issues, to drugs and crime control, to the range of other aspects of social development. Today I would like to share with you my thoughts on the importance of integrated social and economic policies in dealing with all of these matters. Mr. Johan Scholvinck, Director of the Division for Social Policy and Development, will then comment specifically on the items on the Committee’s agenda on social development, including questions relating to the world social situation, the follow-ups to the World Summit for Social Development and the Madrid World Assembly on Ageing, and the situations of other special groups.
As I will elaborate in more detail this afternoon in my statement to the Second Committee, we are meeting at a time when the world economic recovery is gaining traction and the short-term outlook seems promising. Nevertheless, the mediocre growth of the world economy for the past two years has impeded progress towards the Millennium Development Goals.
Furthermore, the inevitable preoccupation with short-term economic considerations may have distracted us from tackling the long-term, largely social, development objectives of the Millennium Declaration. The challenge is to ensure that growth is equitable, inclusive, pro-development and supportive of equality between men and women. I will devote the rest of my statement to this challenge, which lies at the core of the work of your Committee.
To meet this challenge, an essential step is to shed the prevailing hierarchical approach to economic and social policies, in which the economic is considered “hard” and the social “soft”. This approach should be substituted by one, in which social development goals are fully and effectively integrated into economic policies. In order to reduce poverty, eliminate extreme poverty, and to enhance equity, social integration and gender equality, we must be able to reconcile economic growth, employment generation and active social policies. This requires a consistent macroeconomic framework and an equity-enhancing productive development strategy. Social policies cannot be regarded merely as a mechanism to compensate for the adverse social effects that the functioning of the economic system may generate. Indeed, social policies can almost never substitute for social inequities that are generated by what, from a social perspective, may be regarded as a malfunctioning of the economic system.
The links between social development and economic policies are multidimensional. Social cohesion and an adequate accumulation of human capital by women and men are essential prerequisites for economic growth. Given their central role in human capital formation, gender-sensitive social investment policies are crucial to reconciling growth and social development. In this powerful sense, social investment is and should be regarded by economic policy makers as an essential productive factor.
It should be recognized, on the other hand, that a sound macroeconomic environment is a necessary condition for a successful social policy. There is now a consensus that macroeconomic instability is harmful for both growth and equity. Episodes of instability, such as rising inflation, recessions and unsustainable trade deficits, disproportionately affect vulnerable groups, and the reversals of the adverse social effects of crises tend to be slow and incomplete. In addition, instability undermines savings and investment, and adversely affects the functioning of the State sector, thereby reducing long run growth and the potential for productive job creation.
Likewise, technology policies and productive strategies should include tools to pursue the goals of social development. Failure to address the differential impact of technology, trade liberalization and productive restructuring on different social groups may increase historical inequalities, reducing the ability of groups adversely affected to contribute to the intentions of economic and social policies. Thus, trade liberalization cannot and should not be pursued as an end in itself, but rather in ways that help equity and poverty reduction.
Social policies should focus on supporting an inclusive growth process. The best social outcome is one in which women and men share the benefits but also contribute to economic development. Social policies contribute to both equity and growth when they seek to strengthen the weakest, to accommodate the less adapted, to endow the poorer agents and to reinsert the losers as active economic citizens.
Authorities responsible for macroeconomic, trade and productive development policies have frequently not been accountable for the social effects of their decisions. The original stabilization and structural programmes rarely addressed their social consequences. At the World Social Summit in Copenhagen a commitment was made to include in structural adjustment programmes three central social development goals: poverty eradication, employment growth and social integration. This commitment was based partly on the conviction that a stable economy cannot be built in an unstable society and that social dimensions must be brought explicitly into discussions on structural adjustment and macroeconomic policies design. But even recent efforts to include some social dimensions into the design of such policies have had a clear bias towards viewing social policies as compensatory measures.
Social progress is the result of three basic factors: a long-term social policy aimed at improving equity and guaranteeing inclusion; economic growth that generates adequate quantities of quality employment for women and men; and the reduction of the productivity gaps between different economic activities and agents. Globalization, whatever its merits, has increased tensions in all these realms. It has skewed the demand for labour towards high skills, generated new tensions between competitiveness and employment, increased dualism in productive structures and created new social risks. Given these tensions, social strategies must focus on three critical areas: education, employment and social protection.
Education is not only a human right, but also the primary vehicle for lifting marginalized adults and children out of poverty and for enabling them to obtain the means by which they can participate fully in their communities. Given the correlation between present educational disparities and future income disparities, both within and between countries, it is imperative that developing countries make every effort to increase the contribution of public resources to education. In order to overcome existing gender gaps, the education of girls should receive particular attention.
An inadequate generation of quality jobs can defeat the best efforts in the field of education. When employment generation is low and skill-biased, income gaps between skilled and unskilled workers tend to widen. Unfortunately, the inadequate generation of quality employment seems to be one of the most problematic features of the prevailing economic system. In this context, the adaptability of labour to technical change and the business cycle is crucial, but increased labour market flexibility is only one of the possible instruments to achieve this objective and it is a sub-optimal one under several circumstances. Thus, to build such adaptability, more emphasis should be given to strong human resources training schemes, to institutions that enhance cooperation between labour and employers, both at the national level and within firms, to adequate social protection, and to a prudent minimum wage policy.
The promotion of social dialogue plays a crucial role in this regard. The process of policy-making can be as influential as its substance in creating the conditions for the achievement of more and better employment. Strengthening procedures and institutions for social dialogue, including specific proposals for enhanced employer and worker organizations, is crucial.
Let me now turn to the third area, social protection. Improved social security systems are key elements of an integrated approach to eradicating poverty and improving equity. To be effective, these systems must provide for universal coverage and solidarity and cover basic risks in an integrated way –particularly nutrition, health, ageing and unemployment. We must recognize, of course, that in countries where the labour force is largely rural or informal, such schemes can be developed only gradually. Moreover, social security systems do not come without costs. In many countries, such costs are associated with population ageing, changing family structures, increasing costs of medical care, persistent unemployment and the abuses and disincentives they may generate. Addressing the differential impact of such schemes on women must be a guiding principle, since women are both beneficiaries and commonly carry the burden of family and informal care when social security systems are either absent, restructured or downsized.
Given the existing lack of integration between social and economic policies, much attention has recently been been focused on providing safety nets in economic crises. According to the framework I have outlined, more attention needs to be paid to developing integrated social and economic policies that aim at preventing the crises in the first place and developing permanent social protection systems. In the meantime, of course, affordable and appropriate safety nets are needed to reassure populations that the negative consequences of economic reforms and downswings in some activities will not fall disproportionately on them. However, such safety nets should not be viewed as a substitute for basic social policies, and their financing during crises should not crowd-out spending on human capital or on more permanent schemes of social protection. Ideally, they should evolve into elements of a more permanent social security system.
Finally, new institutions are required to support the development of integrated policy frameworks. These institutions are necessary to encourage social actors to speak for the poor, coordinate economic and social authorities, make the social effects of economic policy highly visible and, most importantly, effectively mainstream social objectives into economic policy-making. Explicit recognition and analysis of the effects of public sector budgets and tax reforms on equity, of monetary policies on employment, of trade policies on regions and social groups, of technology and credit policies on small firms, and the explicit incorporation of such analysis into policy design in all of these areas, are some of the required effects to effectively mainstream social objectives into economic policy. The lack of such institutions is a deeply felt problem and a major impediment to progress in many countries.
Rising inequality is making the social integration goals of the World Social Summit all the more difficult to achieve. Yet it is essential that every effort be made to develop, reinforce and sustain institutions and mechanisms that encourage social integration. Social cohesion and solidarity is a fundamental condition of social progress and economic development.
More generally, fuller progress in tackling the agenda of the World Social Summit will require a major effort at all levels –national, regional and international—in accepting, promoting and demanding that priority be given to more effective social investment efforts. Progress towards achieving the eighth goal of the Millennium Declaration –building a global partnership for development—is especially pertinent. The most important components of this goal relate to trade, debt relief and aid. In this regard, the High-Level Dialogue on Financing for Development latter this month will provide the General Assembly an important opportunity to review the follow-up to the Monterrey Consensus and to chart the next steps by all stakeholders to ensure increased domestic and international resources for economic and social development.
I have tried to make a case for integrating social and economic policies, for linking growth with equity and for making the social dimensions of economic policy explicit in the decision making process. Development is a long-term, complex pursuit. It cannot be approached from a purely technocratic vantage point. As guardians of the social agenda, you and your colleagues in the Third Committee have a special responsibility in ensuring this agenda is better understood and is effectively translated into action. My Department and I look forward to collaborating with you in this crucial endeavour.