FEALAC 25years fealac

Inequality is capturing the world’s attention. Despite sustained economic growth, millions of people in the 36 FEALAC Member Countries continue to live in poverty with many more in vulnerable situations. Gains from economic growth, globalization and improvement of access to basic services have disproportionately benefitted the already privileged, rather than the poor, marginalized and vulnerable. Rapid technological advancements especially those driven by Artificial Intelligence (AI), cloud computing and internet of things threaten to exacerbate inequalities by reducing the demand for low-medium skilled workers and increasing the returns for high skills and capital.

Gaps between the rich and the poor have indeed continued to grow or remained at concerningly high levels. While Latin American countries have made some progress in containing or even reducing income inequality, Asia and the Pacific is heading the opposite direction, albeit from lower levels. In most countries in the region, the richest 10 per cent are earning at least 10 times the income of the poorest 10 per cent. In China, Malaysia and Thailand, the income of the top 10 per cent is between 15 to 20 times that of the bottom 10. The top 5 countries, in the world, with the highest wealth concentration to the top 1% are now in Asia and the Pacific, three of which are FEALAC Member Countries (Thailand, China and Indonesia).

Inequality is also multidimensional. Beyond income and wealth, it is also manifested in other, non-monetary forms and dimensions, also referred to as inequality of opportunity. For example, large gaps in access to health care, education and basic household services persist between different population groups across countries.

If left unchecked, ongoing inequality trends will have serious repercussions on societies and on efforts toward achieving the 2030 Agenda for Sustainable Development.

The 2030 Agenda for Sustainable Development recognized these risks and identified inequality reduction as both a stand-alone goal (Goal 10) and a cross-cutting objective critical for reaching many other goals. The pledge by world leaders to “leave no one behind” and “reach the furthest behind first” strongly carries the spirit of inclusion and a people-centred approach.

Despite an increasing body of knowledge on the drivers and consequences of high inequality, development partners, researchers and policymakers continue to struggle to identify and prioritize policies that are truly effective in reducing inequality and enhancing social cohesion.

ESCAP and ECLAC share a history of collaboration on these topics, having worked together through three interregional Development Account projects on ways to reduce inequality, including through strengthening social protection systems. Given the rich experience of ECLAC countries in establishing social protection schemes and the recent surge of similar initiatives in the ESCAP region, it is important to develop a common understanding and a shared body of knowledge on what strategies work best in a fast-developing country context and how to operationalize those strategies.

While creating a shared understanding among policymakers in FEALAC Member Countries, this project will also develop new hands-on tools needed to measure multidimensional inequality and to identify the most marginalized groups (those at risk of being left behind). The project will also assess and uncover creative solutions and policies for eliminating inequality of opportunity.