Why economic growth isn’t enough to solve the poverty problem

JOHN MICHAEL CARREON
JOHN MICHAEL CARREON

Last March, the Philippines welcomed nine delegates from the Danish Parliament.

The delegation, headed by Speaker of Parliament Mogens Lykketoft, met with high-ranking Philippine officials to discuss what House Speaker Feliciano Belmonte Jr. described as the “ever-deepening” cooperation between the two nations.

The visit was a follow-up to the formal reopening of the Danish Embassy in Manila in January 2015 after being closed since 2002.

A veteran politician, Lykketoft was a Cabinet minister for four consecutive terms, and led the Danish Social Democratic Party from 2002 to 2005.

His role as political leader, however, stretches beyond his country’s borders. Lykketoft is set to succeed Uganda’s Sam Kutetsa as president of the United Nations General Assembly (UNGA) in September.

Perhaps as recognition of his skills as a statesman, Lykketoft was the only nominee for the position, and will be officially appointed in June.

Asked how his experience in Denmark complements his forthcoming major role on the global stage, Lykketoft said: “The judgment the Danish government made was that it had a good case for getting this post if they announced a candidate that had a background as both Foreign Minister and Speaker of Parliament. In the end, this proved to be true.”

New poverty

While his main priority as UNGA president is to oversee the formulation of a broader set of “sustainable development goals” to succeed the current eight UN Millennium Development Goals (MDGs), he is very keen on preserving one in particular: environmental sustainability.

“Things have changed in the past 15 years. We are no longer just fighting extreme poverty brought about by a lack of public services. We are fighting against a new form of poverty, one caused by the unsustainable path of development that we, as a species, have chosen to embark on. The consensus is that it is impossible to continue without endangering not just ourselves, but future generations as well.”

Given the recent natural disasters that struck the Philippines, Lykketoft noted that the Filipino people know better than anyone the price humanity has paid for its actions.

Lykketoft’s first challenge as UNGA president is to oversee a series of high-level talks in September. The talks are in preparation for the United Nations Climate Change Conference, or COP21, set in Paris from Nov. 30 to Dec. 11.

Its goal is to achieve the first legally binding universal agreement on the issue of environmental sustainability, to be signed by all nations of the world.

On the probability of success of these gatherings, Lykketoft said he is “optimistic,” citing the US-China Carbon Emissions Agreement and the recent Franco-Philippine Climate Change Joint Declaration.

Consistent with the theme of sustainability, and in line with his experience with the Nordic Model, another issue Lykketoft wishes to address outside the current eight MDGs, would be the world’s rapidly
increasing economic inequality.

The Nordic Model is a set of socioeconomic policies by the governments of Denmark, Sweden, Norway, Finland and Iceland. It is characterized by high progressive taxation, high levels of public spending and low economic inequality.

Low poverty level

The result is that the Nordic countries rank consistently high on the Human Development Index, with some of the lowest poverty levels in the world.

“You cannot rely on economic growth alone, no matter how large, to eliminate poverty within a country,” said Lykketoft.

“One cannot simply expect that growth will be evenly spread between income lines. Governments, corporations, and wealthy members of society must take the necessary steps in combating the looming threat of economic inequality, both within and between nations. It is only through direct redistributive measures and the universal provision of public services that poverty can be effectively eliminated,” he stressed.

The dynamic between Brazil and Slovenia perhaps best characterizes the antecedence Lykketoft puts on combating inequality.

On the one hand is Brazil, an economic giant, the seventh largest economy in the world with a GDP of $3.073 trillion. On the other is Slovenia, the 80th richest country in the world, with a GDP of $62.515 billion. The belief that the wealthier nation’s citizens possess a higher quality of life proves to be false if one were to look at the data.

The Inequality-Adjusted Human Development Index (IHDI) ranks Brazil at 75th and Slovenia, 12th.

Crippling phenomenon

This reveals two things: Economic inequality is indeed a crippling phenomenon, and there is no correlation between the wealth of a nation and the quality of life its citizens lead.

Denmark, ranked 34th in terms of GDP and 8th in the IHDI, represents a rare case of having the best of both worlds.

No cookie-cutter solution

On the issue of potentially using the UNGA as a means of propagating the Nordic Model, Lykketoft replied: “It’s an interesting model, to say the least. It could be, to a certain extent, exported successfully to other nations. Each nation possesses its own unique set of problems, and what applies to us may not necessarily apply to them.

“The Nordic Model, by no means a cookie-cutter solution, contains some truths that apply universally—things like the importance of public services, universal education, and wealth redistribution, as well as the values of social cooperation, pragmatic compromise, and government transparency.

“The Nordic Model was not born overnight. It was the product of decades of hard work and communication between citizens and government. My hope is that, in the near future, more and more nations will have a healthy model they can proudly call their own,” said Lykketoft.

An important component of the delegation’s agenda was its March 5 trip to San Vicente, Palawan. The delegation observed the advances the local government has made to fortify the community against the adverse effects of climate change.

Delegates were taken on a tour of the various climate-change-related initiatives in San Vicente town. The group visited the site of a coral reef rehabilitation project, where corals are replanted to enhance existing stock and promote fish growth.

They were shown an agriculture demonstration farm where climate-change-resilient crop varieties are propagated to support the income of local farmers.

Lastly, the delegation got an orientation on the Rural Health Unit, an essential adaptation, given the adverse health impacts of natural disasters, particularly among the poorer members of the community.

All these endeavors fall under the broader Ecotown Demonstration Framework Project, a joint project between the Philippine Climate Change Commission and the Global Green Growth Initiative, an international treaty-based organization, of which the Philippines and Denmark are members.

In the Philippines, where citizens spend almost every waking hour vulnerable to the next tragedy, it is very easy to lose faith. Ours is a history riddled with pain, after all.

Though at times it may seem that the Philippine archipelago never fails to draw the short end of the stick, the words of Lykketoft could prove to be the spark of hope we so crave.

“The Philippines is a young nation, with a young population and a young perspective. What you have is a clean slate. Because the Philippines is not fully industrialized, you have not made the same mistakes as nations in other parts of the world. You have so much energy, energy that other nations could only dream of having. And that is why the future of the Philippines is bright.”

In those words, we believe that there is much truth to be heard. This bright future, however, is not our birthright.

Victory is the child of perseverance as much as circumstance. As Malcolm X once said, “The future belongs to those who prepare for it today.”

With the energy of the youth and the wisdom of our elders, the Philippines should beat the odds and emerge triumphant.

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