Inequality and institutionalizing Civil BRICS Process

Inequality is a sign of lack of opportunity - a reflection of persistent disadvantage for marginalized sections of society.

Written by Prabhakar Reddy Tada | New Delhi | Updated: October 17, 2016 5:23 pm
brics-759 Prime Minister Narendra Modi with, left to right, Brazilian President Michel Temer, Russian President Vladimir Putin, Chinese President Xi Jinping and South African President Jacob Zuma addressing the BRICS Business Council meeting during BRICS Summit in Benaulim, Goa on Sunday. PTI Photo

The first BRICS CSO’s forum termed as ‘Civil BRICS’ was held in Ufa Russia in July 2015 and the second one was organized in New Delhi during 28-29 July 2016. The civil society leaders not only from BRICS countries but also from Argentina, Mexico, Indonesia, Egypt participated in the meeting which is a much sought after coalition. The need for institutionalizing the civil society engagement in BRICS process is explained in two ways. First, the participation of broad civil society at various levels encompassing the NGOs, their networks and individuals in BRICS process would enable establishing effective channels of communication between the government and the civil society in a constructive manner ultimately resulting in ‘transparency’ and ‘accountability’ in development aid and cooperation among others.

Secondly, the civil society engagement with the BRICS process would not only provide an opportunity to participate in governance and decision making process, but also empower them to establish institutional arrangements that are required to leverage experiences from different sectors and nations for understanding the implications of their efforts and its impact in reducing inequalities. Besides, the civil society participation help in reducing inequalities inherent in different emerging economies by influencing the New Development Bank (NDB) through governments, in advancing loans to the pro-poor projects with social and environmental impact assessments while achieving aid effectiveness and development cooperation etc.

Inequality is a sign of lack of opportunity – a reflection of persistent disadvantage for marginalized sections of society. Widening inequality has significant implications for growth and macroeconomic stability. It can concentrate political and decision making power in the hands of a few, lead to a suboptimal use of human resources, cause investment reducing political and economic instability. Some degree of inequality may not be a problem in so far as providing the incentives for people to excel, compete, save and invest to move ahead in the life. However, high and sustained levels of inequality especially ‘inequality of opportunity’ can entail large social costs. Besides, entrenched inequality of outcomes can significantly undermine individual’s health, educational and occupational choices among others. Hence, the role of civil society in BRICS process is critical in lobbying with the NDB and other development institutions, institutionalizing the process for ensuring aid effectiveness and development cooperation that would eliminate inequalities ultimately.

Inequality as the Agenda

In fact, rapid reforms and rising inequalities are co-existing in Indian economy while drivers of inequality are ignored by the concerned authorities. The tax-GDP ratio is low (17.3 per cent) when compared to many other countries and similarly social sector expenditure too. According to the World Bank report, health expenditure as a percentage of GDP was just 1.4 per cent in 2014 while education expenditure as a percentage of GDP was 4.3 per cent in 1999 which declined to 3.35 per cent in 2012. As regards employment of labour, there is a combination of slow and poor quality job creation that has resulted in a bloated informal sector with poor productivity and security. Since good quality formal employment is rare, access to it is extremely unequal. The disadvantaged social groups such as Scheduled Castes (SCs) Scheduled Tribes (STs) and large sections of the Other Backward Classes (OBCs) are mostly concentrated in low productivity sectors such as agriculture and construction and in low paying jobs as casual labourers while Muslims are concentrated in petty low productive self-employment.

Hence, one of the major concerns of the civil society organizations is the widespread inequality process in which the rich are becoming richer while the poor are becoming poorer. Inequality has taken various forms like income, race, religion, gender and caste leading to differential access to government services and finally inequality of opportunities to the marginalized sections. Hence, the civil society that is pro-poor has taken steps working towards inclusive growth and even development in the new world economic order.

Now that India is chairing the BRICS process and organizing the BRICS meetings this week in Goa, it is an opportune time for the civil society to voice the concerns of the poor and marginalized in reducing the economic and gender inequalities in a holistic manner. In a recent meeting in Delhi, the civil society representatives from the BRICS countries pledged to commit working towards a meaningful dialogue with the government and the private sector for ensuring pro-poor outcomes.

Implications for the Poor

The supporters of developing world’s most coveted club have reason to be optimistic for the broad consensus that they have achieved to improve coordination and to strengthen cooperation on international and regional issues of common interest. The BRICS group of nations account for 43 per cent of the world’s population, 46 per cent of the global labour force, and 25 per cent of the world’s GDP among others. More importantly, the countries together account for 50 per cent of the world’s poor. Therefore, it is important for the BRICS nations to engage with their citizens and civil society to get their feelings, aspirations and opinions about the process and expected outcomes which will have far reaching implications for the poor. As a result, the latter will be expected to influence the official outcome in so far as achieving pro-poor policies and functioning of development institutions that are created under BRICS process supposedly in favour of poor.

Further, it was felt that intra-BRICS currency trade for harnessing the potential of MSMEs, single window clearance scheme and visa on a long-term basis for genuine travelers would help in improving the trade and investment among these nations and prosper ultimately. In this context, the civil society is trying to influence the New Development Bank to have a priority of projects which are beneficial to the poor and marginalized sections of society in terms of improving livelihoods and their quality of life while ensuring prior environmental and social impact assessments. This is a precondition to build the civil society and the BRICS nations work towards achieving an egalitarian society and a new economic order which is devoid of inequalities and injustice.

The Way Forward

We need to organize more and more civil society organizations, networks, activists and individuals who could raise their concerns like transparency of BRICS process and accountability to the people for whom the governments are working. All these concerted efforts are expected to result in enhancing the aid effectiveness among nations and development cooperation leading to South-South cooperation. This, in turn, will help in reducing inequalities in emerging economies of the world.

(The author is a research manager at Oxfam India. Views expressed are personal.)