Development and Cooperation


	Contributions from the Column Focus Lost in transition – the difficulties of nation building “Belonging to a nation is not opposed to globalisation” Latin America: Aiming for social cohesion An ethics code for judges Sri Lanka: The glue that keeps people apart 04/2005		“Belonging to a nation is not opposed to globalisation” Social cohesion is a much debated term in Latin America. The average annual income of the region’s 500 million people is 1500 Dollars. But as bitter poverty persists nonetheless, governments are challenged to improve their performance. [ Interview with Enrique V. Iglesias, President of the Inter-American Development Bank ] Last year, the United Nations Development Programme sounded an alarm. According to its survey, many people in Latin America were disappointed with democracy and would favour authoritarian rule if that were to lead to more prosperity. Is that a reason to worry? The reasons for optimism outweigh the reasons for pessimism in Latin America. Democracy can be considered as consolidated in many countries of the region. Latin American citizens do not doubt the desirability of democracy. Like citizens in other regions of the world, they are just asking that their governments and elected officials be more responsive and effective. Why do distributions of income and wealth matter for the success of democratic governance? A more inclusive form of economic growth can help to broaden the legitimacy of democratic governance and limit the popular appeal of extremist approaches to dealing with social and economic problems. That reduces the risk of social polarisation and authoritarian politics. On what other issues does social cohesion depend? Social cohesion also depends on steady and inclusive growth of economic opportunities for the poor and the excluded, equalising access to high quality education, good health care and social protection systems, and improved democratic representation. What can and what should governments do to strengthen social cohesion? Aside from working to reduce inequalities in income and wealth, strengthening social cohesion depends upon improved efforts – to encourage sustained growth centered on the poor, – to avoid economic crisis, – to increase the efficiency and progressivity of social spending and, in some cases, – to raise the level of tax revenues. But, to support these efforts in social and economic development, simultaneous changes in respect to the underlying political and larger public institutional structure are needed. That includes modernising electoral systems, party systems and the congress so that they permit a more effective representation of all citizens in the political process. It also means ensuring the protection of the basic legal rights of all citizens through more accessible and efficient justice systems. How would you define adequate tax rates and adequate enforcement in order to fund a viable democratic state? These decisions depend upon many factors, including the country’s size, level of development, social needs, among others. But, clearly the revenues collected should be sufficient to support the provision of an adequate level of public services to allow the country to continually reduce poverty and social exclusion and to finance investments in infrastructure needed for the growth of business and employment opportunities. At the same time, due attention should be placed on enhancing the efficiency of service provision and expenditure management so that the revenues obtained are utilised to their full potential and the ethical underpinnings for tax compliance are supported. Should governments become active with the goal of redistribution? Yes, they should. The principal ways in which the government can promote greater social inclusion and reduce inequalities are: – to foster sustained economic growth, – to enhance access to economically valuable assets for the poor such as land, credit and high quality – infrastructure, and – to improve access to high quality education –and health care, and to enhance the equity and – efficiency of social spending. In many developing countries, not only in Latin America, the landed elite is quite comfortable with the way their societies are run and, therefore, cannot be expected to actively promote reform. This is particularly so in cases where they dominate national and local governments. What can diplomacy or development aid achieve in situations like this? Fortunately, the societies in our region have become quite complex today. The economic elite has potential areas of common interests in such objectives as political and economic stability, access to a more skilled workforce, and the protection of property rights. Leadership and development aid in some cases can encourage a broader national dialogue about development in which the government and the various social, economic and political actors can help shape near-term and longer-term priorities and help diminish the chances that a narrow group or set of groups can capture public policies to the disservice of the broader community. A great challenge for Latin America at this time of increased globalisation is to attract foreign investment. Elites increasingly understand that maintaining economic and political stability, enhancing human capital and strengthening the rule of law are necessary for promoting the country’s prosperity and their own. How can a sense of nationhood and a feeling of national inclusion be enhanced in our era of globalisation? After all, international standards are becoming ever more dominant in finance, economics, academia, politics and even sports. I would say that a sense of nationhood can be enhanced by combating social exclusion, which is a significant problem in Latin America and the Caribbean, evident in high levels of inequality and the marginalisation of certain population groups. The best way of enhancing a feeling of nationhood in an era of globalisation is, precisely, to promote social inclusion. The sense of belonging to a nation is not opposed to globalisation. Can one measure social cohesion precisely? It is very difficult to find a simple measure of what binds people of a society together. However, there are indicators to measure social cohesion to a certain extent. The experience of the European Union in defining a set of indicators to monitor efforts to improve social inclusion can serve as a reference point. Ten indicators were chosen, of which three were related to poverty, one to income inequality, two to employment, one to regional cohesion, one to education, and two to health. In addition, one could add a measure of the prevalence of violence. How does social cohesion relate to the notion of “social capital” – a term meant to describe the level of mutual trust and willingness to cooperate in any given society? Social capital can be seen both as an outcome of social cohesion and as a source of it. Extensive literature on social capital stresses the importance of community associations, social networks and group membership in building trust and cooperation. In countries where social cohesion is low, there exists a weak sense of social solidarity, reflected in narrow, inefficient patterns of taxation, little investment in human capital and social protection for the most vulnerable, and widespread lack of trust in others, which is measurable through opinion suveys. Furthermore, the high levels of inequality inherent to societies with poor social cohesion may lead to greater degrees of distrust, higher levels of crime or social polarisation, and ultimately to conflict. Questions by Hans Dembowski. Enrique V. Iglesias began his fourth five-year term as President of the Inter-American Devleopment Bank on April 1, 2003. He is a former Foreign Minister and Central Bank Governor of Uruguay. http://www.iadb.org