The Covid-19 pandemic has called into question some of Africa’s findings. Only united and coordinated actions on the entire planet could make it possible to avoid a social, environmental and political catastrophe.
The Covid-19 crisis has significantly accelerated the double divide that already threatened fragile social balances around the world: first in countries where the income gap between the most modest and the most privileged has widened further, then between the so-called “rich” countries and developing countries. The resulting social disruption, if not resolved through renewed multilateral efforts, could have major consequences for the economy and society.
Research from the International Labor Organization (ILO) shows that the most vulnerable sections of the population have been disproportionately affected in the form of job losses or declining incomes, while those with higher incomes continue to thrive. What is less remarkable is that the pandemic has also regretted some of the previous gains.
Jump fifteen years back
In particular, the process of catching up with developing countries seems to have stalled. The IMF’s recent economic outlook shows that developing countries’ average incomes per capita per capita for the first time since the turn of the century has declined faster than in advanced economies in the period 2020-2021. According to this study, Africa and large parts of Asia, with the exception of China, have jumped fifteen years back, Latin America seventeen years and the Arab world almost two decades.
Unequal access to vaccines and medical treatments against the virus is, of course, a major obstacle. But that’s not all. The fact that low-income countries lack the fiscal space to introduce the kind of social protection and employment programs that have helped to mitigate the effects of the crisis on income levels in life elsewhere is equally important. The result is not only higher levels of poverty and growing job insecurity, but also great macroeconomic vulnerability for the world.
The trend showing that new generations will live a harder life than their parents has increased
It should also be noted that once they are found, studies show that the new generations will live a harder life than their parents. And the trend has increased compared to before the Covid era. This feeling of insecurity has spread due to the health situation. According to a Gallup survey, the proportion of workers worried about their future has increased almost continuously over the past decade, reaching 40% by 2020.
Of course, structural trends are also in place. The successive waves of Covid-19 imposing restrictions and restrictions on the free movement of people have greatly affected the educational opportunities of low-income groups. The fact that young people have entered the labor market during this difficult period is another major concern.
Finally, the prospect of removing the many barriers that hamper women’s role in the economy is further delayed. Keep in mind that women today receive just over a third of total work income, while the rest goes to their male colleagues, according to the latest survey conducted by the World Inequality Lab.
This huge gap is all the more dangerous for the social contract, as it complicates the task for policy makers seeking to meet long-term challenges and, above all, environmental issues. In fact, the transition to a greener economy has social costs that should be examined directly, clearly. Compensation for the “losers” of the transition may not be the only solution given the massive redistribution that this would entail. Pre-distribution is also paramount, and therefore well-designed decent work plays policies that bring stability to the workers and pave the way for sustainable businesses.
The risk is the spread of counterproductive solutions, such as vaccine selfishness
Another likely consequence of this large gap risks being the proliferation of counterproductive solutions (withdrawal, unilateralism, etc.). This can already be seen in the emergence of narrow nationalism marked by xenophobia and the construction of several barriers to international trade and investment. Vaccine selfishness is another example despite the UN’s efforts to convince the world that “no one will be safe until everyone is safe”.
Ultimately, social imbalances risk undermining economic growth if left unchecked, risk advancing environmental goals and exacerbating geopolitical tensions. Let us not forget that social justice, a precondition for peaceful relations, constitutes a global public good.
To get out of this big hole from above, we need to make globalization work for everyone. As with the environment, isolated actions on the part of countries can in themselves hardly counteract the polarizing forces in global markets left to themselves. The rapidly growing digital economy poses a risk of social dumping.
Reasoned globalization should ensure decent work for all women and men.
Experience also shows that isolated tripartite policies aimed at promoting quality jobs can be ineffective if competition offers low wages and poor working conditions. Finally, international tax competition is eroding the funding base for social protection systems. In other words, justified globalization should place decent work for all women and men at the center of its concerns. It goes without saying that employers and workers as actors in the real economy must be involved in such a process. Governments can stimulate this energy if they engage in a coordinated effort to strengthen the ILO’s standard system, firstly to establish a threshold for social and working conditions and, secondly, to strengthen coherence with other parts of the multilateral system.
This can be achieved by convening a world community conference involving all major global actors and social partners. A global social contract is the best way for humanity to regain its dignity and escape the demons that threaten it in this turbulent time.