Extremes of poverty and wealth

Social cohesion is attracting considerable attention among policy makers across the world. The global recognition of its importance comes against a background of rising sentiments backed up by alarming evidence that the fruits of growth are not being equally shared. The corrosive effects of deep inequalities in both developed and developing countries are increasingly visible in social discontent and declining levels of trust in governments, and have largely impacted on the 2030 Agenda which has taken the focus away from poverty and given greater attention to social cohesion.

Social cohesion impacts on poverty reduction by sustaining long-term growth (growth sustainability) and by ensuring the inclusion of the disadvantaged in the growth process, and greater equity in the distribution of its benefits (growth with equity). While growth paths are indeed necessary to reduce poverty, they are unlikely to be sustainable in contexts where social cohesion is low or deteriorating. At the same time, economic growth in which social inequalities are wide, exclusion widespread and the scope for voicing dissent small is unlikely to contribute much to poverty reduction.

Enhancing social cohesion is equally relevant in advanced Organisation for Economic Co-operation and Development (OECD) countries and in developing countries where inequality within countries remains high and much wider than in OECD countries. For example, Brazil has made considerable progress in reducing the income gap but it is still 50 to 1, and in South Africa, inequality now stands at over 100 to 1.3. In Southeast Asia, inequality is exacerbated by the region’s large informal labour markets where earnings are typically low. There is mounting evidence to suggest that rising income inequality goes hand-in-hand with increasing inequality in education, health status, job quality and even life expectancy. Thus there is a clear need to discuss what can be done for countries at different stages of development to foster social cohesion as a valuable goal in itself and as a means of sustainable poverty reduction.

(https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2017/04/Alexandre-Kolev-OECD-inputs-to-UNDESA-poverty-expert-meeting4may2017.pdf)