Rosary Sisters’ High School Model United Nations

ROSMUN 2018

Economic and Social Council

Bridging the Economic Gap Between Developed and Developing Countries

Nicole Hazou

Introduction In developing countries, more than 75% of the population is living in societies where income is shifting to be more unequally distributed than it was in the 1990s; therefore, economic and social developments are elements that are yet to be attained in our modern societies. The economic inequality, which could also be signified as the income inequality, wealth inequality or wealth gap, is the imbalanced dispersion of wealth, income, and consumption among countries and within societies. This steep economic divide affects local and regional policies harming growth, poverty eradication, and the quality of relations in the political spheres, all of which affect people’s wellbeing. One of the United Nations’ main mandates and directives is the development of employment, standards of living, and regions’ economic and social conditions. Moreover, in hopes of achieving sustainable development, it is highlighted by the Sustainable Development Goal 8 that we aim to: “promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.”

Picture Source: http://www.broadbentinstitute.ca/the_wealth_gap Background Information The divide between developed and developing countries in standard of living, health care, and education places some countries on the top of the Human Development Index (HDI) and other countries at the very bottom making them among the least developed. Most of the countries with low development are in Africa which leads to huge disparities in development. Countries with emerging economies such as India and China have demonstrated significant economic development and growth, but these economies still have gaps between the rich and poor. Such inequality, if not narrowed, would still pose a challenge to these emerging economies. Developing countries face numerous obstacles which hinder development including income inequality, weak financial system, poor health care and educational attainment, tax and trade policies among other factors related to lack of stability and security in many countries which lead to lack of investment. The economic crisis also affected many countries across the world and widened the income gap between the rich and poor at a national level and across countries. Many

developing countries do not have sound poverty reduction policies, or they have low level of education which consequently hinders ensuring skilled labour; furthermore, the gender gap, digital gaps, increased population growth affect development tremendously. About the Human Development Index (HDI): The Human Development Index (HDI), a composite statistic, is crafted with the directive of highlighting that people should be the definitive principle for evaluating the growth of a country, and not the economy and its progress alone. Moreover, the United Nations Development Program (UNDP) assesses countries’ yearly development, in accordance to its Human Development Index (HDI), measuring capacities of citizens’ access to healthcare, education, and many other fundamentals. It is paramount to state that the human development index provides a straight forward image of the unbridged disparities in developments in different global areas. So, while 37/ 46 states graded with having low human development are African (not to mention that all 5 countries ranked with the lowest HDI rankings are African countries), 32/47 states with the highest human development are in Europe. Furthermore, many emerging countries like India have helped lift their populations from complete poverty through a period of strong economic development. The following figure (retrieved from the Human Development Reports) shows the dimensions of the Human Development Index (HDI). Picture Source: http://hdr.undp.org/en/content/human-development-index-hdi

Aspects of the issue:

- The 3- Dimensional concentration on income inequality has been rising more than ever everywhere, especially since income inequality is one major aspect of the economic gap between communities and countries worldwide. Income inequality is basically the imbalanced distribution of incomes and wages among the population. Those countries that have developed a well- functioning financial system, are the ones experiencing a fast, sustained economic growth. However, the income inequality in The Organization for Economic Co-operation and Development (OECD) countries has been at its highest peak for the past 50 years. The standard income of the wealthiest 10% of the population is about nine times than that of the poorest 10%. In fact, the income inequality has only dropped in Turkey, Chile and Mexico. As for the dynamic emerging economies, only Brazil managed to effectively decrease the inequality; however, the gap between rich and poor remains to be around five times that in the OECD countries. Even though the issue of income inequality still remains a major challenge in Latin America, most countries have proved to significantly reduce income inequality. Moreover, as a result, Latin America has experienced an enhancement in the level of education and the implementation of a great transfer income programs for poverty reduction.

- It is also fair to mention that in progressive or emerging economies, the income

inequality, health and life expectancies remains within countries and populations rather than across countries. There are large disparities in income from one city to another. As for the developing world, many children die in rural parts under the age of 5 as result of inadequate access to health care, and lack of education of mothers. When discussing the issue of economic gap between countries, it is essential to mention the large regional differences, but also to not forget that despite the significant development in numerous countries, access to health care differs with sex, age, geographic area, etc.

- Inequalities arising in the education job market put many people at many

disadvantages. This happens because poorer students usually struggle to compete with wealthier classmates. In fact, governments must consider investing in education and guidance as this will provide a future with better economy and general wealth and affluence. Evidence-based PISA and PIAAC initiatives focus on the huge disparities in education and skills by demonstrating the major possible advantages to prepare disadvantaged groups through obtaining better skills and therefore compete for better-paying jobs. Also, it is significant to keep in mind that inequality can

encourage highly skilled people to migrate from poor to rich countries for better job opportunities.

- In the upcoming years, developed and developing economies need to work hard and

together so as to shift the world towards more inclusive development forms, since the increasing number of populations will result in gaps and disparities in the economy.

- Unequal access to health care has resulted in women dying while giving birth in

rural areas at a much higher rate than those in urban centers. In addition, persons with disabilities are five times more likely to be experience disastrous health expenses.

Tax Policy: The tax policy has a particular significance in directing inequality and boosting and developing economic growth. Therefore, sustaining the general progressivity of the tax code is important in this regard. Not to mention, countries worldwide are currently coming together to collaborate on different international tax issues. One of the main headlines on the agenda is to diminish the capability of rich people and organizations to convert assets and income taxes abroad. Major Organizations Involved:

United Nations Development Program (UNDP): The United Nations Development Program plays a vital role in the issue of the economic gap. This includes the report named Humanity Divided: Confronting Inequality in Developing Countries, prepared by the Poverty Practice in the Bureau for Development Policy, UNDP. Also, through its annual assessment; the United Nations Development Program (UNDP) assesses countries’ yearly development, in accordance to its Human Development Index (HDI). Therefore, UNDP aims to achieve sustainable development through achieving bridged gaps.

The Organization for Economic Co-operation and Development (OECD): The Organization for Economic Co-operation and Development (OECD) is an intergovernmental economic organization. Founded in 1961, it has 35-member countries including: Australia, Austria, Belgium, Canada, Chile, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, South Korea, Latvia Luxembourg, Mexico, Netherlands, New Zealand, Norway,

Poland, Portugal, Slovenia, Spain, Sweden, Switzerland, Turkey, United Kingdom and United States of America. The aim of this organization is to stimulate economic development and world trade. In accordance to the list, most OECD members are countries that are considered as developed countries with high HDI rankings.

United Nations Children Fund (UNICEF): A UN organization with the main target of the development of children through the provision of health care, nutrition and basic education.

World Food Programme (WFP): The world’s largest international food aid organization for development.

United Nations Population Fund (UNFPA): Tackles issues related to population. World Bank: The World Bank provides assistance to developing countries especially financial. It aims at reducing poverty and assisting in development in addition to providing policy advice.

Previous Attempts to Solve Issue: Previous attempts to solve issue:

a. UN Resolution: 2011/ 6; Mainstreaming a gender perspective into all policies and programmes in the United Nations system.

b. Achieving sustainable development through the Sustainable Development Goals (SDGs) and particularly in goal 8 which states: “promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all”.

c. In its Paragraphs 143-157, the consequence document of the Rio +20

Conference which expresses its concerns about labour market conditions and the widespread deficits of available decent work opportunities. At the same time recognizes the existing linkages among poverty eradication, employment and urges all governments to address the global challenge of youth employment.

d. The global challenge of youth employment is remembered by the Plan of Implementation of the World Summit on Sustainable Development adopted in Johannesburg in 2002.

e. JPOI highlights the importance of providing assistance to increase income-generating employment opportunities, taking into account the Declaration on Fundamental Principles and Rights at Work of the International Labour Organization.

f. JPOI reads “Good governance is essential for sustainable development. Sound economic policies, solid democratic institutions responsive to the needs of the people and improved infrastructure are the basis for sustained economic growth, poverty eradication, and employment creation. Freedom, peace and security, domestic stability, respect for human rights, including the right to development, and the rule of law, gender equality, market-oriented policies, and an overall commitment to just and democratic societies are also essential and mutually reinforcing".

g. Chapter 3 of Agenda 21 highlights the need to eradicate poverty and generate employment opportunities.

h. ECOSOC special meeting on equality on 30 March 2016, to discuss the

profound impact of inequality on sustainable development.

i. #StopTheRobbery campaign by UN Women to raise awareness of the unequal gender pay gap.

j. Report of the Secretary-General, "Progress towards the Sustainable Development Goals", E/2017/66

Possible Solutions: When considering the implementation of solutions to tackle the inequality, it is important to keep in mind that the main influences on people’s wellbeing are local issues including employment, access to health care services, pollution, and security. Addressing policy issues then targeting the root causes of inequality directly will be more effective and by improving the understanding between the local policy implementations and eventually the outcomes in the people’s welfare. The following could possibly be viable in tackling inequality:

- Reducing taxes on low income laborers - Improving the standard of living in a country - Creating more job opportunities - Improving financial systems - Closing the gender gap - Addressing rural urban division - Considering Microfinance - Formulating anti-poverty plans - Bridging the digital divide - Improving access to financial services and improved role of banks in combating

poverty - Investing in infrastructure, health and education - Improving collaboration between private and public sectors - Capacity building - Investing in family planning - Addressing root causes of conflict and ensuring security and stability in countries.

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