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High Levels of Inequality Putting Latin America’s Future Generations at Risk

MD Staff

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Returning economic growth across Latin America could mask serious economic challenges for future generations, according to the World Economic Forum’s Inclusive Development Index (IDI). The index seeks to provide leaders with a more accurate picture of an economy’s health based on inequality, debt and environmental burdens placed on future generations as well as economic growth.

The 2018 assessment was undertaken following two decades of solid economic activity. During this time, expansion of access to education and government transfers contributed to reducing the level of income inequality in Latin America. While these developments and measures have helped to narrow the income gap between skilled and unskilled workers, Latin America remains among the most unequal regions in the world.

“Economic approaches need to emphasize the well-being of future generations and inclusion as key priorities for Latin American economies, and many countries lag behind their peers according to the Inclusive Development Index. As countries move out of recession, they should seize the window of opportunity for speeding up reforms to this end,” said Margareta Drzeniek-Hanouz, Head of Future of Economic Progress, Member of the Executive Committee.

The index’s findings provide a fresh lens through which to examine the region’s economic challenges. While 2017 finished on a positive note with recessions ending in Brazil and Argentina, modest rises in economic activity and efficiency over the past five years and a projected growth rate of 1.7% in 2018 will be insufficient to alleviate the region’s sustainability concerns and support a robust rise in median living standards.

The World Economic Forum believes that building inclusive societies is essential for long-term economic growth. With elections in Brazil, Chile, Colombia, Costa Rica and Mexico in 2018, governments are urged to prioritize proactive strategies to further reduce levels of inequality and ensure the well-being of future generations.

Key findings

According to the index, the most inclusive Latin American economies are Panama, Uruguay, Chile, Costa Rica and Peru. Panama made great strides in reducing its carbon intensity of GDP, down 39.7% from five years ago. The country also has the second highest level of labour productivity in the region after Chile.

Adjusted net savings, which measures the true rate of savings in an economy after taking into account investments in human capital, depletion of natural resources and damage caused by pollution, has declined in one-half of the Latin American economies ranked in the index, with Bolivia, Brazil and El Salvador performing the worst on this indicator.

Moreover, public indebtedness as a share of GDP, which roughly illustrates the scale of borrowing by the current generation against the capacities of future ones, has increased in every country, notably in Brazil (+16%) and Mexico (+14.9%) over the last five years.

Although income inequality has declined in 14 out of the 16 Latin American countries ranked in this year’s IDI, the region accounts for 11 out of the 25 developing economies with the highest levels of income inequality.

Latin America’s largest economies

Ranking 23rd, Argentina’s overall score is supported by its performance on inclusion and intergenerational equity and sustainability. The indicators of economic growth and labour productivity are on the decline as the IDI data predate the current recovery. While Argentina’s income and wealth inequalities are relatively low compared with other Latin American countries, these disparities have been shrinking in recent years. The net income and wealth Gini indicators have dropped nearly 5% and 10%, respectively, over the last five years. Furthermore, the median household income in Argentina ranks in the top quintile of emerging economies in the sample. Although the employment rate is relatively low compared with the regional average, it has increased slightly despite the recent recession.

Mexico’s performance, ranking 24th among emerging economies, is driven by its higher score on intergenerational equity and sustainability. Through the lens of the IDI framework, this is in part due to a higher savings rate and low carbon intensity in national production. The country performs comparatively well across the board on growth and development factors, ranking 13th out of 74 emerging economies. It performs in the top quintile among Latin American countries in terms of labour productivity. In contrast, inclusion measures illustrate high levels of economic disparity, although they have shrunk over the last five years.

Brazil ranks 37th out of 74 emerging economies on this year’s IDI. Brazil’s overall score in the index is pulled up by its performance on intergenerational equity and sustainability. The country benefits from a highly favourable dependency ratio and relatively low carbon intensity. With the IDI data reflecting the period preceding the economic recovery, growth and development indicators, such as GDP per capita growth, labour productivity and employment rates, are trending negatively. Nonetheless, median household income levels appear to have improved throughout this period. Wealth concentration in Brazil is among the highest in both Latin America and emerging economies and has increased slowly over the past five years. With the Brazilian economy slowly recovering, growth and development factors in the IDI are expected to improve; trends may also be affected by the growth-enhancing reforms proposed by the government to address its fiscal constraints.

The Inclusive Development Index

The IDI is published by the World Economic Forum’s System Initiative on Shaping the Future of Economic Progress, which aims to enable sustained and inclusive economic progress. It seeks to achieve this through deepened public-private cooperation, thought leadership and analysis, strategic dialogue and concrete cooperation, including by accelerating social impact through corporate action. The Latin American countries ranked in this index are Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala Honduras, Mexico, Nicaragua, Panama, Peru, Paraguay and Uruguay.

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Americas

In Praise of the Lioness of Law: Ruth Bader Ginsburg and her Jurisprudence

Punsara Amarasinghe

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image credit: Wikipedia

The death of the US Supreme Court Judge Ruth Bader Ginsburg has created an abyss in the court for the liberal voice where justice Ginsburg was seen as the linchpin of the liberal block of the Supreme Court at a time when that block was shrinking. Especially late judge had vociferously advocated for women ‘rights, environmental issues and often came up with unique dissents in delivering her judgements which were propelled by her jurisprudence which embodied the solemn ideal in American legal system “Equal Protection under the Law “. She was on a quest to defend the delicate balance between honoring the timelessness of American Constitution and recognizing the depth of its enduring principles in new centuries and under new circumstances.

She grew up in an era where men held the helm in every aspect of social life and especially the legal profession was utterly dominated by men. Recalling her legal studies at Harvard law school in the 50’s judge Ginsburg had stated later how she was once asked by the Dean of Harvard law school to justify her position as a law student that otherwise would have gone to a man. Yet she had the spunk to overcome all the obstacles stood on her way and excelled as a scholar becoming the first female member of the Harvard Law Review.

In tracing her legal career that it becomes a salient fact, Judge Ginsburg marked her name in American legal history even decades before she joined the bench. While at the American Civil Liberties Union in the early seventies she made an upheaval in American in legal system in famous Supreme Court Case Reed Vs Reed. In Reed Vs Reed the brief drafted by Ginsburg provided an astute analysis on the 14th Amendment to the US Constitution, the Equal Protection Clause. Ginsburg’s brief changed the aged long practice existed in the State of Idaho on favoring men over women in estate battles by paving the path for a discourse on gender equality rights in the USA.

Judge Ginsburg’s appointment to the Supreme Court in 1994 during Clinton administration marked the dawn of new jurisprudential chapter in the US Supreme Court. Two terms later, in the United States v. Virginia (VMI), Justice Ginsburg applied her lucid perspective to a sharply disputed constitutional claim. The United States challenged Virginia’s practice of admitting only men to its prestigious military college, the Virginia Military Institute. Writing for six Justices, Ginsburg held this policy unconstitutional under the Equal Protection Clause. In reaching this result, Ginsburg adroitly cut away potentially confounding issues about women’s participation in the military or the advantages of single-sex education.

Her robust activism in securing gender equality often attracted the admirations of the feminist scholars and activists, but it should be noted that her contribution was not only confined to the protection of gender equality. She was a robust critique of racial dissemination which still pervades in American society and she frequently pointed out how racial discrimination has marred the constitutional protections guaranteed to every citizen. Especially in the case of Gratz Vs Bollitnger, she stressed on the commitment that the state ought to fulfil by eliminating the racial biases existing employment and education. Moreover, disabled citizens. In Olmstead v. Zimring, she held that “unjustified institutional isolation of persons with disabilities is a form of discrimination” violating the Americans with Disabilities Act.45 She elaborated a two-fold concept of discrimination, noting that unneeded institutionalization both “perpetuates unwarranted assumptions that persons so isolated are incapable or unworthy of participating in community life”.

In remembering the mortal departure of this prudent judge that one cannot forget her keenness in incorporating international law into her judgements regardless of the disinclination shown by conservative judges like Antony Scalia. Going beyond the mere textualism approach to the law, Ginsburg’s jurisprudence was much more akin to using international law to make substantive decisions. For instance, in her concurring verdict in Grutter Vs Bollinger, Justice Ginsburg relied upon international human rights law, and in particular upon two United Nations conventions, to support her conclusions.

Indeed, the demise of Ruth Ginsburg is a major blow for the liberalists in the USA, especially in an era where liberalist values are at stake under the fervent rise of populist waves propounded by Donald Trump. Especially late judge had been one of the harsh critics of Trump even before ascendency to the Oval office. The void created by the demise of judge Ginsburg might change the role the US Supreme Court if the successor to her position would take a more conservative approach and it will fortify the conservative bloc in the US Supreme Court. Trump has already placed Justices Neil Gorsuch and Brett Kavanaugh and the third pick would more deeply entrench the conservative views in the US Supreme Court, which would inevitably undermine the progressive policies taken during Obama’s administration towards issues such as the environment. The political storm appeared after the death of the late judge has already created a tense situation in US politics as president Trump is determined to appoint a judge to fill before the presidential election in November.

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The Politics of (In)security in Mexico: Between Narcissism and Political Failure

Lisdey Espinoza Pedraza

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Image credit: Wikimedia

Security cannot be that easily separated from the political realm. The need for security is the prime reason why people come together to collectively form a state. Providing security is, therefore, one of the most basic functions of the state as a political and collective entity.

Last Friday, the Mexican president, Andrés Manuel López Obrador (AMLO) laughed during his daily morning press briefings over a national newspaper headline about 45 massacres during his presidency. This attitude summarises in a macabre way his approach to insecurity: it is not his top priority. This is not the first time that AMLO has showed some serious and deeply disturbing lack of empathy for victims of crimes. Before taking office, he knew that insecurity was one of Mexico’s biggest challenges, and he has come to realise that curbing it down will not be as simple as he predicted during his presidential campaign.

Since the start of the War on Drugs in 2006, Mexico has sunk into a deep and ever-growing spiral of violence and vigilantism as a result of the erosion of the capacity of the state to provide safety to citizens. Vigilantism is when citizens decide to take the law into their own hands in order to fill the vacuum left by the state, or to pursue their own very particular interests. Guerrero, Michoacán, Morelos, Tabasco, Tamaulipas and Veracruz have over 50 vigilante organisations that pose substantial danger to the power of the state.

Vigilantism is not the only factor exacerbating the security crisis in Mexico: since 2006, young people have also started to join drug cartels and other criminal organisations. There are important sectors of the population who feel that the state has failed to represent them. They also feel betrayed because the state has not been able to provide them with the necessary means to better themselves. These frustrations make them vulnerable to the indoctrination of organised crime gangs who promise to give them some sort of ideological direction and solution to their problems.

As a result, it is not enough to carry out a kingpin arrest strategy and to preach on the moral duties we have as citizens as well as on human dignity. People need to be given enough means to find alternative livelihoods that are attractive enough to take them out of organised crime, Mexico can draw some important lessons from Sierra Leone who successfully demobilised and resettled ex-combatants after the armed conflict. Vigilantism, recruitment by organised crime, and insecurity have also flourished because of a lack of deterrence. The judicial system is weak and highly ineffective. A large proportion of the population does not trust the police, or the institutions in charge of the rule of law.

A long-term strategy requires linking security with politics. It needs to address not only the consequences but also the roots of unemployment and deep inequality. However, doing so requires decisive actions to root out widespread and vicious corruption. Corruption allows concentration of wealth and also prevents people from being held accountable. This perpetuates the circle of insecurity. Mexico has been slowly moving towards a borderline failed state. The current government is starting to lose legitimacy and the fragility of the state is further perpetuated by the undemocratic, and predatory governance of the current administration.

Creating a safer Mexico requires a strong, coherent, and stable leadership, AMLO’s administration is far from it. His popularity has consistently fallen as a result of his ineffective policies to tackle the pandemic, worsening insecurity, and the economic crisis. Mexico has reached over 72,000 Covid-19 deaths; during his initial 20 months as incumbent president, there has been 53,628 murders, among them 1800 children or teenagers, and 5888 women (11 women killed per day) This criminality rate is double than what it was during the same period in the presidency of Felipe Calderón (2006-2012); and 55% higher than with the last president, Enrique Peña Nieto (2012-2018). Mexico is also experiencing its worst economic recession in 90 years.

Insecurity remains as the issue of most concern among Mexicans, seeing the president laughing about it, can only fill citizens with yet more despair and lack of trusts in the government and its institutions. AMLO’s catastrophic performance is not surprising, though. Much of his failures and shortcomings can be explained by both ideology and a narcissistic personality. Having someone with both of those traits ruling a country under normal, peaceful times is already dangerous enough, add an economic crisis and a pandemic to the mix and the result is utter chaos.

AMLO embodies the prototypical narcissist: he has a grandiose self-image; an inflated ego; a constant need for admiration; and intolerance to criticism. He, like many other narcissists, thinks about himself too much and too often, making him incapable of considering the wellbeing of other and unable to pursue the public interest. He has a scapegoat ready to blame for his failures and mistakes: previous administrations, conservatives, neoliberalism, academics, writers, intellectuals, reporters, scientists, you name it, the list is long and keeps getting longer.

AMLO keeps contradicting himself and he does not realise it. He has been claiming for months that the pandemic is under control: it is not. He declares Mexico is ready to face the pandemic and we have enough tests and medical equipment: we do not. He says Mexico is on its way to economic recovery: it is not. He states corruption is a thing of the past: it is not. He says Mexico is now safer than ever before: it is not. When told the opposite he shrugs criticism off and laughs, the behaviour of a typical narcissist.

AMLO, alike narcissists, due to his inability to face criticism, has never cared about surrounding himself by the best and brightest. He chose a bunch of flunkies as members of his cabinet who try to please and not humiliate their leader. A further trait of narcissistic personalities is that they love conflict and division as this keeps them under control. The more destabilisation and antagonism, the better. AMLO since the start of his presidency has been setting states against states for resources and for pandemic responses, instead of coordinating a national response. He is also vindictive: playing favourites with those governors who follow him and punishing those that oppose him.

Deep down, narcissistic leaders are weak. AMLO is genuinely afraid to lead. He simply cannot bring himself to make decisions that are solely his. This is why he has relied on public referendums and consultations to cancel projects or advance legislation. He will not take any responsibility if something goes wrong: It was not him who decided, it was the people, blame them. He inherited a broken system that cannot be fixed during his term, blame the previous administrations, not him.

AMLO is a prime example of a textbook narcissist, unfortunately he is not the only one: Donald Trump, Boris Johnson, Recep Erdogan, Rodrigo Duterte are only a few more examples of what seems to be a normalised behaviour in contemporary politics. Every aspect of AMLO’s and other leaders presidencies have been heavily marked by their psychopathology. Narcissism, however, does not allow proper and realistic self-assessment, self-criticism, and self-appreciation therefore such leaders will simply ignore the red flags in their administration and have no clue how despicably and disgracefully they will be remembered.

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Americas

Minor Successes And The Coronavirus Disaster: Is Trump A Dead Duck?

Dr. Arshad M. Khan

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That reminder from the Bible, ‘He who is without sin, let him cast the first stone’ may give us pause — but not journalists who by all appearances assume exemption.  And the stones certainly bruise.

Evidence for the bruises lies in the latest poll numbers.  Overall, Joe Biden leads Donald Trump 50 to 43 percent, a margin that has continued to increase since January.  It is also considerably wider than the few points lead Hillary Clinton had over Trump four years ago.  It gets worse for Trump. 

In the industrial states of Michigan and Pennsylvania, which Trump in 2016 won by razor thin margins, he is losing by over 4 percent.  Also key to his victory was Wisconsin where, despite his success in getting dairy products into Canada, he is behind by a substantial 7 percent.  Key states Ohio and Florida are also going for the Democrats.

Trump was not doing so badly until the coronavirus struck and during the course of his news conferences he displayed an uncaring persona larded with incompetence.  Dr. Anthony Fauci, the man he fired for correcting Trumpian exaggerations became a hero and Trump the bully.

If that bullying nature won him small rewards with allies, he hit an impasse with China and Iran … while bringing the two closer to each other.  Then there is the border wall, a sore point for our southern neighbor Mexico.  President Lopez Obrador made sure the subject never came up at the July meeting with Trump,   Thus Mexico is not paying for it so far and will not be in the foreseeable future.

The United Arab Emirates, a conglomeration of what used to be the Trucial States under British hegemony. have agreed to formalize its already fairly close relations with Israel.  In return, Israel has postponed plans to annex the West Bank.  Whether or not it is in Israel’s long term interest to do so is a debatable question because it provides much more powerful ammunition to its critics who already accuse it of becoming an apartheid regime.  However, it had become Prime Minister Netanyahu’s sop to the right wing who will have to wait.  Of course, the reality is that Israel is already the de facto ruler.

If Mr. Trump was crowing about the agreement signed on September 15, although it is akin to someone signing an agreement with Puerto Rico while the United States remains aloof.  As a postscript, the little island of Bahrain also signed a peace deal with Israel.  Bahrain has had its own problems in that a Sunni sheikh rules a Shia populace.  When the Shia had had enough, Saudi and UAE troops were used to end the rebellion.  Bahrain is thus indebted to the UAE.

How many among voters will know the real value of these historic (according to Trump) deals particularly when he starts twittering his accomplishments as the election nears?

There things stand.  As they say, there is nothing worse than peaking too early.  Bettors are still favoring Trump with their money.  The longer anyone has been in politics the more there is to mine, and for an opponent to use to his/her advantage.  Time it seems is on Trump’s side.  

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