Reducing inequality

Unlike India and the US, and many other countries, some countries clearly have been better positioned to weather today’s pandemic. Consider Thailand, where the official Covid-19 death toll remains below 60. The country provides universal healthcare. It also does so by spending only $277 per capita on health. The US, in comparison, spends $11,000 per capita on its famously privatised system.

Or consider South Korea, which responded to the pandemic by instituting universal emergency relief payments for 22 million households. The country in recent years has boosted the minimum wage, increased taxes on the richest while boosting spending on health and education. That is inequality-busting leadership. Spain, where I live, has shown how progressive policies are possible in introducing a permanent basic income for over two million people.

Moreover, some countries are recasting their entire strategies to tackle inequality. New Zealand, another success story of the pandemic, has centred its entire budget on ‘wellbeing’ to tackle issues like child poverty, challenging the old and stubborn obsession with the gross domestic product (GDP) and little else. Vietnam, meanwhile, is considering making reducing inequality core to its upcoming 10-year plan – which would be a welcome step.

And so, the lessons are clear.

First – that governments need to get a handle on inequality. It is not inevitable, like rain from the heavens. It comes down to government choices – as the pandemic profoundly exposes. The ability to go to the hospital, or have a safety net when losing your job, has shaped our experience of this pandemic. That governments have done too little to tackle inequality has made us less safe.

Second – that governments rich and poor have huge scope to act. If Sierra Leone – a poor nation – can make bold reforms to make secondary education free and clamp down on tax evasion by mining companies, or if Costa Rica has been able to achieve near-universal primary healthcare in 10 years, so can others. It is clearer than ever that political will, not sound economics, is the barrier to change.

And third, that governments can better reduce inequality within their borders if they cooperate across them. Governments would be wise to act together on areas of common interest – expanding protection to workers, providing debt cancellation to poor countries and pursuing solidarity taxes on wealth and income. International cooperation is vital to avert the kind of austerity we saw after the global financial crisis, and we are likely to see promoted after the pandemic.

The perils of the pre-Covid-19 era, in which taxes and labour rights were lowered and public goods were privatised in the pursuit of limitless growth, has been readily exposed. The enduring legacy of the pandemic must be a new race to the top, in which governments cooperate in their shared commitment to reducing inequality.

Excerpted from: ‘The lesson from the pandemic? We need to tackle inequality’

Aljazeera.com