Guided by the seductive but nebulous slogan “zero poverty”, the new government’s social policies seem to be aligned with the paradigm of “social protection floors” elaborated by the UN. Following the lines of the 1999 Global Pact, the 2000 Millenium Goals, or the 2009 Global Jobs Pact, different organisations dependent on the UN, led by the International Labour Organisation (ILO) and World Health Organisation (WHO), launched the Social Protection Floor Initiative in 2011 with the aim of promoting univesral coverage of basic food, health, education, and housing.
As nothing is decided until it reaches the first world, the trigger was the 2008 global financial crisis, which exposed the risks to governance and the threat of electoral swings towards the radical left or fascist extreme right in Europe.
In contrast to how it handles its finance, international relations, and repressive forces, the administration’s social policy direction has not been explicitly laid out by those in charge of implementing it, who we only saw briefly smiling at the swearing in ceremony. You have to dig deep into ministerial websites or call spokespeople to confirm that President Mauricio Macri’s philosophy on the matter broadly coincides with the UN’s initiative.
There is nothing wrong with that, at first glance. The criteria can be useful for low-income countries or for under-developed areas of countries in less dramatic circumstances. It helps explain two of the most important social advances during the cycle of leftist Latin American governments: in the Bolivian altiplano extreme poverty has fallen from 45.2% to 18% since Evo Morales took office, while in north eastern Brazil it has dropped from 22.9% to 7% under successive PT governments (Presidents Lula da Silva and Dilma Rousseff).
The question is whether this initiative is the best option for countries like Argentina.
For the last 25 years, the UN has had a Human Development Index (HDI), a political response to the dominance in economics of GDP as an indicator of well-being. The index was designed by two prized economists, Mahhub ul Haq and Amartya Sen, who not coincidentally were born in poor contries (Pakistan and India, respectively). The HDI is made of three components centred not on a country’s economy but its inhabitants, and which refer to the possibilities of living a long and healthy life (life expectancy), of gaining knowledge (average years of schooling), and of achieving a decent standard of living (per capita income). The combined result is an indicator that is easy to analyse and compare.
According to data from 2015, that is after 12 years of macroeconomic excess, populist policies, and social clientalism, Argentina has the highest HDI score in Latin America, and is ranked 40th in the world, above Chile and Uruguay (market favourites like Peru and Colombia appear well down the order). If this is adjusted for inequality – adding the distribution of income to the original components – Argentina drops eight places, just like other countries in the region (Chile falls 13), and is overtaken by several Eastern European states. If adjusted for gender equality, Argentina recovers one spot.
My point is that the Social Protection Floors perspective is insufficient for a middle-income country like ours. Without getting in to the debate over the actual levels of poverty, impossible now given the destruction of statistics agency INDEC that began under Kirchnerism and looks in danger of becoming a state policy, it’s evident that Argentina is very different from the sub-Saharan levels of poverty in rural Bolivia or northeast Brazil. It is also a long way from its own situation immediately after the 2001 crisis and even from the current situation in some parts of the north.
At the risk of exaggerating a little, we could say that it is relatively easy to advance quickly from a hyper-critical situation, as long as the economic climate is right. Thanks in large part to the work of the UN, governments can draw on a wide range of policies, programmes and measures to combat tragic scenarios.
The problem is with what economists have poetically called: “the middle-income trap”. Without the competitive advantages of very poor nations, which can use low salaries and a rapid expansion of the internal market as a vehicle for economic growth, or the levels of competitiveness and well-being of the developed world, intermediate states like ours run the risk of getting caught in a sort of development limbo.
There are no technocratic recipes for this type of situation and the few nations that have overcome this problem (Ireland, South Korea, Singapore) have done so via different methods: big or small state, focused on exports or the internal market, joinging regional blocs or protecting national industries. None of them, it goes without saying, is in Latin America.
Like in that famous sketch by the ‘The Three Stooges‘, when the plumbers would try to stop a water leak by covering it with a pipe taken from somewhere else in the system, which then caused a leak somewhere else, in middle-income countries it’s common for the solution to one problem to cause another no less significant than the first.
In the election campaign, for example, Macri promised a million low-interest mortgages, a valuable proposal but one that clashes with the primary obstacle to housing deficits in urban areas, which is about access to land rather than construction. Something similar has occurred in the labour market: though there is a low level of unemployment (6.9% at the latest measure), there are fundamental problems manifest in the high rate of informal labour (33.5%), the heterogenous labour markets, and low wages (around half of all workers earn less than $6,000 a month). In the same vein, the incorporation of women into the labour market has resulted in income inequality (women earn on average 30% less than men).
Is it possible to tackle the housing crisis without challenging the interests of the real estate developers that have cordoned off gated communities in Greater Buenos Aires? Or without disincentivising in some way vacant homes, of which there are at least 300,000 in the capital alone? Can we improve the quality of jobs by betting only on agribusiness, mining, energy, and service sectors, which may be dynamic and generate dollars but are not known for generating stable, safe, and well-paid jobs? Are we able to improve working conditions for women without extending maternity leave? And is that possible without resistance from the business community?
It’s easy to reach the conclusion that these types of advances require shaking up power structures that Macri’s government is unwilling to upset. It requires pushing the line of rights to limits that even Kirchnerism didn’t dare cross. Far from that, Macri’s government seems to operate under a model that Alejandro Grimson called “possible neo-liberalism”, in the sense that it is an orthodox programme that nonetheless appreciates the need to maintain at least some of the social policies developed in the last decade. Having learned the lesson from the Menem era and without the hyperinflation crisis to discipline social actors, the government must make concessions: we will never, for example, hear Cabinet Chief Marcos Peña say, as Menem did in 1989, “a train that stops running is a train that is shuts down”.
How far will this government go? A far as necessary to guarantee political legitimacy and social peace, which in turn depends on how solid the social concensus is, the capacity for popular sector to mobilise, and resistance from unions.
This scenario, which helps explain the sharp changes in direction taken by the government so far, fits with the programme of Social Protection Floors, implemented here mainly by officials who have come from civil society. The division of labour in Macri’s administration sees the ex-CEO’s tighten the purse strings while the former NGO leaders provide some compensation.
Ths problem, still, is that this isn’t enough given our social structures and the egalitarianism that is at the heart of our political culture. Moreover, the ‘zero poverty’ proposal is misguided, because poverty is not an absolute. You can, as Lula did in Brazil, aim for “zero hunger” because it can be measured in daily calories per person, but you can’t reasonably talk of “zero poverty” because it is relative. Someone is poor in relation to someone who is rich, and when one need is satisfied another can emerge, as in the never-ending plumbing drama of The Three Stooges.
For that reason, in Argentina the problem isn’t just poverty, which has a deserved spot in the government’s discourse, but inequality, which is not mentioned at all. And that leads to another idea, which I’ll present as a question in the name of prudence: Is it possible to eliminate poverty without reducing inequality?