Tackling Inequality is a Requirement for Development, not a Result.

‘Zero draft’ is not a phrase that inspires confidence. It suggests that what is included is very far from a final version. How would editors react if authors submitted zero drafts of novels? What trepidation would parents feel if their darling little ones began with only zero drafts of letters to Santa?

Development campaigners fear the same of the Zero Draft of the Sustainable Development Goals, released recently by the UN. On the face of it, this list of 17 targets seems gratifyingly comprehensive and water-tight.

This is especially important as the Millennium Development Goals, which the SDGs will replace after 2015, have been criticized for being full of holes, such as ignoring climate change. 

Best of all, for many development campaigners, is Goal Number 10: ‘reduce inequality within and among countries’.

So what’s the problem?

Campaigners tell me that during the latest round of UN Open Working Group sessions on the SDGs, several nations argued that later drafts should not include a separate target to reduce inequality. Rather it should be an overarching goal that is arrived through success on other targets, e.g. increasing access to education.

Better, the thinking goes, to have inequality reduction as a general aim, than a quantifiable target that is politically-charged, hard to calculate and easy to miss.

Focus on economic growth that lifts all boats, the politicians say, and inequality will necessarily decline.

The New Economics Foundation (NEF) begs to differ in its new report ‘Economic Inequality as a Sustainable Development Goal: Measuring up the Options for Beyond 2015’, the launch of which I chaired in London this week.

Firstly, simply, it suggests reducing inequality reflects core principles of the Millennium Declaration that led to the original eight Millennium Development Goals. In addition, as the MDGs reach expiry next year, governments have already agreed that future development targets must address three cornerstones: poverty reduction; sustainable production and consumption; and inclusive and equitable economic growth. Surely, therefore, reducing inequality should be an obvious, tangible goal?

NEF refutes the argument that success on other goals will help reduce inequality. It gives the UK as an example, where access to health care and education are universal, yet inequality rages. Equality of opportunity, NEF argues, just means people can access the same rights and services – it doesn’t loosen the structural strait-jackets that underpin economic inequality (I see definite shades of Thomas Piketty’s ‘Capital in the Twenty-First Century’ here).

When it comes to economic growth, China’s success has led to less inequality there (although huge disparities exist between the rich cities of Eastern China and the poor West), but India’s once-booming economy has failed to lift many of its millions out of poverty.

Reducing inequality, NEF says, should be seen as an ingredient for development, not an outcome. This brings to mind the brilliant Politico article by billionaire Nick Hanauer last week who argued for higher wages for ordinary workers, saying that trickle-down economics doesn’t work and that a strong, stable middle class boosts the economy and shrinks government, by reducing the benefits bill.

He and NEF make the point that societies with less inequality grow faster, in a more stable way and are better insulated from economic downturns.

This is a key reason, NEF argues, that there should be a specific SDG target to reduce inequality. It also recommends that each country should consult its own population to set its own targets. This not only makes the goal more localised, but it also gives each country a real stake in the outcome. Problems it acknowledges include massive holes in data collection in many countries, which makes quantifying the problem of inequality – let alone a solution – much harder. 

Credit Suisse and Oxfam’s report earlier this year that just 85 people own as much wealth as the bottom half of the world’s population reminds us how shocking the problem of inequality has become. Nations say they are serious about tackling it. How they choose to do so may be a sign of their real intent.