Middle-income countries and inequalities, bridging the two sides of the mirror

Can digital technology, public procurement, public social spending and active citizenship shape new priorities to address inequalities?

Middle-income countries (MICs), home to 5 billion people, often experience high growth rates. Positive growth indicators can hide a starker reality: MICs host 73 % of the world’s poor. Significant shifts in economic demography over the last 20 years demand increased attention to the disparity in access to quality social services and economic opportunities for the most vulnerable. This session will address challenges to close the inequality gap and look at solutions to build an inclusive society.

  • The use of data to guide and adjust public policies and investments.
  • The role of inclusive public procurement to ensure access to public services to all.
  • The impact of equitable public expenditures on social sectors.
  • The role of civil society in reducing urban inequalities through active citizenship.

Key points

  • New methods of collecting data in middle-income countries (MICs) can give a more nuanced view of growth, unemployment and poverty rates.
  • Governments need donor support in capacity building, strengthening public institutions and making public procurement more effective.
  • Civil society institutions play an important role in opening up space for public participation.
  • Given the importance of employment in boosting MIC growth, what employment opportunities are there?
  • MICs need EU support in learning new methods to do things and in holding governments to account.

Synopsis

Traditional data collection systems in middle-income countries (MICs), such as census or employment data, often fail to give the full picture or ignore the way people live at the micro level. New methods of data collection give a more accurate picture, for example, when carefully analysed, the 11.5 % unemployment level in Kenya, turns out to be closer to 75 % When Oxfam carried out an analysis of the structure of poverty and the use of government services in Mexico City, it discovered there was a very poor take-up by both the lowest and the highest 20 % of the population, which a general data sweep would not have discovered. A more useful way to draw up policies about the use of these services is to focus on the narratives people give about the use of the services. Unfortunately, sometimes governments are unwilling to accept a new vision offered by new figures, as they have a vested interest in maintaining the status quo. Turning to the type of donor support that MICs need, it was agreed that the nature of the support has changed. It is no longer a case of giving budget support, as often it is more useful to help build government institutions, increase administrative capacity or offer advice on how to distribute services. The United Nations also offers governments advice on how to increase the efficiency of public procurement, which can save lives by saving money. One study found that by improving public procurement, the Guatemalan government reduced the cost of medicines from US$ 200 million to US$ 160 million and was then able to spend the saved US$ 40 million on immunisations. As countries become richer, their governments grow in capacity and resources, and begin to develop a stronger public space and stronger government institutions. When MICs reach this stage they need to build a strong relationship with civil society, which plays a role in holding the government to account. An integral part of Agenda 2030 and the Sustainable Development Goals is for governments to work with civil society to build democratic institutions. Given that employment is a measure of a country’s growth, what methods should be used to boost employment? One way is to offer more focused training for young people, and to offer young entrepreneurs the opportunity to build businesses. It was also suggested that more needed to be done in MICs to build trade unions to support workers, and to offer state social protection; evidence shows that a more secure stable workforce is more productive. The EU and other donors should continue to play a role in MICs by helping governments deliver services in a more efficient way – for example adopting mobile technology and in evaluating service delivery. Donors needed to play a more political role, such as challenging governments on their behaviour, and where necessary offering support to civil society.

Insight

The implied conflict between least developed countries and middle income countries in terms of funding is a false dichotomy, as total ODA and other funds represent such a small proportion of global wealth.

Organised by

Speakers

Ricardo Fuentes Nieva
Executive Director
Oxfam Mexico
Patricia Moser
Director Procurement Group
United Nations Office for Project Services
Rositsa Zaimova
Co-founder
Dalberg Data Insights
Julianna Lindsey
Representative
UNICEF (United Nations Children's Fund)