STRUCTURAL CHANGE FOR EQUALITY IN LATIN AMERICA

Since 2010, the ECLAC proposes to the Latin American governments equality as a guiding principle and strategic long-term goal of their policy. In 2012, during a meeting in El Salvador ECLAC's executive secretary Alicia Barcena reaffirmed this proposal with the report “Structural Change for Equality: An Integrated Approach to Development” ( July 2012, 307 pages ).

So far, Latin America failed to link social equality to economic growth. On the one hand there is Cuba, with its high degree of social equality which due to lack of economic growth in practice amounts to an equal distribution of poverty. On the other hand, there are countries with a neo-liberal model that have economic growth but that is very unevenly distributed. The vast majority of people have to live of an income coming from the informal economy or from precarious jobs.

With its report on 'Structural Change for Equality " the ECLAC takes the challenge to find a way between the two extremes, between state capitalism and market capitalism and of course with the complete preservation of democratic values​​. It is the way that Europe attempts to continue to this day despite the debt crisis. The heart of this model is politically supported by political parties with different colors like social democrats, Christian democrats, social liberals and nowadays even with the support of green parties.

According to the ECLAC the road between neo-liberalism and socialism runs along structural change. A broad term that describes ECLAC as “putting qualitative changes in the production structure at the centre of the growth dynamic.” (page 16 preface). These qualitative changes in the production structure according to ECLAC are also needed to respond to the challenges of globalization: “Improved global insertion and virtuous growth in domestic productivity and employment call for greater participation by knowledge-intensive sectors in overall production. This fosters the building of capacities, knowledge and learning in coordination with production and investment across the economy and the social fabric. In this scenario, environmental sustainability will be achieved only if there is structural change entailing a profound and inclusive technological transformation.” (Preface page 16)

Not an easy task when one considers that even traditionally well organized European states like for example Germany and France are struggling to achieve some of the proposed elements of the ECLAC proposal like for example more technological innovation in the production process. ECLAC points out, however, that the macro-economic conditions in many Latin American countries are now better than in Europe because of their small size of the national debt and increased international reserves.

According to ECLAC, the structural changes lead to a more knowledge intensive production structure with higher labor standards and employment. Employment is considered as the instrument to achieve a greater equality in Latin American society: “Employment with full rights holds the master key to equality; and that must come with social policies to tackle the risks on the road to structural change. Industrial policy is a long-term venture; along the way, sector adjustment pressures arising from productivity leaps call for social policies to ensure a well-being threshold for those who cannot, in the early stages, attain wellbeing through quality employment with rights.” (Preface page 17).

The ECLAC therefore advocates a greater role for the state: “ This obviously involves political will, because the State has a key role to play in advancing policies in this sphere. It is worth remembering that during the past two decades, talking about active industrial policy conducted by the State was a virtual anathema in the development lexicon that prevailed under the Washington Consensus. Talking about equality was, too. Underlying that “veto “ was the assumption that the market, supported by the right signals, would take care of optimizing factor allocation in a way that would in the end lead to productivity leaps. Experience has clearly shown that this is not the case, especially when looking at the poor productivity trends for Latin America and the Caribbean over the past 30 years.” (Preface page 17)

As already noted, no small task for states that are still looking for the development model that best suits them and gives the best guarantees for more welfare. What should be the task of the unions in this process is obviously not the ECLAC to determine. The Latin American unions themselves have the task to establish a proper policy and strategy. Perhaps this is an appropriate topic for a Latin American seminar in the near future.