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Governments must focus on welfare this year

Isabel Ortiz
Filed on January 2, 2020

A lot will be decided in the United States, still the world's hegemonic power.

The year 2019 is ending with widespread demonstrations, rising inequality, and a crisis of representation in many countries. The world is sleepwalking toward recession and a new crisis, while depleting the environment. Governments, and ultimately people, can reverse these alarming trends in 2020.

61 countries will have presidential or parliamentary elections in 2020. Many citizens are tired of conventional orthodox policies; they want change, and they will choose new parties as a way to achieve this.

This is an important opportunity to redress the current situation, but many of the new emerging leaders are far right demagogues who blame today's problems on social-welfare policies, migrants, and the poor, while aiming to remove all remaining constraints on capital. As in the United Kingdom, many whom neoliberalism has harmed will vote for these politicians, making the world a more unequal and riskier place.

A lot will be decided in the United States, still the world's hegemonic power. How US citizens (many without much knowledge of global affairs) vote in the 2020 presidential election will have profound consequences for the rest of the planet's citizens.

US President Donald Trump has already had a big impact on the world, eroding multilateral institutions, trade agreements, and global initiatives as part of his "America First" agenda. Yet the right continues to win votes, partly because it is becoming ever more radical, offering out-of-the-box "unthinkable" policies - from building walls to exiting the European Union - that appeal to those who want change above all else.

Unless social democrats advance radical and attractive progressive public policies in 2020, the radical right will continue to rise, and with it the trend toward increasing inequality, economic risks, and environmental degradation.

How we got to this point is not difficult to discern. Four decades of neoliberal policies have eroded living conditions in most countries. Governments of both the left and the right, advised by the International Monetary Fund, the World Bank, and other organizations, have been pursuing supply-side policies focused on improving business competitiveness, which has meant lower wages, more "flexible" labor markets, lower corporate taxation, and greater income inequality. While companies sharpened their competitive edge amid falling living standards and rising public debts, global demand has stagnated.

Governments have also pursued cuts in social expenditures and the privatization of public services. Paradoxically, most of the savings from these cuts have gone toward supporting private companies with tax breaks and bailouts in an effort to generate growth.

If the current course is not changed, austerity policies will continue spreading in 2020, cutting into pensions, wages, social programs, and labor protections. In 2020, austerity will become "the new normal," affecting 113 countries, or more than 70% of the world population, and fueling more social discontent.

Absurdly, many governments are cutting social expenditures, but increasing military spending and supporting large corporations with public funds and limited regulation. At a time when half of the world's population still lives in poverty (defined as less than $5.50 per day), this is likely to result in more protests and conflicts in 2020. Austerity is not necessary. Even in the poorest countries, there are alternatives. The International Labor Organization, United Nations Women, and UNICEF report at least eight financing options to generate resources sustainably and avoid cuts to public services.

If governments were to opt out of austerity, we could see more countries successfully raising revenue for national development in 2020, increasing public investments that benefit people, and supporting real economic activity and human development, with a view toward generating decent employment and ensuring environmental sustainability.

In addition to improving financial regulation and redressing financialization processes, these policies would help avoid the danger of recession and the possible economic and financial crisis predicted by institutions such as the UN, J.P. Morgan, and Moody's.

Even if the world avoids economic calamity in 2020, environmental devastation will continue. These are not just national issues. Global problems require global solutions and multilateralism needs to be strengthened, not weakened, to work together to form sustainable solutions to improve people's lives.

A better future for all is possible. Governments, and ultimately citizens, can improve the world in 2020. But if they continue obsessing about stock prices and quarterly earnings at the expense of a long-term vision, hiking defense spending and cutting welfare, blaming migrants and the poor, while allowing the rich to become richer and the environment to be further damaged, it will be another long year of living dangerously.

- Isabel Ortiz, Director of the Global Social Justice Program at the Initiative for Policy Dialogue at Columbia University



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