Breaking News

Global context: Economic crisis, widening inequality and civil unrest

By Ilaria Chessa

In 2008 economists had predicted a temporary economic crisis. Today we know that there is nothing short-term about the economic slowdown. Our socio-economic system based on unlimited wealth accumulation has worked, and continue to do so, fantastically well for just a few, while hurting the large majority of citizens with poverty, widening inequality and little to no effective democratic participation.

Income and wealth inequality has become the defining challenge of our times with the gap between the rich and poor at its highest level in decades. Inequality in wealth distribution hinders the basic survival for billions of people and is a threat to democracy; it limits political freedom and access to power, with billionaires buying political votes and prominent public positions.

Income and wealth inequality has been compounded by corruption and the siphoning out of public coffers of huge sums of money from less scrutinized economies, resources that are then deposited into the financial systems of western nations making the fortune of their bankers, investment brokers and real estate tycoons.

It is therefore no surprise that since the world crisis started, we have witnessed mass protests across the globe; from Venezuela’s economic crisis, marked by rampant inflation, chronic shortages of subsidized goods, and food riots; to the suspension from office for President Rousseff of Brazil pending an impeachment trial over accusations of corruption in manipulating public accounts; and on the other side of the Atlantic, Greece’s unsustainable debt crisis which led to the collapse of the economy and to civic unrest.

Nigeria is familiar with the mechanism of wealth accumulation through power; corruption made a few Nigerians phenomenally rich at the expense of millions. And a year after the start of the 5th democratic dispensation under the leadership of President Buhari, people’s hopes for better living standards remain unmet. Some argue that corruption has declined but so has public sector procurement.

At the current oil price, the country’s public coffers are nearly empty in the face of a huge recurrent bill for a bloated public sector, a large infrastructure gap to bridge, an unaffordable public debt service to revenue ratio, a depreciating currency that increases the cost of living and a fragmented and mostly informal non-oil economy.

As Albert Einstein put it, men cannot resolve problems with the same mind-set that produced them. Our political representatives, just like our socio-economic problems, are children of the same eroded value system. To become part of the solution and re-shape values and goals, we must first recognise that we are part of the problem, as silent or as active stakeholders, as investors, producers, consumers, parents, educators and policy makers. Looking at the bright side, the good news is that the alternative to the current system already exists: the economy for the common good (ECG).



Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.