Speaking at the UNCTAD Trade and Development Board session on Wednesday on the item "Development strategies in a globalized world: Reducing inequalities for balanced and sustainable development," H.E. Dr. Nicolas Schmit, Minister of Labour, Employment and Immigration of Luxembourg called for a new model for cooperation among countries from different parts of the world.
The major message is that there must be a cooperation model - not only in Europe, but also at the global scale, the Minister said. "UNCTAD was designed as a forum for dialogue between developed countries and developing countries. It must also become a model for cooperation amongst the various parts of the world in order that we can achieve stability."
The Minister added that "inequality is a synonym for instability", and "growth and economic development are hardly compatible with instability."
"We have to think about the model of our cooperation and for development. Out of this crisis, we must build something else, and we have to start it now," Minister Nicolas Schmit said.
Deliberations of the Board under this agenda item focussed on the linkages between income distribution, growth and development. Income inequality has increased significantly over the last decades in different regions and groups of countries. This has revived the tension between advocates of theories that rising inequality is a necessary condition for successful development, and the alternative contention that high or rising inequality is not only an obstacle to development, but also one of the root causes of the current global crisis.
Background to the deliberations of the Board under this item is contained in Chapters II-VI of the UNCTAD Trade and Development Report 2012, which address the evolution of income inequality over the past decades, the reasons underpinning increasing inequality, the ways it is affecting economic growth, as well as proposals for inclusive development policies that would create the conditions for sustainable and rapid growth.