Media Center

Press Release

AT OAS, UNDP ADMINISTRATOR UNDERSCORES CHALLENGES
FACING EMERGING MARKETS

The United Nations Development Programme (UNDP) Administrator, Kemal Derviş, headlined the twenty-third conference in the Lecture Series of the Americas yesterday at the Organization of American States (OAS), underscoring the problem of inequality as one of the main challenges facing emerging markets in the global economy.

Speaking to diplomats, students, academics and civil society representatives on “Financial Markets, Social Justice and Democracy: Where is the path to equitable and sustainable growth?” Derviş highlighted the problem of concentrated wealth emerging from factors related to the “new accelerated phase of globalization,” as a potential threat to democracy.

“It’s a challenge for globalization, it’s a political challenge for democracy, because if markets do not produce inclusive results, if large parts of the population are left out of the progress, I think that we will see tensions, we will see protectionism, we will see strong populists reactions, and I think this is important when we analyze what is happening throughout the world in the political systems,” he said.

“I think the key question today for developing countries in general, emerging markets, as well as low income countries, is how to find the path to rapid but also equitable and sustainable growth—what we at the UNDP call human development, in the face of global pressures that may indeed facilitate rapid growth, but that also seem to lead to inexorably rising inequalities and insecurities felt by citizens throughout the world,” underscored Derviş.

The keynote speaker added that if growth is rapid enough for it to have a significant impact on the poorest sectors of society, “then these tensions are manageable.” However, he warned that in order to achieve this type of sustainable growth, “much stronger effort is needed to deal with the inequality and the social dimensions of growth, otherwise that kind of growth rate will not be sufficient to really absorb the social tensions generated by inequality.”

“I don’t believe that such rise in inequality is really fundamentally compatible with social stability and democratic process and the kind of political participation that we all desire. There is a real problem even in the rich countries,” he added.

During his remarks, Derviş went on to say that governments should implement financial policies geared towards achieving this goal. “Without a State that is absolutely strong in its resolve to fight inequality and poverty, I think we will reach limits to the current growth model in emerging market economies and therefore we have to think much more seriously of building that new type of State.”

In welcoming Kemal Derviş to the OAS, the Secretary General, José Miguel Insulza, noted that the UNDP has been carrying out very substantial work to support developing countries and has become very relevant “not only with issues related to economic development but also social development.”

Reference: E-264/07