Taxation

There must be social protection for the successful growth of globalization


Economic growth has been shifting towards new markets over the past number of years. As a result, 83 of the developing and emerging countries have grown at least twice as fast as the industrial states during the past decade, and are already showing high incomes. The result is a shift of the global wealth from west to east and from north to south. And although the middle-class segment is also growing considerably in these emerging countries, problems are still arising that could pose a hazard to stability unless countermeasures are taken by the governments.

The Organization for Economic Cooperation and Development (OECD) – which currently counts 34 developing western industrial nations as members – represents the view that the means required to put in place social countermeasures are essentially available to the successful developing and emerging countries due to the increase in prosperity. This was the message conveyed to the respective governments in the OECD report delivered in Paris on 21 November 2011, "Perspectives on Global Development 2012", stating that the social cohesion of the societies must be strengthened if the growth is to be ensured on the long term.

At the Paris OECD meeting the OECD General Secretary, Angel Gurría, emphasized the importance of the report: "The social and political unrest during the past number of years and in the most varying regions of the world demonstrate what is around the corner if people do not feel that they are in good hands."

The authors of the study recommend that the governments of the emerging and developing countries that are experiencing strong growth make investments into social security systems, employment, education and equal opportunities, in order to combat the risk factors of high unemployment, a low level of social mobility, limited social involvement and gender-based discrimination. The growth itself will not solve the problems. This is backed up by investigations into life-satisfaction in India, Thailand and Tunisia. In all three countries the level of life-satisfaction has fallen in spite of economic growth.

According to the study, one driving force of dissatisfaction are the increasing expectations of the growing middle-classes. Their economically strong members craved political involvement, promotion prospects and better living standards. And their potential will continue to see considerable growth. Thus, two billion people already earn more than ten to one hundred US-Dollars on a daily basis. By 2030, according to projections, this social class should grow to include four billion people.

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