Social dimensions of macroeconomic policy: report of the Executive Committee on Economic and Social Affairs of the United Nations

Introduction The social agenda is long-term in nature, in the sense that poverty alleviation along with a better distribution of income, wealth and opportunities are long-term goals. A sound macroeconomic policy, on the other hand, has to do largely with the consistent management of short-term policy instruments pursuing a sustainable and predictable pace for aggregate economic variables and major prices (wages, inflation, interest rates and exchange rates). In spite of the different arena and rationale in which they play, there are strong links between the two. First and most obvious, macroeconomic adjustment and structural reform are more likely to be sustainable when they are equitable. Second, social intervention —i.e., policies, programmes and reforms aimed at improving social performance in the long run—, needs stable funding which is not always available in view of macroeconomic constraints. Third, macroeconomic instability —especially episodes of recession or hyperinflation— increases poverty and inequality, while restoring macroeconomic equilibrium does not restore previous social balances. Finally, there is no unique macroeconomic policy mix to tackle a given situation, and the policy options may not be neutral from a social standpoint. Monetary, fiscal and exchange rate policies, together with structural reform, have major consequences for the social wellbeing of societies, not only in terms of protection against shocks and crises but also in terms of equity. Many, if not all, of the necessary social policies are of a domestic nature. This report thus concentrates on domestic strategies aimed at maximizing the linkages between consistent macroeconomic policies and social progress. Pursuing them, however, depends to a considerable extent on the international enabling environment in which the global financial system, the unsettled debt crisis and increasing ODA flows play a significant role. Countries operate in a world economy where market players everywhere immediately scrutinize domestic monetary, financial or fiscal policy decisions and the performance of exchange rate regimes of individual countries. Under these conditions, the room for manoeuvre of policymakers has become considerably constrained. Consequently, it is becoming increasingly complex to incorporate the social dimensions into such policy decisions, to the extent that external analysts consider that authorities are sacrificing sound macroeconomic policies. The main message of the report is that the expediency of short-term economic efficiency as embedded in much of the advice on macroeconomic stability needs to be tempered by long-term development objectives. The report starts with a short historical background which describes the ascendancy of macroeconomic policies over social development policies (chapter I). It continues with an evaluation of the relation between macroeconomic consistency and social effort (chapter II), and the importance of sustainable and stable growth for social progress (chapter III). The report then turns to the need for an equity-enhancing growth strategy (chapter IV) and an analysis of the priorities of social policies in an integrated approach to growth (chapter V). The final chapter adds some final institutional remarks.

Children’s rights in the digital age

The digital divide exacerbates inequalities in access to information and knowledge, making it more difficult to socialize with peers and limiting awareness of and the ability to use basic tools for life in society. Reducing this gap sets in motion virtuous synergies of social and cultural inclusion for children and adolescents, facilitating skills development and generating lifelong opportunities. Although the younger generations are connected digital natives, inequalities persist among socioeconomic groups, though these have been tempered by connectivity programmes in public schools in the region. The main article of this edition of Challenges uses current information to examine the progress made and the gaps that remain in this area. Providing children and adolescents with access is merely a first step. They then need to be protected from the risks associated with information and communications technologies (ICTs), which must be harnessed for purposes of meaningful learning, promoting uses that are more in line with the educational curriculum. Lastly, the article posits that connectivity policies must be linked to the fulfilment of children’s rights in the framework of the Convention on the Rights of the Child. As is customary, this issue also contains information on meetings and conferences held in the region during the year and recent publications in this field. Mention is also made of good practices from Peru in reducing gender gaps and a joint initiative between mobile operators and the United Nations Children’s Fund (UNICEF) to protect children in the digital age. Viewpoints includes expert opinion on the potential of ICTs as tools that can facilitate the exercise of the rights of children and adolescents, but also lead to violations of these rights.