Dialectic of Priorities and Capabilities
By: Dr. Salam AL Rabadi
IslamNews – Based on an evaluation of the policies and strategies, that have been adopted to face the economic and financial repercussions of the global Covid 19 pandemic, addition to increasing pressure as a result of the difficult challenges for all countries on the deficit in the government budgets level, we can say that all the efforts of politicians and economists to find new opportunities and alternatives in all sectors have not achieved the desired results. It must be noted the basic problem in the modern world on a level relationship between sustainable development and economic growth are: The problematic of the gap between the rich and the poor. Therefore, we can put the following question:
Do we in the era of the economy for the economy and not for the society?
Far from theorizing and according to the statistics and data on the economic gap (if we take into account that the largest percentage of citizens are workers or employees are gainfully employed), it must be recognized by the fact that the economy is growing far from the labor market and has a negative impact on this sector more than other sectors. Also, if the facts based on the public interest will remain the primary criterion to evaluate the successful economic policy, we can say that the economy is no longer working for the benefit of the peoples. Accordingly, it is obvious that the gap between the leading entrepreneurs and the owners of wealth on the one hand and the salaries of the workers on the other hand, it will growing doubts about the safety of the community.
Hence, if the Free trade and movement of capital are initiating the growth and wellbeing, and if the goals of the World Trade Organization (WTO) will be achieved in the future at the level of removing quantitative restrictions, unifying all customs duties and making the world a free trade zone, here question marks must be raised about whether:
Will these policies and goals lead to exacerbate economic and social crises? Or will it be a point of positive change and transformation?
It has become evident that the competition between countries (whether industrial or developing) to cut wages or salary will lead to disastrous results, this will not increase the well-being of communities but will increase the rigidity of the painful social status. It should be noted in this context that lower wages are reflected in commodity prices and benefit from them will be directly in favor of the high-income consumer (who has lost nothing of his income as a result of reducing the cost of production). On the other hand, it is the middle and lower classes that lose part of their income and are affected more than others( they are more affected). Proceeding from this reality, we cannot ignore the following dialectic:
Who will bear the most economic burdens as a result of the crises associated with the Covid-19 pandemic: capital or workers?
In the past, the economic equation more closely reflected the widening gap between the rich and the poor, as follows: the rich get richer and the poor get poorer. But now, in light of the current existing facts, this equation is no longer sufficient to clarify the picture, as it has become clear that a new formula has emerged based on the following principle:
The rich become richer and the poor are getting poorer at a faster rate?
Likewise, in the event of a careful reading of the current economic reality and based on economic pattern that governments follow, where work is underway to increase the tax burden on the labor sector and workers, not to mention that increasing tax exemptions and facilities provided by governments to transnational companies, this economic and financial patterns will inevitably lead to a deterioration, and reduction in financial revenues in the public budgets of countries, which these governments try to compensate this decrease in revenue is through increasing taxes on other classes (the poor), or by reducing social services (especially health and educational care).
In this context, by tracking the economic and social repercussions of the Covid 19 pandemic, it can be said that there is a moral and economic defect at the level of global governance when we know that there is a high speed in providing money in order to find solutions to the global financial and economic crises,. Compared to that there is caution and extreme miserliness when it comes to financing Humanitarian programs with relatively little cost.
For example, we only need tens of billions annually to eliminate hunger and malnutrition in the entire world (and the United Nations has approved several different programs to achieve this goal), but these programs are still on paper, only due to lack of availability the necessary funds. This is also what can be concluded previously at the level of support for global projects and programs related to combating epidemics and infectious diseases, as well as this reality currently applies to the level of difficulties facing the United Nations (UN) and the World Health Organization (WHO), in order to secure the necessary funds to support scientific research related to confronting the Covid 19 pandemic, away from political strategies, states’ interests, or policies of economic exploitation.
In conclusion and in light of how countries and global institutions deal with the dilemmas of the Covid-19 pandemic, these tragic facts (far from the ideological dimensions in the study and evaluation of the global economy) put us with this logical dialectical question which raises a lot of controversy: Does the problem lie in the priorities and strategic options of countries? Or is it in fact a problem of the actual capabilities available to states?