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Spain faces inequity
Marta Arias; Víctor Renes
CÁRITAS Española; INTERMÓN OXFAM
In 2000, Spain missed an opportunity to raise its voice at international meetings. This silence was resounding at the UNGASS since it was preceded by an important effort by a solid group of Spanish NGOs that had prepared a document evaluating Spain’s implementation of Summit commitments. Two representatives of the group became official delegates, but they were unable to discuss this topic with the ministries involved, and there was no reaction or evaluation before, during or after UNGASS.
Spanish aid and North-South inequities
The year 2000 was marked by the difficult process of formulating a
plan for Spanish development cooperation that indicates the priorities
and strategies for official aid to 2004. The document, approved on 24
November 2000, admits on the very first page that "inequity in
worldwide distribution of income has increased steadily over the last
thirty years." On this premise, it argues that Spanish
cooperation policies should defend—in addition to market economy,
free trade, private sector development and economic liberalisation—a
fairer distribution of wealth. Without a certain amount of resources
allocated to achieving this goal, however, the impact of this declared
support for fairer distribution of wealth shall be minimal. Spanish
social aid,[1] already very low, decreased in 1999 to about 0.23% of
GDP (below the average for DAC and far below the European Union
level). The percentage of aid destined to basic social needs remains
erratic, and is currently slightly over 10% of ODA. It is hoped that
the development plan approved in November 2000 will improve this
situation and achieve the 20% target agreed upon and committed to
internationally.
As the development plan admits, "it makes no sense to try to
finance the external sector of the economies in these countries
through a transfer of resources from ODA while commercial obstacles
are being put in the way of their exports." This position differs
from Spain’s traditionally reticent attitude toward access by the
poorest countries to basic products such as rice or sugar.
Nevertheless, during the drawing up of this report some hopeful
changes were detected. Among other things, Spain voted
favourably—though conditionally—on the "everything but
arms" proposal to grant free access to the European market for
products from less developed countries.
Spain must adopt an attitude based on coherent policies, and must be
willing to implement innovative solutions that respond to the high
sensitivity of Spanish society toward international social inequity.
The public’s concern for inequity was evident in the “Social
Consultation” for the abolition of external debt: in an
unprecedented initiative, more than a million people from 458
municipalities declared their support for cancellation of the debt.
There has also been massive support for the proposals of the
“External debt, eternal debt?” campaign.
Action against poverty and inequities in Spain
The evolution of poverty
The latest data on the evolution of poverty in Spain, from 1994, 1995
and 1996,[2] indicates that relative poverty decreased slightly. The
poverty rate, corresponding to a monthly income equivalent of 50% of
the average income, was below 18% in 1994, 17.6% in 1995 and 17.5% in
1996. Severe poverty (25% of the average income) remained stable at
around 3% in the same period.
But this data source also offers information about permanent poverty,
[3] or poverty that endures over time: Spain, with a relative poverty
rate of 17%-18% in 1994-1996, had a permanent poverty rate of 9.8%,
which supposes a 57% average annual poverty rate in this period.
In 1998, over five million households received monetary assistance
(conditional to an income test). The demand for such assistance has
continued to grow in the last two decades. It has been proven that
such assistance has an important impact on reducing severe poverty.
The table shows changes in the rate of relative poverty with the
elimination of various subsidies.
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The
impact of assistance on severe and moderate poverty[4] |
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Severe
poverty line: 30% of the average income.
Moderate
poverty line: 60% of the average income. |
|
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Severe
poverty
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Moderate
poverty
|
|
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Percent.
of poor
|
Variation
rate (%)
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Percentage
of poor
|
Variation
rate (%)
|
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Current
system without assistential aid
|
7.65
|
|
22.78
|
|
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Inclusion
of:
|
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Minimum
pension complement
|
6.26
|
-18.17
|
21.51
|
-5.58
|
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Unemployment
subsidy
|
6.17
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-19.35
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21.2
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-6.9
|
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Non-contributing
retirement
|
7.42
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-3.01
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22.40
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-1.67
|
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Childcare
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7.48
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-2.22
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22.76
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-0.09
|
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Total
assistence package
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4.49
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-41.31
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19.5
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-14.5
|
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Current
system without assistential or contributive aid
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27.57
|
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40.57
|
|
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Inclusion
of total contributive
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7.65
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-72.25
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22.78
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-43.85
|
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Source:
ESPASIM and data from PHOGUE, 3ª Ola. |
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Notes:
Poverty line: 30% of the average income (412,954 pesetas/year);
60% of the average income (825,910 pesetas/year). Analysis Unit:
Household. Each household is considered by the number of
members. The scale of equivalence is the square root of the size
of the household. |
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[1]
“The impact of assistential subsidies in Spain”,
presentation by Ley y Mercader Prats at the Seminar on
“Public policies and the distribution of income”, BBVA
Foundation, January 2001 |
For the three dimensions of poverty analysed, the unemployment subsidy
has the greatest effect as a protecting element, followed by the
minimum pension complement. But more noticeable is the insufficiency
of the existing assistential aid, the fragmented and poorly integrated
system of assistance, and—even more important—the failure to
provide a guaranteed minimum income.
Decentralised system for minimum incomes and its effects on
inequity[ 5]
Since the late 1980s, complete responsibility for minimum income
programs has fallen on governments of the autonomous regions. In most
regions, these programs became the main public instruments against
poverty. The expansive rhythm that these programs demonstrated in the
first half of the 1990s was in part because they were new programs and
in part because of the rise in unemployment. Although this expansion
has slowed, the number of households benefiting from the programs
continues to grow. At the end of the 1990s, nearly 70,000 households
had benefited from this aid, equivalent to over 180,000 or about 0.5%
of the population.
Decentralisation of these programs has not resolved problems of
inequity or efficacy, however. The fact that some regions have fewer
resources than others implies significant variations in the amount of
aid and coverage offered.
The rationale underlying decentralisation is the need to treat
heterogeneous situations differentially. It implicitly recognises that
differential treatment is the correct response to differences in the
standard of living within the national territory. The key question
when analysing these differences is this: is the obvious inequity in
aid (adjusted for prices) because of unequal values established for
different programs, or because of differences in the cost of living in
the regions? If the differences in prices do not justify the
differences in aid, decentralisation could be creating a serious
problem of unequal treatment of households that are similar in income
and size.
The available data leaves little doubt regarding the differences in
prices and amounts of minimum income in the diverse autonomous
regions. The variation of prices among regions is substantially less
than the parameters established in the programs. Hence inequities in
aid cannot be legitimised by differences in the cost of living in the
various regions. This inconsistent policy of decentralised aid must be
faced. This issue is highlighted in a report of the Spanish Economic
and Social Council:[ 6]
"The Spanish Economic and Social Council understands that the
right to minimum resources is a basic, full right, demandable when
necessary requisites are fulfilled. It must include the acceptance of
both the right to a minimum income and the right to social insertion.
For this reason, it would be fitting to establish a guaranteed minimum
amount, notwithstanding improvements on this amount, to be established
by each autonomous community, based, among other things, on the
diverse levels of development, wealth and cost of living."
Notes:
[1]
The data and graphics included in this report are taken from The
Reality of Aid 2000/01, by Gonzalo Fanjul, Intermón, Barcelona,
2000.
[2]
Luis Toharia, Carlos García Serano and Miguel A. Malo Ocaña.
Poverty in Spain: a critical analysis based on the Household Panel
of the European Union (PHOGUE), 2000.
[3]
The percentage of individuals living below the relative poverty
line (50% of the average income) for many consecutive years.
[4] "The impact of assistential
subsidies in Spain", presentation by Ley y Mercader Prats at the
Seminar on "Public policies and the distribution of income", BBVA
Foundation, January 2001
[5]
Luis Ayala Cañón, Rosa Martínez López, Jesús Ruiz-Huerta.
“The regional decentralisation of assistential aid: effects on
equality”. Presentation at the Seminar “Social policies
against poverty”. BBVA Foundation. June 2000.
[6] “Poverty and social exclusion in
Spain”. Spanish Social and Economic Council. Madrid, 1997, p. 92
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