Esteban Moctezuma Barragán's Plenary Remarks

Our starting point is defined by three premises: first, that globalization, international trade and economic policies have created an enormous amount of wealth. Second, that poverty is one of the fastest growing phenomena in today's world. And third, based on the previous two premises, that the creation of wealth is being accompanied by an increase in poverty. This is a key issue.

Can the world in the 21st century coexist with an immense number of people living in the 19th century? I am convinced that the answer is no. Economically the answer is no because poverty is itself an obstacle to sustained growth. Politically no, because serious inequalities sooner or later undermine stability and national cohesion. Socially no, because those inequalities also erode the fabric of the community and the quality of the social organization. And most importantly, morally no, because such a situation does not meet the minimum objectives of solidarity and collective co-responsibility.

In order to sustain economic growth today, it is also necessary to promote social justice. But we should now and forever more avoid the pendulum effect. We must learn that the quest for social justice should not be a detriment to the generation of economic growth. Just as it is impossible to promote economic growth without social justice, so is it impossible to promote social justice without a growing economic base.

And yet the evidence also shows that while a growing economy promotes real distribution of wealth and opportunities for an important segment of the population, it is not able to generate benefits for another, sometimes numerically significant section of the population which lives in conditions of poverty. In countries with a highly inequitable distribution of wealth, an important part of the population does not participate in the formal economy as a whole. Therefore, progress on the economic front does not automatically reach them.

Here we come back to the pendulum effect. It is not that the failure of macroeconomic policies to benefit an important part of the population automatically means that they are erroneous and should therefore be discarded. What it does mean is that they are insufficient and should be supplemented. An explicit policy decision and specific policies are required to support marginalized populations in order to incorporate them into the rest of society's economic activity. Therefore, countries with major social inequalities should have differentiated policies for different sectors and different regions.

Can the Mexicans living in conditions of poverty expect a domino effect of economic growth? How will the markets be able to enter a sector that produces and consumes its own goods? How will macroeconomic policies enter closed economies, where there is no cash flow? All of these questions lead us to the same conclusion: we cannot expect a single policy to achieve harmonious development. Let's take Mexico as an example. Three different sectors coexist. We can almost say that three different Mexicos exist. First, there is a highly competitive, advanced sector involving 22 million people. Second, there is a traditional, insufficiently modernized sector offering cultural services and industry. Around 450,000 jobs are annually generated by this sector. Finally, there is a marginalized sector of nearly 26 million people.

But what does it mean to put these different realities in contact with one another? At issue is the redesign of growth policies to add models from the bottom up. There are no simple answers regarding social development. There is no road to Utopia. Neither is development a question of patience. Ours is a revolution to add a sense of humanity to the global concept.

Five elements are necessary: the lion's share of public expenditure should be earmarked for social development programs; accessible credit should be tailor-made to individual realities; human capital formed; infrastructure should be created; and creative capacity must be distributed. This last is distribution not just of income, but of entrepreneurship capacity. To me it is the backbone of social development, but it is only possible through the private sector's intense participation in social development policies.

It is exactly these linkages on which we in Mexico are now beginning to work, with the purpose of taking great advantage of the globalized era. We have focused anti-poverty policies on a geographical basis through 13 totally differentiated lines of action. We are integrating people who live in poverty into local productive chains, raising possibilities both of diminishing poverty and regenerated economic growth. More than 6,500 projects and 2,000 enterprises are being created this year to enforce this approach. Entrepreneur by entrepreneur, we are inviting the people to adopt social projects. And it is this policy - which relies on no less than the creative capacity of people - which will ultimately be a sustainable approach to development.

Esteban Moctezuma Barragán is Secretary of Social Development of Mexico.