Sri Mulyani: Economics growth without inclusion will fail – transcript

If you ask me what drive my thinking on development I have to say it is inclusion I have to admit that I’m obsessed with inclusion. Inclusion is a simple but yet powerful concept morally right and economically smart. Let me explain when economy grows without being inclusive to start with the benefit of growth and rising income and not evenly distributed but there is more to it

I believe exclusive exclusive growth it’s really like a poison it is deadly but kills slowly, failure is only a matter of when and how not if. Growth without inclusion is harmful it’s damaged the social fabrics it destroying the trust the leadership and even wear down society because there is no commitment from the community and I’ve seen that my first firsthand in my own countries Indonesia back in  1990

Indonesia was a poster child for developing country we grew at a very robust and impressive rate up to nine percent per annum even the poverty went down but the problem at that time our president President Suharto was ruling the country in the authoritarian way,  we have Parliament but there was no really check and balances,  there is no transparency, there is no accountability.

Soeharto  main interest is actually the well-being of his family and a few friends who control almost the economy so while the West including the bank at that time applauded him for his economic performance the country actually drive with corruption cronyism nepotism and dominated by a climate of fear so we had enough the financial crisis in 1998 has created or trigger the national wide student movement we call it the reformasi movement.

I was actually teaching at the University of Indonesia and I joined the student demanding a change we protested until Suharto resign so when the Arab Spring came to middle in 2010 I saw the history of Indonesia repeating itself the poison of exclusion finally bring the society to the tipping point so what are the symptom of this exclusion poison if you ever live in the society full with exclusion you can easily explain. You know that no matter how hard you try to improve your life you will not get the job that you are qualified for only because you don’t have a good connection or the right connection and if you start business you cannot get a good contract because you’re not paying bribe and that elite the few powerful elite  are only interested in protecting their each other vested interests and if you are coming from the poor family it is likely that you will stay poor.

These are all the description how damaging the exclusion poison is to change the society from the non-transparent non-participatory into an open fair and inclusive is really a major undertaking but it is worth it today

We know so much about the inclusion which is matter and there is a lot of evidence, for example gender in many countries both developing countries or even high-income countries girls and women are still constrained and subjected to so many constrain because of the rule the law the policy or even the norm they are excluded from the decision-making process in their own family or even in the society and the cause of keeping girls and woman behind a stifling. If woman cannot work or in this case cannot even have their own business it can cause up to 25 percent income loss in Middle East and here in Latin America it can cause up to 14 percent

On the other side the benefit of including girls and woman are so obvious I will give you an example when girls stay another year in a secondary school their income is going to be 25 percent higher and if a mother have the right to inherit the family property they will likely to spend twice as much for their daughter education so you can see the benefit is not only for that mother but for the next generation and companies when they have women in their leadership they are less likely to be embroiled in fraud and scandal so let me ask you which country in the world can afford to forego this social and economic benefit and this is also true for many different other society who did are marginalized because of their ethnicity their tribe their nationality or even their religion.

You see that my experience in my own country of exclusion has left an indelible mark on the way I think about development I think this is my mother’s fault my mother had 10 children six girls and four boys I’m number seven number seven is like a donkey actually she was not only a very lovable and devoted mother and wife but she had PhD in education and she was a very successful working woman she insisted on all of us to get a good education boys and girls and see the most important is helping all of us to navigate the Indonesian strict gender norm so when you grow up like me in which your family encouraged you to do well and defying stereotype.

You will be easily get suspicious of people who justify discrimination and exclusion and you know based on the evidence that a country which is applying exclusion they will keep for or they are becoming poorer while inclusion is always a benefit and never a cause I think we all need to remember this in everything we do be a student a next leader or as a policymaker and as a poverty visor.

Thank you very much

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