International Conference on ‘Economic Openness and Income Inequality: Policy Options for Developing Countries in the New Millennium’ Organised by IDEAs in collaboration with the Shanghai Administration Institute (SAI), Shanghai, China, 26- 27th August, 2006.

The workshop was followed by an international conference on ‘Economic Openness and Income Inequality: Policy Options for Developing Countries in the New Millennium’ during the 26th-27th of August 2006, again in local collaboration with the Shanghai Administration Institute (SAI). The conference had about 90 participants from 22 countries.

Beginning by looking at global trends from both a theoretical and an empirical perspective through 5 papers presented during the first two sessions, the conference followed up with region specific sessions on the issue of income inequality and trade liberalization. The regions covered were China, Asia including India and East Asia, Latin America and Africa. China received a lot of attention from both international and Chinese scholars because of its current conjuncture in terms of high growth but a critical situation vis a vis income and employment inequalities. The conference ended with a panel discussion on the key issues that the papers brought attention to and what it implied it terms of policy advocacy.

The topic is of great relevance in the current conjuncture as the question of rising inequality globally and more importantly, within countries and especially in the developing world has dogged the current stage of globalization and the widespread adoption of neo-liberal policies. This phenomenon has been witnessed not only in least developed countries of Africa, crises plagued Latin America and the transition economies but in the growing and even thriving countries in Asia. Growing inequality is obviously a serious economic problem that needs to be addressed not only in terms of redistributive justice but because it undermines the achievement of economic growth in terms of what growth can actually do for the well being of the people. Simultaneously, it also generates feelings of discontent and marginalisation among people which ultimately threatens the process of growth itself. In countries where there is no significant economic growth or negative growth, this phenomenon has an even more catastrophic impact. A large part of the process of growing inequality across borders has been an outcome of the bigger policy framework of economic reform and growing openness to international trade and finance, but it has also been significantly affected by domestic macroeconomic and other policies. While governments in some of those countries, among them China, have undertaken some initiatives to address this issue, much of the developing world still needs to focus on this issue, explore its nature and causes and devise a multilateral policy framework to cope with this problem.

Economic assessments of the impact of globalization differ, inter alia, on the nature and determinants of inter-country and intra-country distributional outcomes in recent years. There is no consensus on how such inequalities have moved and on what influences changes in such inequalities in either direction. Further, such differences on intra-country inequality relate not only to the poor performers among the developing countries, but even to the rapidly expanding economies in Asia. There are three related issues of relevance in this context: (i) the relationship between the increasingly homogenous patterns of growth across countries and the adoption of policies that emphasize economic openness and the primacy of markets; (ii) the relationship between this pattern of growth and distributive outcomes; and (iii) the trends in inequality and relative deprivation in recent years. The sessions in the workshop and conference addressed these themes, with focus on the alternatives that are necessary and feasible in the current conjuncture and the foreseeable future.

Below is a list of the papers and speakers during the conference:

Day 1, Session 1

• Chair: Wang Zhiping, Director, Economics Department, Shanghai Administration Institute, Shanghai, China

• Wang Guoping, Economics Department, Shanghai Administration Institute, Shanghai, China: ‘Reflections on the Inequality of Income Distribution’

• Prabhat Patnaik, Professor, Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi, India and also Vice Chairman, Planning Commission, Kerala, India: ‘Trade, Disproportionality and Retrogression’

• Andrea Giovanni Cornia, Professor, Department of Economics, University of Florence, Italy: ‘Intra-country Changes in the Distribution of Income and Wealth during the Last Forty Years’

• Discussant: Li Shi, Professor, School of Economics and Business, Beijing Normal University, China

Day 1, Session 2

• Saul Keifman, Professor, Department of Economics, University of Buenes Aires, Argentina: ‘Economic Openness and Inequality: Deconstructing Some Neoliberal Fallacies’

• Andong Zhu, Assistant Professor, School of Humanities and Social Sciences, Tsinghua University, Beijing, China: ‘State-Owned Enterprises and Income Inequality: Evidence from Mixed Economies’

• Discussant: Abhijit Sen, Professor, Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi, India and also Member, Central Planning Commission, India

Day 1, Session 3

• Chair: Cui Zhiyuan, Professor, School of Public Policy and Management, Tsinghua University, Beijing, China

• Angang Hu, Professor, School of Public Policy and Management, Tsinghua University, Beijing, China and Director, Center for China studies, Chinese Academy Of Sciences, Beijing, China: ‘Regional Change of Human Development in China (1982-2003)’

• Wang Sangui, Institute of Agricultural Economics, Chinese Academy of Agricultural Sciences, also, Head, China Poverty Research Association ‘Community-based Development and Poverty Alleviation: An Evaluation of China’s Poor Village Investment Program’

• Wu Guobao, Director of Poverty and Development Finance Division, Rural Development Institute, Chinese Academy of Social Sciences, Beijing, China: ‘Does Inequality in Access to Credit Affect Farmers’ Income Inequality?’

• Dic Lo, Professor, School of Economics, Renmin University, Beijing, China and at School of Oriental and African Studies, University of London, UK : ‘Making Sense of China’s Economic Transformation’

Session 3 Continued

Panel Discussion on China: Response and More 

• Chair: Cui Zhiyuan, Professor, School of Public Policy and Management, Tsinghua University, Beijing, China

• Li Shi, Professor, School of Economics and Business, Beijing Normal University, China

• Zhao Renwei, Professor of Economics, Institute of Economics, Chinese Academy of Social Sciences, Beijing, China

Day 2, Session 1

• Abhijit Sen, Professor, Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi, India and also Member, Central Planning Commission, India and Himanshu, Fellow (Economics), The Centre de Sciences Humaines (CSH), New Delhi, India: ‘Recent Evidence on Poverty and Income Distribution in India’

• Medhi Krongkaew, Professor of Economics and Director, Center for Poverty Studies, School of Development Economics, National Institute of Development Administration (NIDA), Bangkok Thailand and Ragayah Mat Zin, Director, Institute of Malaysian and International Studies (IKMAS), National University of Malaysia, Bangi, Malaysia: ‘Income Distribution and Sustainable Economic Development in East Asia: A Comparative Analysis’

• Discussant: Francis Cripps, Alphametrics Ltd, Bangkok, Thailand

Day 2, Session 2

• Carlos Medeiros, Professor, Department of Economics, Universidad Federal de Rio de Janeiro ( Federal University of Rio De Janeiro ), Brazil: ‘Growth Patterns, Income Distributions and Poverty: Lessons from the Latin American Experience’

• Juan Carlos Moreno-Brid, Senior Economic Affairs Officer, Economic Commission for Latin America and the Caribbean (ECLAC), United Nations: ‘Social Welfare and Protection: Latin America’s Main Challenges for the XXI Century’

• Charles Abugre Akelyira, Head of Policy and Advocacy, Christian Aid, UK, (from Ghana): ‘Macro Policies and the Development Project in Africa’

• Discussant: Praveen Jha, Associate Professor, Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi, India

Panel Discussion 

‘Economic Openness and Income Inequality: Policy Options for Developing Countries in the New Millennium’

• Moderator: C P Chandrasekhar, Professor, Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi, India, and is also a member of the Executive Committee of IDEAs

• Angang Hu, Professor, School of Public Policy and Management, Tsinghua University, Beijing, China and Director, Center for China studies, Chinese Academy Of Sciences, Beijing, China

• Prabhat Patnaik, Professor, Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi, India and also Vice Chairman, Planning Commission, Kerala, India

• Giovanni Andrea Cornia, Professor, Department of Economics, University of Florence, Italy

• Jayati Ghosh, Professor, Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi, India, who is also the Executive Secretary of IDEAs

• Franklin Serrano, Professor, Department of Economics, Universidad Federal de Rio de Janeiro ( Federal University of Rio De Janeiro ), Brazil