Inequality and the Struggle for Roma Rights
10 July 2002
Anyone who has engaged with marginalised Romani communities struggling to realise even their most basic rights is familiar with the constraints imposed on this struggle by poverty. As noted in several articles in the last edition of the European Roma Rights Center's Roma Rights journal2, poor housing, education, health care, income levels, and political access, and the associated demands of daily survival, place severe burdens on Romani communities endeavouring to achieve a better life.
Dena Ringold notes in her Roma Rights article3 that poverty can be measured in both absolute and relative terms. The concept of absolute poverty is fairly straightforward – a fixed minimum package of goods and services is defined, and any person unable to obtain that package is deemed poor.4 But when we speak of relative poverty we confront a more complex set of considerations. To view those who are worse off than most others in society to some defined degree as poor,5 even if their basic physical needs are being met, is to express poverty not in material terms but rather in terms of the asymmetrical relationship of the disadvantaged with political, social, and economic institutions as well as with their more privileged counterparts. When we speak of relative poverty, we are in fact speaking of inequality.
There is little disagreement that absolute poverty is bad for Romani communities, leaving them deprived of life's basic material necessities. But prevailing economic doctrine in Central and Eastern Europe views relative poverty as far more benign. The World Bank argues, for example, that:
Positive developments largely explain the rise of inequality in the CSB [Central and Southeastern Europe and the Baltics]: rising returns to education, decompressing wages, and emerging returns to risktaking and entrepreneurship. These forces are welcome despite the increase in inequality, because they signal that the market is now rewarding skills and effort, as in more mature market economies.6
This quote is characteristic of the neo-liberal take on increased economic inequality in the CSB economies, which tends to emphasise the greater relative rewards of the transition's "winners" rather than the absolute losses – in terms of employment, purchasing power, education, health care, housing, and overall quality of life – of its "losers." The suffering of the losers is rather seen as a necessary consequence of the discontinuation of unsustainable market interventions and social support payments by governments. Economic inequality is viewed as relatively unimportant, so long as the objective conditions of Romani communities improve. This, generally speaking, has yet to happen, but according to the prevailing model, with sound economic practices promoting trade and entrepreneurship, democratic institutions and rights protections, and some targeted and sectoral help, it will eventually.
But might inequality in and of itself be dangerous for Romani communities? Consider the experience of the United States, where, despite an increase of approximately 25% in median real income over the last thirty years7, roughly the same percentage of Americans are poor (in absolute terms) today as were in the early 1970s.8 A small wealthy slice of the population has reaped most of the benefits of US growth, causing the economic divide between rich and poor to nearly double between 1979 and 1997.9
The US case makes clear that growth is no guarantee of absolute poverty reduction when new wealth is concentrated in a few hands, and suggests that at least in some countries reducing inequality may be key to reducing absolute poverty. A recent UNICEF study on Russia reached the same conclusion, projecting that a 10% reduction in inequality, even combined with zero growth, would reduce that country's absolute poverty rate from 17% to 11%, while a 10% growth rate combined with zero inequality reduction would reduce the poverty rate only to 15%. Not surprisingly, the study predicted that the greatest poverty reduction would be achieved by a combination of growth and reduced inequality.10
To be sure, the United States and Russia present different cases from, for example, Hungary, Poland, or the Czech Republic, which have lower inequality rates than the United States or Russia, and generate far less wealth than does the US. Indeed, these three countries have kept in place economic policies that have gone a significant way toward ameliorating the inequality leap that has taken place throughout the region during the transition. A 1998 study found that in the Czech Republic during the transition years "increased inequality of labour earnings was largely compensated for by changes to the tax and, especially, the transfer system."11 Another report calculated that Hungary's relative child poverty rate would jump from 10.3 percent to 38.1 percent in the absence of re-distributive taxes and transfers, while Poland would see a jump from 15.4 to 44.4 percent under the same conditions. In contrast, the US relative child poverty rate, already far higher than both Hungary and Poland at 22.4 percent, would only rise to 26.7 percent in the absence of re-distributive taxes and transfers, another indication of how little US economic policy seeks to address inequality.12
Thus the leading countries of the region deserve some credit for redistributing resources to the most vulnerable communities. Yet inequality has continued to increase, and it is not immediately clear whether the line separating "good" inequality – i.e., that which facilitates economic growth which in turn lifts all boats, including those of the poorest Romani communities – from "bad" inequality – i.e., that which stratifies society to the point that poor communities are too marginalised to benefit from growth, no matter how rich the country becomes – has been crossed.
In tackling this question, we should consider the additional danger inequality may pose to Roma and other disadvantaged communities due to the social and institutional dynamics it is likely to encourage. Take as an example the emergence of so-called "elite" schools throughout the region, from which Romani children are generally excluded. These institutions represent structures of inequality that are being embedded in the societies of Central and Eastern Europe and will have the effect of perpetuating the inequality of which they are, in part, a result. Thus the children of the transition's "winners" receive a private or semi-private education and are better placed to become "winners" in the next generation, and so on, while the inferior education received by poorer children enhances the likelihood that they will be their generation's socio-economic "losers." Similar structures of inequality can be seen taking shape across the region in the areas of health care, housing, and political access, among others.
The structures of inequality currently taking shape in the region are especially dangerous for Romani communities, because they have the potential of sanitising and reinforcing existing structures of inequality built on centuries of racism, even as governments adopt formal mechanisms to defend minority rights. The chapter on Romani education in Bulgaria in the Open Society Institute's Roma Education Resource Book provides a telling example. In 1999, the Bulgarian government adopted the "Framework Program for Equal Integration of Roma in Bulgarian Society" which set out a number of measures for promoting full participation of Roma in Bulgarian society, including educational measures aimed at ending segregation and equalising academic opportunities for Roma children. This marked a major achievement in the Bulgarian struggle for Roma rights. Yet the same year, the College of the Ministry of Education and Science implemented a new plan whereby textbooks would no longer be provided free of charge to students from the 1st to the 8th grade, but only to 1st grade students.13 Roma in Bulgaria are disproportionately represented among the poor and even within the ranks of the poor their "poverty depth" is more extreme.14 Thus the removal of the textbook subsidy for grades 2 to 8 will likely hit Romani students the hardest. The policy shift is presented in race-blind, economic terms, but its impact is almost certainly discriminatory, leaving Roma students even further behind their privileged "elite school" contemporaries. Meanwhile, the adoption of the Romani integration document heralds Bulgaria's supposed movement toward a racism-free society.
The legitimising of racial divisions through "race-blind" economic inequality carries the additional danger of contributing to racist attitudes among non-Roma. With formal equality, minority rights protections under the law, and various government and non-governmental organisation programs specifically targeting Roma, some non-Roma who are ignorant of the larger forces at work may feel that Roma are receiving special treatment they do not deserve, and that their poverty and marginalisation result from their purported laziness, deviance, stupidity, and backwardness. Indeed, anecdotal evidence suggests that such attitudes are already quite common throughout the region. Moreover, asymmetrical relationships between Romani communities and local and national authorities are likely to result in compromised enforcement of formal protections, thus reinforcing the de facto impunity enjoyed by many of those who discriminate against or attack Roma.
These potential dangers of inequality point to the importance of economic policy, which represents the third side of a policy triangle that determines in large part the degree to which Romani communities enjoy equal participation in their home societies. The other two sides of the triangle – political/legal protections and targeted interventions (sectoral and Roma-specific) – are crucial, but may well be undermined if post-transition economies are built in such a way that Roma and other poor communities are structurally marginalised. In other words, social and political/legal mechanisms of inclusion could be neutralised by economic mechanisms of exclusion.
The Bulgarian schools example is indicative of the priority generally accorded to the economic side of the triangle. Indeed, where there is a perceived conflict between the economic agenda of growth and fiscal and monetary targets and the social agenda of interventions necessary to breathe life into political/legal protections, the economic agenda virtually always wins out. The Hungarian government's 2001 discussion paper on long-term Roma strategy provides a typical example, stating: "In Hungary, even despite continuing economic growth, financial constraints impeding the realisation of the long-term Roma strategy are likely to remain."15 Though the language suggests objective and immutable limits, these "financial constraints" are of course subjectively defined in the context of neo-liberal economic policy parameters, themselves defined in large part as a result of the influence of external actors.
A rather striking glimpse of this influence in action is provided in a recent Organization for Economic Cooperation and Development (OECD) report on Hungary, which exactly two paragraphs following a brief mention of concern regarding "the country's historically disadvantaged Roma population" expresses the following opinion:
The situation in the gas sector is worrisome with the government proposing to purchase the gas production and transportation network from the dominant privately-owned energy group and let the current artificially low household prices approach the market level over a number of years… The authorities are encouraged to reconsider such regressive moves and resume the liberalisation agenda.16
The conflict between the interests of poor communities that will surely suffer if "artificially low" gas prices are liberalised immediately and the privatisation agenda is not acknowledged in the report, but there is no question that the latter wins out. This prioritising of economic policies that in many cases exacerbate inequality over social policies intended to address that same inequality bodes ill for already marginalised Romani communities.
International financial institutions exercise tremendous influence not only at the level of individual decisions but in the intellectual framing of overarching policy questions, including assessments of what constitutes "good" and "bad" inequality. Thus the World Bank's view that increased inequality in CSB countries is basically healthy has likely helped to shape the view of policy makers throughout the region. Yet this take on inequality appears to discount seriously the potential threat inequality poses to poverty alleviation efforts, and to ignore completely the long-term structural consequences of the inequality created during the transition, particularly as they relate to existing structures of racism. There is a glaring disconnect between a situation analysis that recognises competitive disadvantages and racial discrimination as factors contributing to the dire situation faced by many Roma communities,17 and a policy stance that views as healthy the very inequality that makes Roma less competitive and more vulnerable to acts of racism.
Economic policy makers must choose between two basic approaches. One puts growth first, allowing for poverty alleviation only to the extent that it is consistent with growth; the other puts poverty alleviation first, allowing for growth only of a nature and to the extent that it facilitates poverty alleviation. Among the defining distinctions between these two approaches is how each treats inequality. Policy makers in Central and Eastern Europe have generally followed prevailing international economic doctrine and prioritised growth. As such they may be prepared to accept a higher degree of inequality than would be accepted if reducing poverty were the top economic priority. The long-term danger is that the US model emphasising growth and virtually ignoring inequality will hold increasing sway over economic policy makers in the region. Such a development would portend many more generations of absolute poverty and marginalisation for Romani communities, who have always borne much of the brunt of inequality in Central and Eastern Europe.
Thus poor Romani communities and human rights activists who consider poverty alleviation to be the more important economic goal must contend not only with local and national governments but with an international policy framework and institutions that tend to put growth in the driver's seat. As such, it is important to assess economic policies and long-term plans with clarity and precision. A good starting point is a basic question: will a given policy increase overall economic inequality in the long term? If it does, there is reason for concern that no matter how much growth the policy produces, poverty will remain generally the same or increase, and structures of inequality may be created or reinforced that are particularly dangerous for Romani communities.
Some inequality is inevitably necessary in any economy and society, in order to reward risk-takers and entrepreneurs, to facilitate mobility and opportunity, and to achieve the economic growth necessary for poverty reduction. But the potential negative consequences of inequality for those holding the short end of the stick should lead anyone interested in the rights of Roma and other oppressed people to scrutinise conditions of inequality very carefully, lest the economics of exclusion eviscerate hard-won gains in the political and social spheres.
- James Whooley is the Regional Director of the American Friends Service Committee's Europe Program, which runs the Roma School Success Program, a Budapest-based Romani education program, and the Summer Work Exchange Project, a Romani community empowerment initiative currently based in Pernik, Bulgaria.
- See "Extreme Poverty," Roma Rights, Number 1, 2002, on the Internet at: Extreme Poverty.
- Ringold, Dena, Poverty Roma Rights, Number 1, 2002.
- The World Bank's absolute poverty lines of $2.15 per day for poor countries and $4.30 for middle income countries exemplify this approach, as does the official poverty measurement in the United States, which determines the amount needed for an adequate diet and multiplies by three, on the assumption that food expenditures represent one-third of living costs.
- A common approach is to define as poor any household with income below 50 percent of the national median.
- World Bank, "Transition: The First Ten Years - Analysis and Lessons for Eastern Europe and the Former Soviet Union", World Bank, 2002.
- Median income in the US in 1970 was $33,721 in 2000 dollars. In 2000 the median income in 2000 dollars was $42,148. See US Census Bureau, Money Income in the United States: 2000, Table C, US Census Bureau, September 2001.
- The US poverty rate in 1973 was 11.1 percent of the population. In 2000 it stood at 11.3 percent. Institute for Research on Poverty, University of Wisconsin, "Who is Poor?",http://www.ssc.wisc.edu/irp/faqs/faqs3.htm , accessed 7 June 2002. Also see US Census Bureau, "Poverty in the United States: 2000, US Census Bureau, September 2001.
- Congressional Budget Office, Historical Effective Tax Rates, 1979-1997, September 2001, Table G-1C, as cited in Jencks, Christopher, "Does Inequality Matter?", Daedalus, Winter 2002.
- Klugman, Jeni, John Micklewright and Gerry Redmond, "Poverty in the Transition: Social Expenditures and the Working-Age Poor", Innocenti Working Paper No. 91, UNICEF, 2002.
- Garner and Terrell (1998), as cited in Flemming, John and John Micklewright, "Income Distribution, Economic Systems, and Transitions", Innocenti Occasional Papers - Economic and Social Policy, Series Number 70, May 1999, http://www.worldbank.org/research/transition.pdf/eps70.pdf , accessed 7 June, 2002.
- United Nations Children's Fund, "A League Table of Child Poverty in Rich Nations," Innocenti Report Card Issue No. 1, June 2000, UNICEF Innocenti Research Center, June 2000,http://www.unicef-icdc.org/publications/pdf/repcard1e.pdf , accessed 8 June 2002.
- Tanaka, Jennifer and Christina McDonald, "Roma in the Educational System of Bulgaria", The Roma Education Resource Book, Open Society Institute, 2001.
- "[C]onsumption by poor Romani households is on average 37.5 percent below the poverty line, while at the national level consumption of poor households is, on average, 6.9 percent below the poverty line." Ringold, Dena, "Poverty and Roma in Central and Eastern Europe: A View From the World Bank", Op. cit.
- Ibolya, Dr. David, Minister of Justice, "Guiding Principles of the Long-Term Roma Social and Minority Policy Strategy," Hungarian Ministry of Justice, 12 July 2001, http://www.meh.hu/nekh/Angol/guiding.htm, accessed 8 June 2002.
- Organization for Economic Cooperation and Development, "Economic Survey - Hungary", OECD, 2002, http://www.oecd.org/pdf/M00030000/M00030527.pdf , accessed 7 June 2002. For a critical review of the impact of neo-liberal economic transition policy in Hungary, see Structural Adjustment Participatory Review Initiative (SAPRI) Hungarian National Committee, "Socio-Economic Impact of Structural Adjustment in Hungary," SAPRI Hungarian National Committee, 2001.
- Ringold, Dena, "Poverty and Roma in Central and Eastern Europe: A View From the World Bank", Op cit.