Social inclusion and poverty alleviation: economic and policy impacts on lack of access to basic necessities
In every country, some minorities or social groups face barriers that prevent them from fully participating in political, economic, and social life. These groups may be excluded not only through legal systems, land and labor markets, but also through discriminatory or stigmatizing attitudes, beliefs or perceptions.
Disadvantage is often based on social identity, which can cross dimensions of gender, age, position, income, occupation, race, ethnicity, religion, citizenship status, disability, and sexual orientation and gender identity, among other factors. This type of social exclusion deprives individuals of dignity, security, and the opportunity to lead a better life. Unless the root causes of structural exclusion and discrimination are addressed, it will be difficult to sustain sustainable inclusive growth and rapid poverty reduction.
The current COVID-19 pandemic has put a spotlight on deeply entrenched systemic inequalities. As the COVID-19 pandemic continues to have far-reaching impacts worldwide, it is important to understand the differentiated and intensified impact it has on the most marginalized and poorest segments of the population. In 2020, according to Istat data, just over two million households (7.7 percent of the total from 6.4 percent in 2019) and more than 5.6 million individuals (9.4 percent from 7.7 percent) are in absolute poverty in Italy. After improving in 2019, absolute poverty increases in the pandemic year, reaching the highest level since 2005 (beginning of the time series).
For example, many people with disabilities have underlying health conditions that can make them particularly vulnerable to severe COVID-19 symptoms if they contract it. Women and children are affected by increasing rates of domestic violence as a result of closures. In some contexts, racially marginalized groups that have traditionally been excluded from the health care system have had higher mortality rates than other groups and have had difficulty accessing pandemic information, access to equitable care, basic necessities, and vaccines.
Social inclusion also has economic value: if not addressed, exclusion of disadvantaged groups can be costly. At the individual level, the most commonly measured impacts include lost wages, poor education and employment outcomes. Racism and discrimination also have physical and mental health costs. At the national level, the economic cost of social exclusion can be represented by lost gross domestic product (GDP) and human capital wealth.
Exclusion can cause certain social groups to forego markets, services and spaces, with costs to both individuals and the economy. Globally, the loss of wealth in human capital due to gender inequality alone is estimated at $160.2 trillion. 90% of children with disabilities in developing countries do not attend school.
Social inclusion is vital to achieving the World Bank’s twin goals of ending extreme poverty and increasing shared prosperity. L’Enviromental and Social Framework (ESF) of the World Bank, which applies to all investment projects, emphasizes that social inclusion is central to all World Bank financial interventions to achieve sustainable development. Inclusion is also a priority in global recovery from the COVID-19 pandemic. Stimulus packages for recovery from COVID-19 will need to be designed to counterbalance growing social gaps and will need to avoid creating new forms of exclusion. The crisis is also an opportunity to focus on rebuilding more inclusive systems that enable society as a whole to be more resilient to future shocks, whether health, climate, natural disasters or social unrest.