Under The Knife: Human Rights and Inequality in the Age of Austerity

In the wake of the global economic crisis austerity appears to have become the new normal. The fiscal austerity drive that has been aggressively pursued in Europe is now spreading around the world, with the International Labour Organization predicting that some 132 nations will implement significant reductions in public spending over the next few years. And with the ‘Brexit’ crisis in Europe fuelling fears of longer-term economic instability, the storm clouds of fiscal tightening are gathering in all corners of the globe. Moreover, these austerity programs – generally comprising severe cuts to social expenditure, along with regressive tax hikes, and reforms to pensions, social welfare and labour protections – are intensifying despite ample evidence of the negative impact on human rights. As the Center for Economic and Social Rights (CESR) has documented over many years and in several different contexts, austerity policies have mounted a widespread and systematic assault on economic and social rights, particularly the rights to decent work, an adequate standard of living, food, health, housing and social security. While the nature and impact of the policies introduced vary from one context to another, one constant is that those facing poverty, marginalisation and discrimination are always hit hardest. Across Europe, a stark pattern of growing inequality and deterioration in economic and social rights has emerged. Spain, for example, has experienced one of the largest increases in child poverty since the onset of the crisis, and has now become one of the most unequal countries in Europe. A similarly unsettling scenario of widening deprivation and increased disparities unfolded in Ireland as a series of austerity budgets prioritised social spending cuts over progressive tax reforms. Austerity packages are now being rolled out in Latin America as economic recession looms in the region, including in previously buoyant upper middle income countries. In Brazil, for example, the government responded to economic slowdown by announcing a fiscal adjustment of US$24 billion in 2015, with budget cuts falling principally in the areas of education, social protection, racial equality and human rights. According to the ILO, some 81 developing countries are set to reduce public spending between now and 2020, with East Asia and Sub-Saharan Africa expected to be the worst hit regions. The renewed austerity drive is all the more alarming in view of growing evidence that it has also failed in its principal objectives. Numerous studies have highlighted the “fiscal fallacies” behind the dogma of austerity: government deficits are portrayed as a result of profligate public spending, and proof that the social welfare state is an unaffordable impediment to growth and competitiveness. In reality, many countries’ budget deficits were the result of massive financial sector bailouts, decreased revenues due to economic downturn and the cost of necessary but short-lived post-crisis stimulus measures. The belief that fiscal adjustment and reduced public spending would lead to increased private sector confidence and investment has also proved unfounded. Rather than staving off the worst impacts of the economic crisis, fiscal contraction has brought many developed countries to the edge of a severe and lasting depression. Even the IMF, which made fiscal consolidation a precondition for emergency loans in several crisis-hit countries, has eventually admitted that the case for austerity has been “oversold” and its costs in terms of rising inequality, lower employment and declining growth have been “underplayed”. The argument that, with government coffers all but exhausted, there is no alternative to austerity has also been widely discredited. Extensive research has demonstrated that, even in the poorest countries, sufficient fiscal space exists for social protection programmes to be reinforced rather than cut back. CESR’s research on fiscal alternatives to finance international development has shown that a range of progressive tax reforms, coupled with a concerted international effort to confront tax abuse and avoidance, could generate over US$2 trillion dollars in public finance that governments could use to meet their human rights and sustainable development commitments. Our research in countries such as Spain and Egypt that have experienced dramatic cutbacks to social spending in the name of austerity has also shown that a concerted effort to address tax evasion would generate more than enough revenue to achieve deficit reduction targets without any need for spending cuts. All too often, the austerity context has restricted the space for civil society organising and political participation, as the perceived need for extraordinary measures leads to political exclusion and retrenchment in democratic accountability. As CIVICUS’ State of Civil Society Report 2016 finds, austerity-hit countries see the space for civic participation and dissent being stripped away, they are also facing capacity limitations as their funding dwindles. Access to domestic legal remedies has simultaneously been undermined by austerity cuts that target the budgets of judicial systems and reduce their capacity. This has led many civil society groups to seek accountability at the international and regional levels. For example, coordinated civil society engagement in shadow reporting led to the governments of Spain and the United Kingdom being called to account for their austerity programmes before the UN Committee on Economic, Social and Cultural Rights. Civil society efforts have also found success in pushing regional accountability bodies such as the Inter-American Commission on Human Rights to engage more proactively in confronting the human rights impacts of austerity and scrutinising states’ fiscal policies through the lens of human rights principles. As the juggernaut of “fiscal consolidation” continues to thunder forward civil society must open up new avenues for accountability to confront the injustice of austerity. While strategies to achieve this will of necessity be manifold, one clear opportunity for international civil society collaboration lies in the recently agreed Sustainable Development Goals (SDGs). The SDGs contain commitments to policy reform over the next 15 years that, if implemented, would reverse many of the harmful trends and impacts witnessed in the era of austerity. SDG10, for example, commits governments to reduce inequality within and among countries, including through fiscal, wage and social protection policies, along with improved regulation of the finance sector. The SDG commitments will remain paper promises unless there is ceaseless vigilance and pressure from civil society for their implementation, however. They will also require meaningful accountability systems at national, regional and international levels to ensure that the targets set are reflected in all relevant policy programmes, and that governments and the private sector are held answerable. Whether the SDGs live up to their potential depends on how effectively civil society activists around the world can maintain the pressure for human rights to be at the core of the economic and development agenda, in order to bring about a transformational shift from austerity to accountability.