Session 2. The Conflict Between Rich and Poor
List of speakers

Within the framework of the 14th Annual meeting of the Valdai Discussion Club the second session, titled "The Conflict between Rich and Poor” was held. The experts identified main reasons for such a complex problem as inequality, as well as possible solutions.

According to experts, at present there is a need for a common understanding of how the gap between rich and poor is connected with geopolitical, economic and demographic dynamics, how it feeds tension and conflicts on class, ethnic, racial, gender and religious grounds. The stratification turns out to be the most acute social problem - on the global level, between countries, and on the local level, inside states. According to experts, the reasons for inequality should be analyzed both from the perspective of the historical perspective and the current conditions: there are historically emerged forms of inequality associated with slavery, oppression and discrimination that are overlapped with the newly emerging class stratification. It is important to diagnose accurately the causes of inequality in order to allow policy-makers to take the right decisions.

According to one of the experts, the Westphalian system of state structure no longer supports the world order. Global governance does not provide the elimination of inequalities within and between regions of the world. Experts drew attention to the disappointment with the international financial system, which is experienced by many countries. As one participant noted, the developed countries have built ties among themselves, which are dishonest in relation to other players. For example, the US created swap lines only with those states that were of interest to it. In response, new institutions such as the BRICS New Development Bank are being created. This leads to a fragmentation of the global financial governance system, to decentralization, and increases its unpredictability.

According to one of the experts, often the growth of inequality within countries is related to how they approach this problem. As a successful example, the expert cited China, where over 30 years of reform 700 million people were withdrawn from poverty. The recipe of China consists of three points: 1. Fighting protectionism, developing free trade; 2. Maintaining social stability in society; 3. Infrastructure development, such as One Belt, One Road project.

In Russia, poverty was reduced thanks to oil rent in the 2000s. One participant pointed out, that the new model of economic growth and the system of redistribution of incomes play a major role in combating inequality in Russia and many other states.

In developed countries, the problem of inequality is primarily related to the improvement of technology. One of the main drivers of the social inequality growing is computerization and automation. According to one of the western experts, despite all the advantages that new technologies bring, in the long term the consequences of their development will be negative. According to estimates, more than 57% of existing jobs in developed countries will be replaced by robots in two generations. Undoubtedly, new jobs will appear, but they will be more low-paid.

Experts agreed that one of the solutions to the problem of inequality in the medium term could be universal basic income. It will reduce the negative effects of automation.

Experts also agreed that the most important aspects of inequality are the demographic situation and migration. Africa in terms of population will be equal to Asia by the end of this century, and India will soon overtake China. The convergence of demographic expansion, urbanization, poverty and unemployment, in conjunction with environmental degradation, creates a time bomb in many countries around the world. This generates migratory processes, exacerbating already existing internal contradictions in the so-called northern developed societies.

Almost all experts share the view that migration can be manageable, but it cannot be stopped. This understanding should be the key to find solutions of problems in this area. At the same time, as the participants noted, any society has its own threshold ability to accept migrants. This, in turn, depends on the ability of migrants to adapt.

Rich states can reduce the severity of the migration problem, first of all, by creating conditions for the development of those countries, from where migration takes place. In particular, according to one of the experts, it is possible to solve the problem of migration from Africa only through the socio-economic development of the countries of this continent.

Overcoming poverty and the gap between rich and poor within and between regions of the world should also be based on the demilitarization of international relations, taking into account the serious reform of the UN Security Council. The UN Security Council needs to agree to lower military spending and channel funds for sustainable development and assistance to poor countries. This can be the only way to redistribute ample resources to resolve economic, environmental and non-military challenges, various forms of inequality in the interests of sustainable global security.

The solution of the problem of inequality is also possible through the development of regional and continental integration in Africa, by strengthening of regional economic communities. One participant noted the need to create an effectively functioning Arab Maghreb Union, which, together with the EU, would deal with problems, including migration. A true partnership between South Europe and North Africa should be established. Euro-African integration can play a crucial role, given that Africa is the continuation of the Eurasian supercontinent. This configuration will determine the future, the expert stressed.

See also Session 1. The Conflict Between Differing Geopolitical Worldviews