Albright: Solving Cold War easier than solving refugee crisis

IMF’s Christine Lagarde and former Secretary of State Madeline Albright discuss poverty at the Albright Institute, Wellesley College.
Source: Wellesley College
IMF’s Christine Lagarde and former Secretary of State Madeline Albright discuss poverty at the Albright Institute, Wellesley College.

​Four of the world's most influential leaders gathered at an all-women's college on Sunday afternoon​.

The occasion? Tackling global inequality. ​Or as Christine ​Lagarde put it, sexist inequality.

​"Inequality, just like poverty for that matter ... is sexist​,​" said the managing director of the IMF. Out of the 62 richest billionaires in the world, 53 of them are male, she said.

​Lagarde refers to Oxfam's finding that the world's 62 richest billionaires have as much wealth as half the world population. If this is expanded to the top 1% of the richest people, they have more wealth than everyone else combined.

Inequality took on many faces that afternoon: characterized as "a sign of a broken society," by Sri Mulyani Indrawati, managing director and chief operating officer of the World Bank. And in the context of the Syrian refugee crisis, inequality was described as the consequence of failed diplomacy to prevent conflict in the region, according to Lord Mark Malloch-Brown, former deputy secretary general and chief of staff for the United Nations.

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Inequality, in a simple, classic definition, is extreme poverty, which has been shrinking very rapidly. People living in extreme poverty in the world — defined as those living under $1.25 per day — has been halved in the past ten years, according to the United Nation's most recent progress report on Millennium Development Goals, which world leaders hoped to accomplish by 2015.

But the challenge lies in identifying and tackling new forms of inequality in the modern era.

Today's technology-driven world makes inequality dangerous, said Madeleine Albright, the former U.S. Secretary of State. "It's dangerous because with technology, the poor know what the rich have." In order to get people motivated to address inequality, Albright said "we do have to talk about the danger. That [inequality] is wrong but it's also dangerous."

But in the advanced economies, inequality becomes more finesse. Lagarde pointed to the gender pay gap. For instance, female workers in the U.S. make only 79 cents for every dollar earned by men.

"One way to tackle inequality is actually to reduce the gender gap and to make sure that women have the same opportunities and eventually the same income for the same skills and jobs as men. You would reduce inequality by a big, big amount," Lagarde said.

She applauded President Barack Obama's order last week requiring companies with more than 100 workers to share salary data with the federal government. The data would break down how much employees are paid based on gender, race and ethnicity. Armed with this information, the Equal Employment Opportunity Commission would have the power to legally pursue companies that maintain a gender pay gap within their employee ranks.

Albright emphasized the necessity of public-private partnerships to decrease modern-day inequality.

"These issues are too big for governments to deal with alone. And some of the issues of inequality or ... corruption are also things that have to be dealt in both the public and private sector together," Albright said.

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She also expressed frustration with the world's inability to solve one of the most pressing inequality issues today — the Syrian refugee crisis.

"The cold war was piece of cake in comparison to this," Albright said. "The world [back then] was divided between the 'red' and the 'red white and blue' and at this point, it is hard to keep track of who is who."

Solving the refugee crisis is not only a morally-correct thing to do, it is also an economically-beneficial thing to do, according to Albright, especially given Europe's aging population and the need to replenish the continent's workforce.

"If life was logical, you might be able to use some of the well-educated coming out of the Middle East in order to help in terms of alleviating some of the work related issues," Albright said.

Lagarde echoed this economic incentive:

"We've tried to measure the benefit for those countries that would be prepared to integrate well the flow of refugees ... the typical tendency is to say it's going to be a fiscal cost for me because I'm going to have to give special welfare benefits, I'm going to provide some housing, I'm going to have to provide some education. But down the road, in a fairly short to medium term, there is actually benefits to be had ... because of the increased consumption. Bottom line, on average within the European Union, it's a potential increase of 0.2 percent of growth. You'll say this is not much ... well, in countries were growth is 1.2 to 1.5 [percent], to have another 0.2 is actually a plus. But that music is not being heard at the moment. One day it will be heard, I hope. We'll continue singing it."