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In every country, some groups confront 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 discriminatory or stigmatizing attitudes, beliefs, or perceptions. Disadvantage is often based on social identity, which may be across dimensions of gender, age, location, occupation, race, ethnicity, religion, citizenship status, disability, and sexual orientation and gender identity (SOGI), among other factors. This kind of social exclusion robs 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 challenging to support sustainable inclusive growth and rapid poverty reduction. 

The current COVID-19 pandemic has put the spotlight on deep rooted systemic inequalities. As COVID-19 continues to have wide-reaching impacts across the globe, it is important to understand the differentiated and intensified impact the pandemic has on the most marginalized, including persons with disabilities, women, unemployed youth, sexual and gender minorities, the elderly, Indigenous Peoples, and ethnic and racial minorities. For example, many persons with disabilities have underlying health conditions that may make them particularly vulnerable to severe symptoms of COVID-19, if they contract it. Women and children are affected by increasing rates of domestic violence as a result of lockdowns. Many lesbian, gay, bisexual, transgender, and intersex people struggle more than ever to access health services and are overrepresented among those without access to social security. In some contexts, racially marginalized groups who have been traditionally excluded from the health system have had higher mortality rates than other groups and have experienced difficulty accessing information about the pandemic, access to equitable care, and access to vaccines.

Social inclusion is the right thing to do, and it also makes good economic sense. Left unaddressed, the exclusion of disadvantaged groups can be costly. At the individual level, the most commonly measured impacts include the loss of wages, lifetime earnings, 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 captured by foregone gross domestic product (GDP) and human capital wealth.

Exclusion, or the perception of exclusion, may cause certain groups to opt out of markets, services, and spaces, with costs to both individuals and the economyGlobally, the loss in human capital wealth due to gender inequality alone is estimated at $160.2 trillionAfro-descendants continue to experience significantly higher levels of poverty (2.5 times higher in Latin America). 90 percent of children with disabilities in developing countries do not attend school. In many countries, it is especially difficult to tackle LGBTI exclusion, discrimination, and violence. To date, 70 countries continue to criminalize homosexuality.

A 2018 World Bank paper estimates that Africa alone lost $ 2.5 trillion in human capital due to gender inequality and 11.4% of total wealth in 2014. Another study found that exclusion of the ethnic minority Roma cost Romania 887 million euros in lost productivity. Over time, exclusion can also lead to social tensions and even conflict, with significant long-term social and economic costs.

Social inclusion is vital to achieving the World Bank Group’s twin goals of ending extreme poverty and boosting shared prosperity. The World Bank’s Environmental and Social Framework (ESF), which applies to all investment project financing, emphasizes that social inclusion is critical for all of the World Bank’s development interventions and for achieving sustainable development.

Inclusion is also a priority in the global recovery from the COVID-19 pandemic. Stimulus packages for the COVID-19 recovery will need to be designed to counterbalance the widening social gaps and will have to guard against creating new forms of exclusion. The crisis is also an opportunity to focus on the rebuilding more inclusive systems that allow society as a whole to be more resilient to future shocks, whether health, climate, natural disasters, or social unrest.

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Washington, D.C.
Uwi Basaninyenzi