For any country, one of the most important objectives of policymakers is to ensure that economic opportunities are spread out evenly among citizens or nationals of that country and the territories they oversee. This is important since economic participation and inclusion is considered to be human right. Now with SDG 10 on reduced inequalities, it’s becoming more critical for countries to ensure that their nationals, regardless of their region, are included in the economic activities of the country and are accorded equal opportunities as any other persons. However, for overseas territories of some nations, this is not usually the case.
Overseas territories vs Mainland
Overseas territories are dependent areas that are governed by a sovereign state but are not part of the mainland of that state. According to the United Nations, a non-self-governing state is one that has not yet attained a full measure of self-government. Today, according to the UN, there exists 17 non-self-governing territories. The member states of the UN that are responsible for the administration of such territories are called administering powers. Overseas territories enjoy some sort of autonomy as they may have their own local government but do not enjoy full political freedom as the sovereign state. For example, for British overseas territories, each territory has its own constitution and local laws.
Most overseas territories of countries are former colonies of sovereign countries. They may be self-governing but have not yet attained full independence. This is because most overseas territories still depend on sovereign states in areas of defense and foreign policy. Even so, overseas territories depend on the mainland to varying degrees depending on their economic capabilities and their location.
What exactly is economic Inequality?
According to the World of labor, economic inequality is considered to be the uneven distribution of resources and opportunities between different groups in society. This more often than not affects the abilities of individuals to respond effectively to crises and even experience social and economic mobility in their lifetime. The Covid-19 pandemic, climate-related disasters, and other overlapping crises have exacerbated economic inequality which is evident between non-self-governing territories and the sovereign states that administer them.
While understanding what economic inequality entails, the income, pay, wealth, and opportunities accorded to individuals in a particular area are examined. The Equality Trust recognizes that there is a difference between pay and income. Income constitutes money that is not only received from employment but also from other sources eg. dividends from stock individuals hold. In addition, wealth inequality arises when there is a big difference in the value of assets held by households. All these components are directly related to the economic outcomes of a country or territory since they affect the level of productivity, employment, and subsequently output.
Case Study: The UK vs British overseas territories
There are fourteen overseas territories that are linked to the United Kingdom. These territories are also called United Kingdom overseas territories. They form part of the former United Kingdom empire and are considered by the United Nations to be non-self-governing states. These territories are responsible for their own internal governance but the UK is still responsible for defense and foreign affairs. Most of the people in the overseas territories are British nationals; therefore, their safety is a top priority for the British government. Here is a list that enumerates all the UK overseas territories.
Most of the UK’s non-sovereign states have relatively smaller populations than most independent countries. Growth then becomes difficult for the overseas territories given their small markets and labor force. Their economic growth and advancement are therefore pegged on the ability to export more, therefore, increasing earnings that would be useful in financing imports for domestic use.
France and its territories
There are thirteen territories that are French administered outside Europe. Just like the UK overseas territories, most of the French overseas territories are part of the former French colonial empire. France has overseas territories in Western Europe, the Caribbean, the North and southern Americas, and the Indian, Pacific, and antarctic oceans. The presence of these territories in all these areas of the world is essentially important for France since they make it the second largest exclusive economic zone after the United States.
Compared to the mainland, French overseas territories grapple with higher levels of unemployment. According to Insee statistics, in the last quarter of 2021, unemployment levels in French overseas departments were higher ( 10.9% to almost 19%) than nationwide unemployment which was 7.4%. This shows a clear gap in the level of payroll employment opportunities between the mainland and overseas territories. The level of unemployment then affects the ability of the territories to increase economic productivity and drive positive output.
The USA and its territories
The United States has five permanently inhabited territories; American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the US Virgin Islands. Even though most of the people living in US overseas territories are considered to be US nationals, they do not enjoy the same social and economic rights and privileges as those who live in states. They enjoy some basic and fundamental rights such as freedom of speech and equal protection but are not allowed to take part in presidential elections or have enough representation in congress they are allowed to participate in committees but can’t vote on any actual bill.
To add, US overseas territories are usually the last to get government relief and also get the least funding from government programs. For instance, in 2017, Hurricane Maria hit Puerto Rico killing thousands of people and causing nearly $100 billion in damage. The local and federal governments were slow to respond and it was only in 2020 that the Trump administration allocated $13 billion for rebuilding Puerto Rico. In addition, the US territories receive less Medicaid funding as compared to the other states. Funding is subjected to a statutory and fixed matching rate cap, unlike other states whose budget is adjusted annually based on the state’s per capita income. Once a territory has exhausted its allocation, it does not receive more financial resources for the Medicaid program in that financial year.
Overseas territories of any country give it more global power and a better political position. All countries must treat their overseas territories with the same attention as they accord the mainland with no exception for the good of the country and its citizens living in the overseas territories. More focus ought to be placed on helping overseas territories build their capacity and be able to respond to crises easily. In addition, good governance and sustainable development should be a priority since they have a ripple effect on the entire economy.
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