The richest 1% on the planet captured 41% of all the new wealth generated between 2000 and 2024, while only 1% went to the poorest 50%, a report on global inequality directed by Nobel Prize winner Joseph Stiglitz warned on Tuesday.
The study, prepared on behalf of the South African presidency of the G20 (group of developed and emerging countries), warns that, in the last twenty-four years, the average wealth of the richest 1% increased by 1.3 million dollars, compared to 585 dollars for the poorest 50%.
Stiglitz heads the Extraordinary Committee of Independent Experts on Global Inequality, created by the South African president, Cyril Ramaphosa, which in this report analyzes the causes and effects of inequality in a context of growing concentration of income and wealth at the highest levels, in the face of the difficulties of large sectors of the population to survive or make ends meet.
The committee proposes creating an International Panel on Inequality, inspired by the Intergovernmental Panel on Climate Change (IPCC), in order to guide public policies on equality at a global and national level.
The panel, conceived as a technical body focused on data and analysis, could count on the voluntary support of promoting countries – not necessarily members of the G20 -, with multilateral agencies as main stakeholders.
«We already understand that we face a climate emergency; The time has come to recognize that we are also experiencing an inequality emergency. “This is not only an injustice that undermines social cohesion, but also an economic and political problem,” said Stiglitz.
“Some of the worst effects of inequality fall on democracy,” added the economist.
Inequality, a threat to democracy
Along these lines, the report warns of a weakening of middle-income groups in many regions of the world, reflected in greater economic insecurity and the precariousness of material living conditions, which can have significant consequences for economic and political stability.
Furthermore, the document highlights that recent phenomena such as the Covid-19 pandemic, the war in Ukraine and new trade disputes have created a “perfect storm” that worsens poverty and inequality: one in four people in the world regularly skips meals, while the wealth of billionaires reaches historic highs.
According to the report, 83% of countries – home to 90% of the world’s population – meet the World Bank’s definition of “high inequality”, and these are seven times more likely to suffer democratic setbacks than the most egalitarian ones.
Although inequality between individuals has decreased in recent decades, thanks mainly to the increase in per capita income in highly populated nations such as China, the prospects for future reduction are uncertain and the gap between the global north and south remains very high.
The study also warns of the increase in inherited wealth: it is expected that 70 trillion dollars will be transferred to heirs in the next ten years, which poses a challenge for social mobility and equal opportunities.
Regarding measures to alleviate inequality, the report proposes action on three fronts.
At the international level, it advocates reforming economic and trade regulations, as well as redesigning intellectual property rules, in addition to guaranteeing “fair” taxation of multinationals and the so-called “ultra-rich.”
At the national level, it recommends strengthening labor protection, reducing business concentration, taxing large capital gains, investing in public services and applying more progressive tax policies.
Likewise, and given the current geopolitical “volatility”, it calls for promoting new models of international cooperation that promote collaborations in fiscal, commercial and green transition matters. EFE
