Income inequality is increasing in the world. Nearly half of the world’s population lives on less than $2.50 a day. Over 1.3 billion live in extreme poverty — less than $1.25 a day while the combined wealth of the world’s top ten billionaires is greater than the total GDP of the 85 poorest countries on Earth. The world’s three richest people have a combined net worth of $858 billion.
Global spending on defence rose by four per cent in 2019, the largest growth in 10 years. The increase alone in US spending from 2018 to 2019, $53.4 billion, was almost as big as Britain’s entire defence budget. The International Institute for Strategic Studies (IISS) said the rise was fuelled by growing rivalries between big powers, new military technologies and rumbling conflicts from Ukraine to Libya. Beijing’s military modernisation programme, which includes developing new hard-to-detect hypersonic missiles, is alarming Washington and helping drive US defence spending. Its annual “Military Balance” report said both the US and China had increased spending by 6.6pc, to $684.6 billion and $181.1 billion respectively. Europe — driven by ongoing concerns about Russia — stepped up by 4.2pc, but this only brought the continent’s defence spending back to 2008 levels, before the global financial crisis saw budgets slashed. Elsewhere, spending in Asia is booming — growing more than 50pc in a decade, rising from $275 billion in 2010 to $423b in 2019 in real terms as the continent’s economic success has allowed countries to invest more in their militaries.
On the other hand, more than 3 billion people live on less than $2.50 a day while over 1.3 billion live in extreme poverty. Over 80pc of the world population lives on less than $10 a day. One billion children worldwide live in poverty. According to UNICEF, 22,000 children die each day due to poverty. Over 805 million people worldwide do not have enough food to eat. More than 750 million people lack adequate access to clean drinking water. Diarrhea caused by inadequate drinking water, sanitation, and hand hygiene kills an estimated 842,000 people every year globally, or approximately 2,300 people per day. In 2011, 165 million children under the age 5 were stunted (reduced rate of growth and development) due to chronic malnutrition. Oxfam estimates that it would take $60 billion annually to end extreme global poverty–that’s less than 1/4 the income of the top 100 richest billionaires.
According to a report, the combined wealth of the world’s top ten billionaires is greater than the total GDP of the 85 poorest countries on Earth. The world’s richest individuals including Jeff Bezos, Bill Gates and Mark Zuckerberg have a combined net worth of $858 billion. Meanwhile, the 85 smallest economies in the world have a combined GDP of just $814 billion, far behind a small handful of rich businessmen. Their cumulative wealth is even higher than the GDP of developed countries such as Sweden and Belgium and the oil-exporting powerhouse of Saudi Arabia. If converted to GDP, the top ten billionaires’ combined $858 billion wealth would make them the 18th richest country in the world. The elite club would be wealthier than large regional powers such as Saudi Arabia, Turkey and Iran and Western nations including Austria, Sweden and Belgium.
On the other hand, the number of people unemployed around the world stands at some 188 million. In addition, 165 million people don’t have enough paid work, and 120 million have either given up actively searching for work or otherwise lack access to the labour market. “For millions of ordinary people, it’s increasingly diﬃcult to build better lives through work,” said ILO Director-General Guy Ryder.
A UN report on the economy showed that developed countries are experiencing slow growth, and some African countries are stagnating. The consequence is that not enough new jobs are being created to absorb the growing labour force as it enters the market. In addition, many African countries are experiencing a drop in real incomes and a rise in poverty. Eradicating poverty is an important element of the UN’s 2030 Agenda for Sustainable Development but, according to the ILO study, moderate or extreme working poverty – deﬁned as earning less than the equivalent of $3.20 per day – is expected to edge up in developing countries.
The World Social Report 2020, published by the UN Department of Economic and Social Affairs, shows that income inequality has increased in most developed countries, and some middle-income countries – including China, which has the world’s fastest growing economy. The challenges are underscored by UN chief António Guterres in the foreword, in which he states that the world is confronting “the harsh realities of a deeply unequal global landscape”, in which economic woes, inequalities and job insecurity have led to mass protests in both developed and developing countries. The study shows that the richest one per cent of the population are the big winners in the changing global economy, increasing their share of income between 1990 and 2015, while at the other end of the scale, the bottom 40pc earned less than a quarter of income in all countries surveyed.
One of the consequences of inequality within societies, notes the report, is slower economic growth. In unequal societies, with wide disparities in areas such as health care and education, people are more likely to remain trapped in poverty, across several generations. Between countries, the difference in average incomes is reducing, with China and other Asian nations driving growth in the global economy. Nevertheless, there are still stark differences between the richest and poorest countries and regions: the average income in North America, for example, is 16 times higher than that of people in Sub-Saharan Africa.
As the UN’s 2020 report on the global economy showed, the climate crisis is negatively impacting the quality of life, and vulnerable populations are bearing the brunt of environmental degradation and extreme weather events. Climate change, according to the World Social Report, is making the world’s poorest countries even poorer, and could reverse progress made in reducing inequality among countries. The UN’s 2030 Agenda for Sustainable Development, which provides the blueprint for a better future for people and the planet, recognizes that major challenges require internationally coordinated solutions, and contains concrete and specific targets to reduce inequality, based on income.
Income disparities and a lack of opportunities are creating a vicious cycle of inequality, frustration and discontent among people across the globe. Governments and international organisations have a role to play in levelling the playing field and creating a fairer world for all. They will have to find a solution to sharpening inequalities, otherwise disgruntlement and conflict will rise and affect all of them.`