The incomes of the richest sections of society are soaring in the UK, China and India, and in most other countries as well. The poorest groups are seeing slow improvements at best, and often decline. Recent estimates indicate that at the current rate it will take more than 800 years for the bottom billion of the world population to achieve 10% of global income.
The UN general assembly began its 66th session last week. Many of the heads of state attending will no doubt report on their country’s progress towards the millennium development goals. They’re also likely to discuss the targets that will succeed the MDGs after 2015. However, there will almost certainly be a looming gap in these presentations: the rising inequalities between and within countries.
A year ago, coinciding with the UN MDG summit, the Institute of Development Studies (IDS) and the MDG Achievement Fund released a report showing that the MDG targets largely overlooked inequality. Even in countries where there has been progress towards the MDGs, inequalities have grown. A Unicef study shows that only a third of the countries that have reduced national rates of child mortality have succeeded in reducing the gap between mortality rates in the richest and poorest households.
Inequality matters not just for those at the bottom. Highly unequal countries tend to grow more slowly, are more prone to conflict and have weaker civil societies. The much-cited study The Spirit Level found that across developed countries, crime, disease and environmental problems were exacerbated by inequality. Such ill effects in society made everyone worse off, even the middle classes.
What can be done? Recently, key officials from UN agencies, development NGOs, research institutions and the UK, Brazilian and Indian governments met in London to explore an agenda for tackling inequality. The consultation was convened by the IDS and the Achievement Fund.
The meeting examined successful inequality reduction policies, sharing the lessons of a handful of countries that have defied the global trend. Thirteen countries in Latin America, including Brazil, Argentina and Chile, have narrowed the gap between the incomes of the poorest and wealthiest groups over the last decade. Similar positive trends have been seen in Malaysia, Thailand and in several African nations.
How was progress possible in these countries? Inequalities fell when governments expanded social protection programmes like Brazil’s Bolsa Familia. Minimum wage legislation and policies allowing more people to access secondary and higher education also contributed to success. Successful countries used progressive taxation or channelled mining and oil revenues to fund inequality-reducing programmes.
Today, some UN agencies are also beginning to prioritise inequality. Under executive director Tony Lake, Unicef has made ‘equity’ its top priority. UNDP has also made it a major concern. Some British NGOs are also targeting inequality. The London meeting concluded by setting out priorities for action. First, equity needs to be mainstreamed in the development agenda, based around making growth inclusive. This draws on evidence that reducing inequalities is likely to strengthen economic growth. Second, NGOs, UN agencies and the media should highlight success stories where countries have reduced inequality. The strategies used in these cases can be a focus of discussion – how can they be applied and adapted elsewhere?
More attention is needed to monitor inequalities. We need better tools to measure where these have been reduced, where they are growing and why. UN agencies can lead by developing collection of better indicators. These must incorporate a range of measures of inequality, not just income.
An agenda centred on women and children has wide political appeal, and can move past entrenched ideological battles. Focusing on human rights is another basis for mobilising political support.
Last week, the general assembly chief, Joseph Deiss, said progress on poverty reduction over the last year had been satisfactory. It is doubtful that progress on inequality in most countries could be similarly assessed. Indeed, worrying economic prospects across the developed world and challenges to redistributional tax policy in the UK suggest concerted action is necessary to sustain and expand the progress that has been made on tackling inequality.
• Sir Richard Jolly is a research associate and former director of the Institute of Development Studies. He previously served as an assistant secretary general of the United Nations, and was a senior official in UNDP and Unicef