Introduction

Social inequality and poverty increasing worldwide
World Socialist Web Site

"Global inequalities in income and living standards have reached grotesque proportions," according to the latest annual United Nations Human Development Report (UNHDR).

While 1.3 billion people struggle to live on less than $US1 a day, the world's richest 200 people doubled their net worth between 1994 and 1998 to more than $1 trillion. The world's top three billionaires alone possess more assets than the combined Gross National Product of all the least developed countries and their combined population of 600 million people.

Far from narrowing, the gulf between rich and poor is growing. "Some have predicted convergence. Yet the past decade has shown increasing concentration of income, resources and wealth among people, corporations and countries," the report states.

The income gap between the fifth of the world's population in the wealthiest countries and the poorest fifth of the world's population was 74 to one in 1997, up from 60 to one in 1990, and 30 to one in 1960. Those living in the highest income countries have 86 percent of world Gross Domestic Product (GDP), 82 percent of world export markets, 68 percent of foreign direct investment and 74 percent of world telephone lines. Those living in the poorest countries share only one percent of any of these.

OECD countries, with 19 percent of global population, control 71 percent of global trade in goods and services, and consume 16 times more than the poorest fifth of the globe.

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World inequality rises
(BBC)

The world is becoming a more unequal place, with a growing gap between rich and poor households.

According to the economist Branko Milanovic, global inequality has risen fast - increasing by around 5% between 1988 and 1993, the same rate that inequality widened in Britain during the Thatcher years.

The gap is so big that the richest 1% of people (50 million households), who have an average income of $24,000 (£16,000), earn more than the 60% of households (2.7 billion people) at the bottom of the income distribution.

Gains go to the rich

The study is the first to compare household income across countries, using a series of surveys that cover 84% of the world's population and 93% of world income.

Previous research has only been able to compare the average income of one country against another.

But this study showed that the gap between rich and poor is much greater than previously understood.

Nevertheless, the biggest source of inequality is the difference between the income of people in the five major economies (USA, Japan, Germany, France and Britain) and the poor in rural India, China and Africa.

The study points to the growing gap between urban and rural areas in China as another major source of inequality.

In the five years of the study, world per capita real income increased by 5.7%.

But all the gains went to the top 20% of the income distribution, whose income was up 12%, while the income of the bottom 5% actually declined by 25%.

Two regions in which the poor got much poorer were Eastern Europe and the former Soviet Union - where the income distribution worsened dramatically after the collapse of the communist regime - and sub-Saharan Africa, where wars, famine and disease led to falls in economic output.

Causes and consequences

The study raises the concern about the lack of a "middle class" at the world level, with most people concentrated at the bottom or at the top of the income scale.

The huge gap between rich and poor - with 84% of the world receiving only 16% of its income - has become more worrying since the world has faced the threat of organised terror from groups based in some of the world's poorest countries.

And the spread of global communications may make the income gap - with the richest 10% receiving 114 times the income of the poorest 10% - more difficult to maintain.