Widespread inequality throughout the world

World Inequality Report 2018 is an up-to-date account of global trends in inequality. The report is researched, compiled, and written by a team of the world’s leading economists of inequality. Among nations, inequality has been decreasing as traditionally poor countries’ economies have caught up with the West.
Inequality has increased anywhere in the world. The richest 1 percent is twice as wealthy as the poorest 50 percent. British economist John Maynard Keynes published The General Theory of Employment, Interest and Money in 1936 explaining that capitalism was not only unable to guarantee sufficiently low rates of unemployment, but had also caused “an unequal distribution of arbitrary wealth”. Economist Lucas Chancel, the main coordinator of the report, said that “on a global level, the top 1 percent has pocketed twice as much of the economic growth as half of the bottom 50 percent”. The researchers working on the project have explained that “economic inequality is widespread and to some extent inevitable.
Inequalities in Europe are less prominent than in the US. The World Inequality Report shows that the disparity in wealth distribution varies significantly from one region to another. In Europe, 37 percent of the national revenue is pocketed by the top 10 percent, 41 percent in China, 46 per cent in Russia, 47 percent in North America and around 55 percent in sub-Saharan Africa, Brazil and India. The highest value can be found in the Middle East, with 61 percent. Africa hosts 17 percent of the global population, but this figure is expected to hit 26 percent in 2050. Between 1993 and 2013, in Italy, the poorest 90 per cent of the population lost 15 percent of their wealth (from 60 to 45 per cent). The wealth of the richest in China and Russia has skyrocketed in the last few decades. In China and Russia, the amount of wealth held by the top percentage of the population has gone from 15 to 30 percent in China and from 22 to 43 percent in Russia.
Income inequality in India has risen over the last three decades and a half with the top 10 percent of earners cornering 55 percent of the national income in 2016.The level of income inequality in India in 2016 matched that in sub-Saharan Africa and Brazil, where top earners accounted for a high share of income, according to the World Inequality Report 2018 published on 14 December 2017 by World Wealth & Income Database, which tracks information on income distribution. Rise in income inequality has been more gradual in India since 1980 compared to Russia, where it has been abrupt and compared to China, where it was moderate, said the report. India has been trying to tackle income inequality with a combination of direct transfer of entitlements to the intended beneficiaries, drive against tax evasion and schemes meant to improve access to energy and finance by the poor.
The report found Europe as the best performing region, where the top earners’ group accounted for 37 percent of national income in 2016, followed by 41 percent in China, 46 percent in Russia and 47 percent in US-Canada. The report called West Asia the frontier of income inequality as this group accounted for 61 percent of national income.
The per capita income of Pakistan is $1,629. Poor families can bear the cost of food, health, shelter, education and other fundamental needs for a year in the country. Bangladesh a young country has seen an increase of up to $1,602 in its per capita income. Oxfam’s another report titled Commitment to Reducing Inequality (CRI) ranks Pakistan at number 139 out of 152 countries. In spending on education, health and social protection, it is ranked on 146; progressive taxation is ranked at number 98 and labour rights is ranked at number 118. According to development experts of Pakistan, between 1998-99 and 2013-14 consumption-based poverty fell from 57.9 per cent to 29.5 per cent. Multidimensional poverty that comprises education, health and living standards dropped from 55.2 per cent to 38.8 per cent between 2004-5 and 2014-15. Besides, the richest 20 per cent in Pakistan spend seven times more than the poorest 20 percent. 35 per cent of the people live below the poverty line, around 22.4 million children are out of school and 45 per cent are stunted. Income and wealth inequality in Pakistan is from top to bottom. Only 22 persons in the country have billions of wealth and reserves. The rest spend their life in hunger and poverty. Education and health infrastructures are on the verge of collapse. Institutions are rotten. Moral and ethical values are decaying.
Some African countries through spending on education, health and social protection have controlled inequality. The government needs to increase spending on education, health and social protection, and provide equal labour wages for both men and women. The government should revamp and reform the taxation system to bring progressive and just tax systems.
While talking of inequality, renowned Economist Dr. Kaiser Bengali said, “For export of every USD 100, we import goods worth USD 215. And the poor pays the difference. The richest 10 percent of Pakistanis pay 12 percent of their income in taxes while the poorest 10 percent end up giving 16 percent in taxes. We see economic growth in stats released by the state institutions. What we don’t see is that growth is not creating jobs. Financial sector’s boom didn’t result in creating new jobs. Our growth model just manifests increase in elite’s consumption patterns.”. “Pakistan is today the 44th largest economy (GDP) and despite vast natural resources and promising conditions, the country’s human and economic potential remains largely underdeveloped,” the report added.

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