• G20 committee demands coordinated response to inequality

Sopuruchi Onwuka

Descendants of millionaires will inherit over $70 trillion from wealth dynasties in the next 10 years when nearly half of global population is also predicted to increasingly slip into severe food insecurity as the gulf between the rich and poor continues to widen and middle class progressively fade out.

The gloomy picture of income and wealth inequality is part of the key findings contained in the report published by G20 Extraordinary Committee of Independent Experts on Global Inequality. The report which was embargoed until this week was written by Nobel Prize economist, Joseph E. Stiglitz, and five other experts.

President Cyril Ramaphosa of South Africa who constituted the G20 Extraordinary Committee for the South African G20 Presidency in 2025, also commissioned it to publish the report on closing global income and wealth inequalities.

The committee reported that income inequality between all individuals in the world has remains very high, “at a Gini coefficient of 0.61” despite downward pressure due largely to economic development in China.

In noting that wealth inequality is far higher than income inequality, the committee stated that “between 2000 and 2024, the richest 1% captured 41% of all new wealth, in contrast to just 1% being captured by the bottom half of humanity.” It added that “the richest 1% have seen their average wealth increase by US$1.3m since 2000, while someone in the poorest half of humanity saw their wealth increase by an average of US$585 over the same period (in constant 2024 USD).”

According to the report, a quarter of the global population or 2.3 billion people face moderate or severe food insecurity, having to regularly skip meals, which is up by 335 million since 2019.

The experts presented key facts on income and wealth inequality, noting that the assessment of inequality may require multiple metrics. They pointed out that the use of income and wealth shares in the past 14 years, for example bottom 50%, middle 40%, top 10% or top 1%, -has also become more common, as has the related concept of the Palma ratio15,16 and the Pareto coefficient for inequalities at the top.

“While the extremes of the distribution – poverty at the bottom and unbounded wealth at the top – have drawn the most attention, there is also evidence of a weakening of the middle classes,” they noted.

Key findings of the report showed that 83% of countries have high income inequality, accounting for 90% of the world’s population; while income inequality between every individual in the world remains very high, with a Gini coefficient of 0.61.

The report also showed that whereas the bottom 50% of the world’s population has seen their average real income increase by US$358 over the last 40 years, the income of the richest 1% has increased by US$191,000 (in constant 2024 US$) over the same period.

In presenting the scale of wealth inequality, the experts stated that the situation is far worse than income inequality.

“Between 2000 and 2024, the richest 1% captured 41% of all new wealth, in contrast to just 1% being captured by the bottom 50%. This means that the richest 1% have seen their average wealth increase by US$1.3m since 2000, while someone in the poorest half of humanity saw their wealth increase by an average of US$585 over the same period (in constant 2024 US$). The top 1% increased their average wealth 2,655 times as much as the bottom 50%,” according to the report.

Stiglitz et al noted that the wealth of over 3000 billionaires in the world is now the equivalent of 16% of global GDP, adding that the world’s first trillionaire is expected within a decade.

In also presenting some dimensions of inequality, the economists stated that countries with high inequality are seven times more likely to experience democratic decline than more equal countries. They added that global poverty reduction has slowed almost to a halt and reversed in some regions since 2020.

The consequence of the emerging scenarios, according to the report, is that some 2.3 billion people face moderate or severe food insecurity, up by 335 million since 2019; while half the world’s population is still not covered by essential health services, with 1.3 billion people impoverished by out-of-pocket health spending.

In relating the gloom to real life situation, the economists pointed out that a woman in Kenya is 37 times more likely to die in pregnancy or childbirth than a woman in Sweden.

In disconnecting the income and wealth gaps from efforts, the authors noted that “more billionaires have acquired their wealth through inheritance than through entrepreneurship,” adding that some 1,000 billionaires will transfer more than US$5.2tn to their heirs in the next 30 years, largely untaxed, perpetuating intergenerational inequality.

“Overall, it is estimated that over $70 trillion will be passed down to heirs over the next decade, undermining social mobility and equality of opportunity,” the experts wrote in the report.

The economists however challenged governments of G20 countries to take action, stating that “inequality is a policy choice. The negative trends can be reversed.”

The committee proposed that G20 raises an International Panel on Inequality (IPI) to track trends on inequality and assess the forces contributing to those trends.

Members of the committee called on the global community to muster political will and evolve a very different set of feasible policy choices that promote economic resilience, inclusive development, and social justice. They also challenged the G20 with facilitating global coordination of efforts to reduce inequalities.

“Addressing inequality in all its dimensions in the most efficient and effective way requires greater fundamental knowledge of inequality than we currently have. The key proposal of this report, the creation of an International Panel on Inequality, would enhance our understanding of inequality in all its dimensions, assessing magnitudes and trends, its drivers and consequences, and the impacts of ongoing structural changes and policies.

“It would be a permanent legacy of the South African Presidency of the G20, in helping the world address one of the major scourges of our time – moving the world towards our ideal of a globally shared common prosperity,” they proposed.