Wealth inequality. A call for accelerating economic progress.
Wealth inequality is a pressing and widely debated issue. The rapid growth in wealth in emerging countries since 2000 is resulting in a narrowing gap in global wealth. Communities in emerging countries are calling for even faster economic and social progress to catch up with the wealthier countries.
Global wealth keeps growing. But wealth inequality is still high – both within and between countries. However, as noted in our latest Global Wealth Report, global wealth gaps have narrowed since the turn of the century: The share of wealth held by the bottom 90% of the population has risen by seven percentage points since 2000.
Economic progress narrows global wealth gaps
While China and other emerging markets grew at a fast pace in the early years of this century, they did so from a low base. As a result, their contribution to global wealth growth was quite modest until 2007. This changed around the time of the global financial crisis: Since 2008, emerging economies including China have accounted for two-thirds of the real wealth gain. The robust growth by low-wealth nations narrowed the gap in average wealth between countries.
Emerging societies await further economic changes
According to our recent Progress Barometer, emerging economies – particularly China and Brazil – are the strongest proponents of accelerating economic progress further. Both countries would welcome an expansion of free trade and foreign investment. Renowned economist Jagdish Bhagwati echoes this: "In the developing countries, there is widespread support for free trade as an engine of growth, and hence as a powerful instrument of poverty elimination."
It should not come as a surprise that those who are hungriest for progress are emerging societies, as they are the ones that are looking to catch up.