Nobel economist Joseph Stiglitz warns inequality emergency threatens democracy, urging G20 to create international panel on wealth disparity
JOHANNESBURG: Wealth inequality represents a global emergency that threatens democracy and social cohesion worldwide according to expert warnings issued on Tuesday.
A committee led by Nobel Prize-winning economist Joseph Stiglitz urged G20 leaders meeting in South Africa this month to establish an expert panel specifically designed to tackle this escalating crisis.
The “inequality emergency” currently leaves billions of people hungry and could worsen significantly under the United States’ “law of the jungle” approach to trade under President Donald Trump.
The proposed international panel on inequality draws direct inspiration from the UN’s Intergovernmental Panel on Climate Change that analyses global warming risks and proposes solutions.
One in four people worldwide now regularly skip meals while billionaire wealth has reached the highest level in recorded history according to the report commissioned for the Johannesburg G20 summit.
Between 2000 and 2024, the wealthiest one percent of the global population captured 41 percent of all new wealth while the poorest 50 percent received just one percent.
Although income inequality between individuals declined in recent decades due largely to China’s economic development, inherited wealth has increased dramatically with 70 trillion dollars expected to pass to heirs within ten years.
“The world understands that we have a climate emergency; it’s time we recognise that we face an inequality emergency too,” Stiglitz stated.
“It isn’t just unfair and undermining societal cohesion — it’s a problem for our economy and our politics too,” he emphasized.
The report specifically warned that current US policies including widespread tariff impositions on trading partners risk substantially increasing global inequality.
“This new world, in which the powerful break rules with impunity and we move away from a rules-based international order towards a ‘law of the jungle’, could entrench unequal exchange, investment and technology patterns,” it stated.
Commissioned by South African President Cyril Ramaphosa whose country ranks among the world’s most unequal nations, the report directly linked economic inequality with democratic erosion and rising authoritarianism.
“Inequality erodes trust in institutions, fuels political polarisation, can reduce participation among poorer citizens and residents, and creates social tensions of different kinds,” the report explained.
More than 80 percent of countries experience “high inequality” by World Bank definitions and these nations become seven times more likely to experience democratic decline.
The six-person committee proposed that the International Panel on Inequality would comprehensively analyse all inequality aspects from land ownership to tax avoidance to inform global policymaking.
Recommended measures to address the crisis include fair taxation of multinational corporations and extreme wealth, breaking up monopolies, price stabilization and restructuring debt for highly indebted countries.
South Africa currently holds the G20 presidency as the first African nation to lead the grouping of 19 countries plus the African Union and European Union.
Together these G20 members represent 85 percent of global GDP, 75 percent of international trade and two-thirds of the world’s total population.
President Trump has already indicated he will not attend the November 22-23 summit in Johannesburg.
Stiglitz told reporters he doesn’t expect Washington as the next G20 president to support the equality panel proposal but “hopefully a majority of countries would eventually join in”.
Ramaphosa described the report as “a blueprint for greater equality” that South Africa wants to place on the international agenda through its G20 leadership.
“Addressing inequality is our inescapable generational challenge. This report lays out prudent and pragmatic steps we can take to reduce it,” he stated. – AFP
