U.N. sounds alarm on worsening global income disparities
By Louis Charbonneau
UNITED NATIONS (Reuters) - The U.N. Development Program warned in a report on Wednesday that income disparities in countries around the world have been worsening, posing new risks for global economic and political stability.
The UNDP warning echoes remarks from U.S. President Barack Obama in his annual State of the Union address on Tuesday, in which he said there was a widening gap between rich and poor in the world's biggest economy and that while the stock market has soared, average U.S. wages have barely budged.
The UNDP report said income inequality increased by 11 percent in developing countries over the two decades between 1990 and 2010. The majority of households in developing countries — more than 75 percent of those nations' populations — are living today in societies where income is more unequally distributed than it was in the 1990s, the report said.
The UNDP says this is a global trend that, if left unchecked, could have dire consequences since it "can undermine the very foundations of development and social and domestic peace."
The widening income gap comes as some major developing countries - such as China and India - have seen strong economic growth and an overall increase in national wealth. But that wealth has not been evenly distributed, which has contributed to greater inequality in those societies.
"The sharpest increases in income inequality have occurred in those developing countries that were especially successful in pursuing vigorous growth and managed, as a result, to graduate into higher income brackets," the UNDP report said.
"Economic progress in these countries has not alleviated disparities, but rather exacerbated them," it said.
In an interview with Reuters, UNDP chief Helen Clark made clear that this negative trend is reversible and that one of the key components is creating quality employment opportunities. Continued...