Why global leaders, academics support SA’s call to address wealth disparity
- Imraan Valodia
As more countries back the proposal at the 81st UN General Assembly, momentum for the landmark initiative, borne from South Africa’s G20 presidency, is growing.
When South Africa took over the presidency of the G20 last year, President Cyril Ramaphosa made a bold decision that will be looked back on as a turning point. He commissioned the first ever G20 report on global inequality.
Chaired by Nobel Laureate, Professor Joseph E. Stiglitz, the report asked two simple questions: what do we actually know about the current inequality crisis? And what are we going to do about it?
The report confirmed much of what we already know: the gap between the richest and poorest has grown too wide globally, extreme concentrations of wealth are finding themselves in the hands of a tiny elite and the most unequal countries are now seven times more likely to experience democratic erosion, explaining the political extremes affecting many nations worldwide.
But it also identified an important practical gap between science and policy which leaves policymakers without a shared consensus on the best practice and policies to reduce inequality levels down from their current heights. As it stands, studies and research on inequality is dispersed across disciplines and institutions. Evidence on which policies actually work is often inaccessible or insufficiently synthesised.
To tackle this, the proposal for an International Panel on Inequality, working in a similar way to the Intergovernmental Panel on Climate Change (IPCC), was born.
At a time when multilateralism must prove its ability to innovate, it is only right that South Africa, no stranger to extreme inequality in its various incarnations, should be the nation to advocate for an IPI’s establishment, and bring countries of all kinds behind it. Even today, with the spectre of Apartheid behind us, stark inequalities remain.
The richest one percent of South Africans now owns 55 percent of the country’s wealth, a six-percentage point increase since the end of Apartheid. The poorest half of the population continue to have negative net wealth. And black households hold just five percent of the wealth of white households. Despite important gains, the economic structures built over generations of colonialism and Apartheid remain largely intact.
For too long, the multilateral discussions around global inequality have taken place in the Global North, about the Global South. An IPI must be different, showing we can build coalitions of countries South and North, united by common purpose.
Last week in New York, on the sidelines of the UN General Assembly, momentum for the formal establishment of the panel took hold, with countries including G7 members, Germany and Japan backing the initiative. Many countries from every region including Bangladesh, Iceland and Cabo Verde participated at the high-level meeting.
They join the proposal’s founding governments of South Africa, Spain, Norway and Brazil whose leaders have been driving forward efforts to propose a panel, and work towards a UN resolution in support of it.
They also echo the sentiments of over 1500 academics and 37 former world leaders, including previous German Chancellor Olaf Scholz and former leaders of the African nations of Nigeria, Senegal, Mauritius, Malawi, Guinea, Mali and the Seychelles, who are urging governments worldwide to back the initiative with haste.
What these voices share is an evidence-based conviction that the inequality crisis is not inevitable but rather the result of policy choices that have allowed a small few to hoard more and more of the world’s wealth.
And with the right evidence base, political will and institutional architecture, they can be reversed.
UN Secretary General Antonio Guterres in his prepared remarks to the high-level meeting warned of a “ticking time bomb” as “unchecked inequality will further corrode democracy, as the ultra-wealthy and companies take control, wield outsized influence over the media and information landscape.”
The new frontier against inequality will include getting the backing of the UN General Assembly’s in 2027 for a new resolution on an International Panel on Inequality.
South Africa brought this idea into the world. Now we are asking the world to make it an International Panel on Inequality a reality.
Professor Imraan Valodia is Professor of Economics, Pro Vice-Chancellor: Climate, Sustainability and Inequality at Wits University and a member of the Extraordinary Committee of Independent Experts on Global Wealth Inequality.