By Amit Kapoor and Mukul Anand
Lessons from the G20 Global Inequality Report
Widening disparities in income and wealth both within and across countries have become one of the most pressing global challenges of our time. As inequalities deepen, the call for coordinated international action has only grown louder, highlighting the need for shared commitment and collective responsibility. Echoing this growing discourse is the G20 Global Inequality Report, prepared under the leadership of Nobel Laureate Professor Joseph E. Stiglitz. A key fact the report mentions is that the global wealth, which has more than doubled in the last two decades, reaching US$480 trillion in 2024, could have financed the eradication of world hunger, universal education for every child, and an accelerated shift away from fossil fuels had it been equitably distributed. However, from 2000 to 2024, the top 1% captured 41% of all new global wealth, while the bottom 50% received only 1%. This trend is not the inevitable outcome of globalisation or technology, as it’s often claimed. The report puts this myth to rest with a simple, yet powerful message: inequality is a policy choice, and it is therefore solvable. The need of the hour for governments is to adopt alternative policy approaches that yield more equitable and fair outcomes, which in turn requires political will.
Since the 1980s, many countries have adopted neoliberal policies, assuming that market forces with minimal regulation efficiently allocate resources, but this has only increased inequality. For example, the choice of tax policies, such as the value-added tax (VAT), has been regressive, as effective tax rates on corporations and the wealthiest individuals in most countries have fallen dramatically, disproportionately impacting poorer households. Further, with governments enacting policies that deregulated the labour market and restricted trade unions, the power of labour vis-à-vis capital has been reduced, leading to wage stagnation and a smaller share of income for workers.
The effects are stark: in constant 2024 dollars, the richest 1% have seen their wealth rise by an average of US$1.3 m per person, while the bottom 50% have seen their wealth rise by just US$585- a 2,655-fold difference. Moreover, growth in advanced economies has been lower under neoliberal regimes than in the post–World War II era. Instead, the world now faces deepening crises: 3.4 billion people live in countries spending more on debt service than on health or education.
Neoliberalism was adopted with the understanding that it would increase inequality, a trade-off justified by the promise of higher overall growth, but that has failed to materialise. Instead, the effect of neoliberal policies, driven by the spread of globalisation, has been to favour capital and market flexibility at the expense of social welfare. Debt payments in the Global South have risen from 28% to 45% of budget revenue between 2019 and 2025, and from 22% to 35% of government spending. Between 1970 and 2023, Global South governments paid US$3.3 trillion in interest to creditors in the North, while global IP rules cause US$1 trillion to flow annually from the South to the North in royalties and licensing, and illicit financial flows drain US$89 billion from Africa each year. It implies that capital is flowing from the Global North to the Global South. Additionally, unprecedented cuts in aid compound the crisis: the recent US cuts alone may lead to 14 million additional deaths by 2030, with the addition of escalating tariff policies that threaten export-oriented jobs and deepen poverty.
Although income inequality among individuals worldwide has decreased since 2000, mainly due to economic development in China, it remains very high, with a Gini coefficient of 0.61 (the World Bank’s definition of ‘high inequality’ is a Gini coefficient above 0.4). Moreover, 83% of the countries that make up 90% of the world’s population experience high income inequality. By 2025, 63% of countries home to 52% of the world’s population will slash public spending by a combined US$2.55 trillion over five years. Further, one in four people globally face moderate or severe food insecurity, i.e., regularly skipping meals, totalling 2.3 billion people, a number that has increased by 335 million since 2019. These structural inequalities are no accident; they result from globally imbalanced rules, shaped mainly by the North through institutions such as the IMF and the WTO. The necessary force to reverse the deliberate design of today’s inequality is not technical fixes, but political will. This will is the collective commitment by governments to acknowledge the legacy of past policy decisions, actively choose a different set of policies, and implement them to reverse the trend.
Towards this end, the report argues that policymakers lack sufficient, reliable information on inequality trends and the impacts of present policies. Therefore, there is a need for a technical, non-advocacy body that would support governments and multilateral agencies by providing authoritative assessments and analyses of inequality to inform policymaking. Inspired in part by the success of the Intergovernmental Panel on Climate Change (IPCC) and proposed to be called ‘International Panel on Inequality’ (IPI), the body could consist of a diverse, independent group of experts, supported by a secretariat centred on data and policy-relevant analysis rather than advocacy. The idea is to monitor existing research, assess data and knowledge gaps, and produce periodic, policy-relevant assessments of the drivers, measurement, and impacts of income and wealth inequality, and their relationships to other dimensions such as health and opportunity.
This work by the “Extraordinary Committee of Independent Experts on Global Inequality,” an important legacy of the South African Presidency of the G20, consolidates decades of research and invigorates global coordination to reduce inequality at both national and international levels. It combines rigorous academic and data-based evidence to argue that extreme inequality is a choice: the one which not only undermines the economic security of the majority but also weakens our collective capacity to address planetary challenges such as climate change, public health crises, and food insecurity. The report offers a note of optimism amid harsh realities and the troubling legacy of past decisions. It contends that with informed choices rooted in a deep understanding of the structures, drivers, and consequences of inequality, it is possible to reverse current trends and build a future in which prosperity is more broadly and fairly shared.
The article was published with The Statesman on December 21, 2025.
