(Ottawa) A new report by the Canadian Centre for Policy Alternatives sheds some light on the pressing issue of inequality in the global economy. The report, The Global Divide, comes as officials gather in Washington this weekend to discuss topics such as global poverty at the semi-annual meetings of the International Monetary Fund and the World Bank.
"When countless politicians and business gurus are telling us that we live in a global village," said author Marc Lee, "then we have to look at how the income pie in that village is sliced, and it is not a pretty picture."
The report finds that inequality is both extremely large and has been growing, especially over the past two decades. In 1970, the top 20 percent of the world's people in the richest countries earned 32 times the income of the bottom 20 percent. This grew to 45 times in 1980, to 59 times in 1989, and to 74 times by 1997.
This, however, only captures the growth in inequality between countries, and a true picture of global inequality must also consider the growing gap within countries. The report draws on research done for the World Bank that finds that, while the top 10 percent of the world's people increased their share of world income to 51 percent in 1993, the poorest have been losing ground. In 1993, the bottom half of the world's population received a mere 8.5 percent of world income, down from 9.6 percent in 1988.
The report finds that IMF and World Bank policies of liberalization, privatization and deregulation have been significant contributors to the rise in global inequality. For many of the poorest countries, these policies have been forced on them by the IMF and World Bank in order to get access to loans.
"The good news is that the plight of the world's poor is being discussed at the highest levels," says Lee. "The bad news is that the cure emanating from these discussions too often resembles the disease."