The G20 Extraordinary Committee of Independent Experts on Global Inequality has released a landmark report that paints a stark picture of widening inequality across the world. Commissioned by the South African G20 Presidency and led by Nobel laureate Joseph Stiglitz, the report warns that the concentration of wealth and political power among a small elite is destabilising economies, weakening democracies and deepening social fractures.
A world of extremes
According to the report, 83 percent of countries now have high income inequality, defined as a Gini coefficient above 0.4. These countries represent 90 percent of the world’s population. Only a small fraction of humanity lives in countries with low inequality.
Even though global income inequality between countries has narrowed slightly since 2000 due largely to China’s rise, income disparities within countries have surged. The top 1 percent have increased their income share in nearly half the world’s economies, reaching 68 percent of the global population. Meanwhile, the bottom 50 percent saw their real incomes rise by only 358 US dollars in 40 years, compared to 191,000 US dollars for the top 1 percent.
The wealth gap is even worse
Wealth inequality is described as “far higher” than income inequality and rising faster. The report finds that since 2000, the richest 1 percent captured 41 percent of all new wealth, while the poorest half of humanity captured 1 percent. On average, the richest 1 percent grew their wealth by 1.3 million US dollars, while an individual in the bottom 50 percent gained 585 US dollars.
The global billionaire class has expanded rapidly. There are now more than 3,000 billionaires, whose combined wealth is equal to 16 percent of global GDP. The world is expected to see its first trillionaire within a decade.
Public wealth is shrinking as private wealth explodes
Despite the world becoming wealthier overall, governments have seen declining levels of public wealth. Fig 1.4 in the report illustrates a steep rise in private wealth contrasted with stagnating or falling public assets. Many states, including those in advanced economies, now hold significant net debt, limiting their ability to invest in public goods.
The Committee attributes much of the explosion in private wealth to government interventions during crises. Central bank actions after the 2008 financial crisis and during the COVID-19 pandemic pumped trillions into financial markets, pushing up asset prices and enriching asset owners. This “explains why fortunes at the top expanded sharply without corresponding increases in productive capital”.
Inequality undermines democracy
The report draws a direct connection between extreme inequality and democratic erosion. Countries with high inequality are seven times more likely to experience democratic decline.
The Committee notes that concentration of wealth often leads to:
• increased political influence by the ultra-rich
• manipulation of elections
• weakened checks and balances
• media capture
• shrinking civic spaces
These factors allow elites to shape laws and policies that protect their interests at the expense of broader society.
Inequality slows economic growth
Contrary to past beliefs, the report argues that reducing inequality improves economic performance, social stability and long-term productivity. It highlights several channels through which inequality harms economies:
• reduced aggregate demand
• poor education and health outcomes
• limited social mobility
• higher indebtedness
• vulnerability to shocks
• increased political instability
The report concludes that the belief in a trade-off between equity and growth is outdated. Instead, inequality undermines both economic efficiency and development prospects.
Global rules have deepened inequality
The report argues that international economic rules are a major driver of inequality. These include:
• intellectual property regimes that restrict access to medicines and green technologies
• unregulated capital flows that increase volatility and debt crises
• tax rules that allow multinational corporations and the ultra-rich to avoid taxation
• trade rules that prevent developing countries from industrialising
• investor-state dispute settlement mechanisms that undermine public regulation
These systems have created “large net transfers from developing countries to richer ones,” worsening historic divides.
Food insecurity is rising as billionaire wealth surges
One of the most striking charts in the report shows a sharp divergence since 2019. Billionaire wealth soared, while global food insecurity rose by 335 million people, reaching 2.3 billion.
The Committee notes that inequality is now heavily intertwined with climate change, health risks and food crises.
A call for a new global body on inequality
The report’s most important proposal is the creation of a new International Panel on Inequality (IPI), modelled after the IPCC. The panel would provide:
• authoritative assessments of inequality
• global tracking of wealth and income trends
• guidance on policy design
• deeper analysis of intersecting inequalities
• improved data governance and measurement
The IPI would be a legacy of the South African Presidency of the G20.
Policy proposals for countries
The report outlines a suite of policy options, including:
• rewriting global IP rules
• strengthening antitrust measures
• expanding public services and social protection
• implementing stronger inheritance taxes
• raising progressivity of income and wealth taxes
• nationally reorganising labour markets to strengthen workers’ bargaining power
• expanding public investment in education, health and climate mitigation
It concludes that extreme inequality is a policy choice, and reversing it requires political courage and coordinated global action.
A warning with global implications
The Committee closes by warning that inequality is now one of the greatest threats to global stability. Without urgent action, the world risks deeper political polarisation, economic stagnation, food insecurity, climate vulnerability and social breakdown.
“Extreme inequality is not inevitable. It is the result of choices. It can be reversed with political will,” the report states.
