The world is more unequal than at any time since 1945 and inequality continues to grow ‘On average - and taking into account population size - income inequality increased by 11 percent in developing countries between 1990 and A significant majority of households in developing countries - more than 75 percent of the population - are living today in societies where income is more unequally distributed than it was in the 1990s’ UNDP 2013:13

Almost half of the world’s wealth is owned by just 1% of the population (and growing rapidly) The wealth of the 1% richest people = US$110 trillion = 65 times the total wealth of the bottom 50% of world population The bottom half of the world’s people own the same as the richest 85 people 7 out of 10 people now live in countries where economic inequality has increased in the last 30 years A significant majority of the world’s population lives in societies that are more unequal today than 20 years ago with the sharpest increases occurring in economically successful developing countries

Why inequality matters for human development Inequality wastes talent: if women are excluded, half the talent of any nation is squandered – e.g. if all states in India were to perform as well as the best (Karnataka) in eradicating gender discrimination workwise, national output would increase by one third. When banks refuse to lend to poor people, good economic opportunities are wasted. Inequality undermines society and its institutions: in an unequal society, elites find it easier to ‘capture’ governments and institutions, and use them to further their own narrow interests, rather than the overall economic good Inequality undermines social cohesion: ‘vertical inequality’ between individuals is linked to rises in crime, while ‘horizontal inequality’ (for example, between different ethnic groups) increases the likelihood of conflicts that can set countries back decades.

Inequality limits the impact of growth on poverty: a one- percentage point increase in growth will benefit poor people more in an equal society than in an unequal one Inequality transmits poverty from one generation to the next: most cruelly, the poverty of a mother can blight the entire lives of her children. Each year in developing countries around 30 million children are born with impaired growth due to poor nutrition during foetal development. Babies born with a low birth weight are much more likely to die, and should they survive, are more likely to face a lifetime of sickness and poverty. See Duncan Green (2008) From Poverty to Power: how active citizens and effective states can change the world, Rugby, England, Practical Action Publishing and Oxfam International and Richard Wilkinson and Kate Pickett (2009) The Spirit Level, Penguin.