SDG 10: Reducing inequality within and among countries

Economic inequality is the difference found in various measures of economic well-being among individuals in a group, among groups or among countries. Economic inequality also refers to income inequality, wealth inequality, which is popularly known as the wealth gap. Economic disparities are focused in three metrics: wealth, income, and consumption. Economic inequality varies based on societies, historical periods, economic structures and systems. Social inequality occurs when resources in a given society are distributed unevenly, typically through the norms of allocation that engender specific patterns along the lines of socially defined categories of persons. It is the differentiation preference of access of social goods in the society brought about by power, religion, kinship, prestige, race, ethnicity, gender, age, sexual orientation and class. The term can refer to cross-sectional distribution of income or wealth at any particular period, or to changes of income and wealth over longer periods of time. Research suggests that greater inequality hinders long term growth. Whereas globalisation has reduced global inequality (between nations), it has increased inequality within nations.
While pronouncing the Sustainable Development Goal (SDG) 10, the United Nations (UN) has observed that the international community has made significant strides towards lifting people out of poverty. The most vulnerable nations - the least developed countries, the landlocked developing countries and the small island developing states - continue to make inroads into poverty reduction. However, inequality still persists and large disparities remain in access to health and education services and other assets. The UN has further observed that while income inequality between countries may have reduced, inequality within countries has risen. There is growing consensus that economic growth is not sufficient to reduce poverty if it is not inclusive and if it does not involve the three dimensions of sustainable development - economic, social and environmental. SDG 10 has advocated that to reduce inequality, policies should be universal in principle - paying attention to the needs of disadvantaged and marginalised populations.
EXISTING STATE OF GLOBAL AND NATIONAL INEQUALITY: Facts and figures presented in the SDG 10 documents show that--
(1) On average-and taking into account population size-income inequality increased by 11 per cent in developing countries between 1990 and 2010. (2) A significant majority of households in developing countries-more than 75 per cent of the population-are living today in societies where income is more unequally distributed than it was in the 1990s. (3) Evidence shows that beyond a certain threshold, inequality harms growth and poverty reduction, the quality of relations in the public and political spheres and individuals' sense of fulfilment and self-worth. (4) There is nothing inevitable about growing income inequality; several countries have managed to contain or reduce income inequality while achieving strong growth performance. (5) Income inequality cannot be effectively tackled unless the underlying inequality of opportunities is addressed. (6) In a global survey conducted by the UN Development Programme, policymakers from around the world acknowledged that inequality in their countries is generally high and potentially a threat to long-term social and economic development. (7) Evidence from developing countries shows that children in the poorest 20 per cent of the populations are still up to three times more likely to die before their fifth birthday than the children in the richest quintiles. (8) Social protection has been significantly extended globally, yet persons with disabilities are up to five times more likely than average to incur catastrophic health expenditures. (9) Despite overall declines in maternal mortality in the majority of developing countries, women in rural areas are still up to three times more likely to die while giving birth than the women living in urban centres.
Reducing inequality (SDG 10) targets are set to progressively achieve and sustain income growth of the bottom 40 per cent of the population at a rate higher than the national average and empower and promote the social, economic and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion or economic or other status. For ensuring equal opportunity and reducing inequalities of outcome, including by eliminating discriminatory laws, policies and practices and promoting appropriate legislation, policies and action in this regard, adopting policies, especially fiscal, wage and social protection policies, and progressively achieve greater equality and improving the regulation and monitoring of global financial markets and institutions and strengthening the implementation of such regulations should be crucial. Enhanced representation and voice for developing countries in decision-making in global international economic and financial institutions in order to deliver more effective, credible, accountable and legitimate institutions might be ensured.
In a statement ahead of G-8 and IMF (International Monetary Fund) Summit, the UN on April 13, 2018 upheld the fact that the prospects of around 800 million of the world's poorest people remain in dire straits. The global economy is experiencing a moderate upturn and momentum around sustainable investing is growing, but the vast majority of investment is still short-term oriented and commitments by the international community to create sustainable economies are not being met. There is an increasing interest in socially responsible investing, but that is no substitute for a broader transformation in the financial system. The statement stipulates that the current system rewards investors, financiers and project managers that prioritise short-term profits. Similarly, policymakers are excessively focused on short-term considerations. But there is a price to pay. Infrastructure projects are shelved in favour of short-term priorities. Small businesses and women remain almost excluded from the financial system.
Pension funds, insurance companies and other institutional investors hold around $80 trillion in assets. But the majority of their resources are invested in liquid assets, such as listed equities and bonds in developed countries. Investment in infrastructure still represents less than 3.0 per cent of pension fund assets with investment in sustainable infrastructure in developing countries even lower.
According to the statement, the solution lies in a multifaceted approach. It includes changing payment practices: the compensation of financial advisers and portfolio managers is too often linked to short-term results. More transparency also help-- some countries now require all listed companies to disclose financial risks they face from climate change. It has been aptly observed that short-sighted policies also result in a lack of access to finance for countries in urgent need. Support for countries affected by disasters is often too little, too late. Innovative financial instruments exist that provide quicker access to funding. Countries can set up insurance-like mechanisms, and the international community can support those that can't afford premiums. Loans can be set up to reduce repayments automatically during crises. But so far, major funders have not taken up these promising tools.
BANGLADESH SCENERIO: Despite significant improvement in Bangladesh's economic performance, formidable economic challenges still lie ahead in terms of reducing inequality in the country. An estimated 63 million people live under the poverty line in a country of 163 million people here. Bangladesh has also witnessed rapid urbanisation with more than one third of the population now living in urban areas. Despite the fact that population growth rate has come down to 1.2 per cent per annum, the country remains one of the most densely populated in the world. This urbanisation has been spurred by the structural changes in the rural economy resulting from increased commercialisation of the agriculture sector and widespread rural poverty.
But this rapid urbanisation has caused heightened urban poverty with extremely poor living conditions for these rural migrants and also serious urban congestion. Unequal distribution of wealth affects overall progress of the nation in several ways, and all of them produce profound negative effects. It is obvious that in order to reduce inequality in Bangladesh, much more needs to be done to improve access to employment, health and education for the bottom half of the population.

Dr Muhammad Abdul Mazid is a former Secretary to the government and Chairman of National
Board of Revenue.
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