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An unequal world

October 23, 2018


The writer is a Senior Fellow with UC Berkeley and heads INSPIRING Pakistan, a progressive policy unit.
The writer is a Senior Fellow with UC Berkeley and heads INSPIRING Pakistan, a progressive policy unit.

WIDESPREAD poverty is clearly the biggest blot on the conscience of the most prosperous era in human history. China and India’s rapid progress in the last three decades has caused a major dent in the number of poor people living on less than $1.9 per day globally — from around 1.85 billion in 1990 to 736 million in 2015. But this still represents nearly 10 per cent of the world population.

Furthermore, $1.9 per day does not ensure a life free of disease and drudgery and can only be seen as representing the absolute poverty threshold. Once one relaxes the definition of poverty to around $3 per day, the number of poor people globally increases to close to 3bn. While the world is still grappling unsuccessfully with the issue of poverty, the much more explosive issue of inequality has taken centre stage.

Oxfam’s annual reports on global inequality have helped reveal the true extent of inequality in today’s world and its underlying causes. The richest 1pc today owns more wealth than the rest of the 99pc living on this planet. Eight men now own the same amount of wealth as the poorest half of the world. In the US over the last 30 years, the growth in the incomes of the bottom 50pc has been zero, whereas the incomes of the top 1pc have grown 300pc. Leading UK CEOs earn as much in a year as 10,000 people working in garment factories in Bangladesh.

Election manifestos are largely silent on inequality.

If the statistics on inequality are shocking, so are the causes of inequality identified by Oxfam’s research. The dodgy practices of large corporations, the backbone of global capitalism, play a leading role in perpetuating global inequality. These range from crony capitalism, tax avoidance and evasion, squeezing the returns to workers and sub-contractors and buying politics. Research shows that more than poverty it is inequality that is the source of resentment and anger that increases crime, conflict and terrorism. Inequality also reduces trust within society, slows down growth, causes political instability and negatively affects health and social indicators.

Oxfam’s research on inequality in Pakistan identifies regressive taxation, trade liberalisation and inflation as major causes of national inequality. But these only represent the immediate economic causes which mask the deeper social and political causes of inequality that take different shapes from the household to national levels. These deeper causes mean that regressive taxation, trade liberalisation and inflation affect different social and political groups differently. At the household levels, gender is the biggest cause of inequality with females having much lower access to health, education, wealth and income opportunities than men. Gender issues are also relevant at the community levels, with female-headed households generally being poorer.

Caste, sect, tribal and religious issues also become salient at community levels in the traditional economy that hosts the vast majority in the rural areas and a large chunk even in urban areas. Informal social and political mores ensure that weaker groups along these dimensions have lower access to advancement opportunities. Finally, even in the modern sector, class issues are paramount as labourers suffer from low income and social protection avenues. Ethnic issues are also salient, with ethnic groups in Punjab, KP and Karachi disproportionately represented in upper and middle classes and with Punjab and KP more represented in the permanent pillars of the state, ie, military and bureaucracy.

Yet, while official policy in Pakistan has started giving some attention to poverty issues, inequality is still a taboo issue nationally. It was only in the late 1960s and early 1970s when inequality became a major part of the national discourse given the limelight placed by the late Dr Mahbub-ul-Haq on 22 families and the eruption of ethnic politics nationally. But the Zia era ensured that all progressive discussions around issues of inequality were snuffed out.

Election manifestos of major political parties are largely silent on issues of inequality and our economic policy remains geared towards protecting the interests of upper and middle classes despite rhetoric to the contrary. So senior officials of every new government dealing with serious economic problems make it a point to meet stockbrokers, representatives of textile associations and officials of other Pakistani business groups. But rarely if ever do they hold meetings with labour and peasant leaders or representatives of other oppressed groups.

It is only by overcoming our discomfort with dealing with issues of gender, sect, faith, caste, tribe, class and ethnicity publicly that we can start addressing the critical issues that plague Pakistan. Otherwise, this neglect of inequality will continue to be manifested in the form of high incidences of crime, terrorism and other social ills.

The writer is a Senior Fellow with UC Berkeley and heads INSPIRING Pakistan, a progressive policy unit.

Published in Dawn, October 23rd, 2018

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