Practice What You Preach? How the G20 Countries Are Failing on Inequality and Environment

20/01/2012 22:39 GMT | Updated 21/03/2012 09:12 GMT

The world has a new global steering committee, the G20 group of developed and 'emerging' economies, which has committed itself publicly to supporting economic growth that reaches the poorest people, and doesn't destroy the environment in the process.

At least, that's the talk, but according to a new survey by Oxfam, the walk isn't happening. That matters because the G20 countries are home to half the world's poor people, and account for a much greater chunk of its ecological footprint. Climate change is just the best-known consequence of such failings. Rising inequality also undermines political stability - ask the Occupy movement.

Inequality is growing in most G20 countries. Using a new dataset compiled by Frederick Solt, we show that only four G20 countries - including just one high-income country, Korea - have reduced income inequality since 1990 (see chart). What's particularly interesting is that a large number of countries outside the G20, including low-income and lower middle-income countries, have successfully reduced income inequality in this period. Is there something about a seat at the top table that leads countries to neglect social justice?

Our analysis illustrates just how damaging this trend is. In South Africa more than a million additional people will be pushed into poverty between 2010 and 2020 unless rapidly growing inequality is addressed. The rewards flowing from increased equality are similarly dramatic. In Brazil and Mexico, bringing inequality down to the level in Indonesia (close to the G20 average) could reduce the number of people in poverty by 90% in the space of a decade.

This analysis focuses on income inequality, which though important is just one of many inter-related forms of inequality. In its broadest sense, inequality denies the rights of whole sections of society to be treated with dignity and respect. In many G20 countries, at least half the population are affected: the often subordinate status of women and girls translates into less access to health and education, lower incomes, and poorer life chances than men.

As for all that communiqué-speak about sustainability, no country (whether in the G20 or outside) has yet demonstrated that it is possible to combine high average incomes with sustainable natural resource use.

However, several middle-income countries have succeeded in reducing the resource-intensity of their economic growth. Between 1991 and 2007, Mexico's gross domestic product (GDP) grew four times faster than its CO2 emissions. China's grew two and a half times faster.

By contrast, the G20's high-income countries have on the whole performed terribly. Only four G20 countries have reduced their carbon emissions since the Rio Summit in 1992.

The dangerous climate change and environmental degradation that results hits the poor hardest. The poor not only depend most on natural resources for their livelihoods, but also tend to live in places disproportionately affected by climate change.

Changing course is hardly rocket science. The Oxfam paper sets out five key policies governments can adopt: redistributing wealth; ensuring universal access to health and education; progressive taxation; removal of barriers to equal rights and opportunities for women; and land reform.

Oxfam will present the report to the Mexican President at the World Economic Forum in Davos next week (Mexico is this year's G20 chair) - the new body had better get used to the kind of scrutiny the G8 used to receive, before it passed on the baton..