At Davos, Income Inequality Should Be Front and Center

Income inequality has risen to the top of the global agenda in recent weeks. At Davos, where some of the world’s wealthiest and most powerful people are attending the World Economic Forum, the organizers have made inequality a theme of the event. It was a smart choice. As Oxfam’s recent report made abundantly clear – it calculated that the world’s 85 wealthiest people control as much wealth as the poorest 3.5 billion people – massive income inequality is a stain on our collective conscience.

Over the next few days in Switzerland, participants should do more than just engage in group hand-wringing sessions on inequality while nibbling on hors d'oeuvres. Instead, we should use this moment to talk about taking substantive steps that can help lessen the gap between the rich and the poor.

Three steps should guide us. First, we should closely track the inequality gap. The World Bank Group will start doing that this fall, measuring every year how the poorest 40 percent are doing compared to the rest of the population. Second, we should invest in the kinds of projects that can lead to inclusive economic growth in countries and regions; for many sub-Saharan African countries this could mean investing in transformative energy projects, which will attract industry and create many more jobs. And third, countries need to invest in their people over the long term, improving education, health care access, and social safety nets.

In Davos, inequality is likely to surface in discussions around three critical issues: the fight against climate change, prospects for global economic growth, and the effects of the conflict in Syria. All are linked by their disproportionate impact on the world’s poor.

1. Climate change is a threat to our fragile existence on this planet, but it is the people living in extreme poverty who will be hit the hardest. In fact, those with the fewest resources suffer most from its effects – thus exacerbating inequality. One of our objectives is to build greater resilience to climate disasters both in rural areas (where 60 percent of the poor live now), and in cities (where millions of poor people move each year). Investments like these will spare many lives, save money, and preserve greater equity.
   
   
2. Our economic projections show that both high-income and developing nations are growing. This is good news for the poor. Over the last five years developing countries were the engines of growth and job creation -- both critical for lifting people out of poverty. All nations have to continue to make the necessary fiscal reforms to bolster growth. They should invest in education and health. These investments strengthen their economies. They also give people the tools to escape poverty, and to share more equally in economic gains.
   
   
3. Syria’s conflict has claimed the lives of nearly 130,000 people and forced an estimated 6 million people from their homes, including more than 2.3 million registered refugees in Turkey, Jordan and Lebanon. Syrians now account for a quarter of all people living in Lebanon -- that’s the equivalent of twice the population of Canada (over 70 million) moving to the United States in just 18 months. We need to do more to help the nations hosting the refugees, as well as provide direct assistance to the displaced and battered refugees themselves. A failure to do so will push hundreds of thousands of men, women and children into extreme poverty, making the region even more unequal and unstable.

As leaders in Davos discuss the important issues of the day, they should always be mindful of how these developments affect the more than 1 billion people now living in extreme poverty. Their fate is tied to ours in countless ways. It is in the interest of all nations and people to build a world without extreme poverty and to ensure that growing prosperity is shared by all.

Jim Yong Kim is President of the World Bank Group

Read more coverage from LinkedIn Influencers in Davos here.

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