Facing the Risks of Wealth Inequality
Wealth Inequality Initiative by Julius Baer Foundation
Our goal is to shed light on and drive action against the global disparities existing in wealth and social capital.
Ariane De Lannoy in the Wealth Inequality Initiative Podcast #8
Ariane De Lannoy is an associate professor and chief researcher in the Southern Africa Labour and Development Research Unit of the University at the University of Cape Town. Her work focusses on youth and youth development in the complex post-apartheid context of South Africa, where stark socio-economic divisions persist to this day.
In this podcast talk, Julius Baer Foundation CEO Laura Hemrika converses with Ariane about inequality’s risks and possibilities for change.
Witnessing inequality
Conducting research in South Africa, a country that consistently ranks at or near the top of global income inequality indices, regularly confronts Ariane with the extreme gap between rich and poor. She describes data collection in Cape Town’s most deprived areas as a “visceral daily experience” of the inequalities. “I often hear young people talk about how they feel entirely invisible in a society that doesn't seem structured to enable them to move forward”, she says.
Ripple effects reach top
Of course, focusing on inequality means looking at both ends of the spectrum – not just the poor, but also the holders of wealth. Ariane cites recent estimates that the world’s top 1% currently owns over twice as much wealth as more than 7 billion people combined – the vast majority of the global population. This kind of extreme wealth concentration harms everyone. “Countries that face higher levels of wealth inequality, also face worse levels of health and well-being, emotional well-being and physical well-being across all levels of society”, says Ariane. This is because extreme inequality destroys social cohesion, leading to widespread mistrust, insecurity, erosion of institutions, and – in the worst case – violence.
The resulting instability also harms the economy and undermines the conditions needed to create value and wealth in the first place. When rising numbers of people are excluded from meaningful participation in labour markets, investment, higher education, and so on, overall consumer demand for goods and services falls and the economy itself shrinks. So, in the final analysis, these cycles of wealth capture, increasing exclusion and downward development threaten everyone.
Turning the tide with partnership
Since 2018, Ariane has been advising the Julius Baer Foundation on wealth inequality projects, initially as an external expert and now also as a Foundation Board member. She acknowledges that inequality is highly challenging to tackle due to the number of drivers involved and the circularity of causes and effects. But she observes that effective policy levers exist – whether redistributive measures or better education access – and highlights the promise of collaboration between philanthropy, academia, and practitioners. United in a “commitment to build a more just society”, the partners can build the evidence bases needed for effective interventions in different settings.
Finally, Ariane commends the courage of the Julius Baer Foundation in seeking to address inequality and acting as a convenor that unites collaborators from all points along the wealth spectrum. Ultimately, she believes, the “sense of isolation” experienced by marginalised young people in South Africa and elsewhere “can be broken by providing a platform for conversation”. Bringing more and less privileged members of society together, as the Foundation’s projects strive to do, enables both sides to understand each other’s lived reality and cooperate on solutions that benefit all.
Listen the whole conversation here?
Did you know that...
Glossary
The Wealth Inequality Initiative Glossary, in partnership with COES , clarifies expressions at the core of the wealth inequality debate - because they do matter to us all. Learn more about what Health Inequality is here.
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Equality Talks - Africa Edition
The Julius Baer Foundation is committed to reducing wealth inequality. For nearly 60 years, we have been dedicated to making meaningful and impactful contributions to society. Today, our work focuses on reducing wealth inequality by convening leading thinkers and actors on the topic and supporting projects around the globe for a world of equal opportunities.
?We are pleased to announce a series of virtual events that will focus on the wealth inequality challenge in Africa.
Our partners from #Malawi, #Tanzania and #SouthAfrica will share with us their innovative approaches to “Empowering communities across Africa through sustainable initiatives”.
?We believe that constructive collaboration is key to reducing wealth inequality in Africa. Working together with our partners, we can identify new and innovative ways to create sustainable change. We hope this series of events will inspire you to act and join us in our mission to create a more equitable future for all.
Annual Report 2023: Creating a world of equal opportunities together
We are proud to present to you the Julius Baer Foundation 2023 Annual Report. We hope you will enjoy reading and hearing about our work, the accomplishments of our valued partners, and the increasing momentum of our different collaborations.
In 2023, we concluded the year by strengthening our commitment to reducing wealth inequality, one of the most pressing challenges of our time. ?In this report, you will be able to read how this transition allows us to be more focused while also acknowledging the multifaceted nature of wealth inequality, including the pivotal role of education. Critically, wealth inequality cannot be tackled in isolation and this is reflected in our work. We continue to support innovative and inspiring projects around the world but also increasingly embrace our role as a convener. We engage with diverse stakeholders, including clients of Julius Baer, other philanthropic foundations and many more.
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