UN Geneva - Multimedia Newsroom : International Panel on Inequality (IPI), Founding Committee first meeting

Be asking some questions.

So we're going to start with Professor Yayati Gosch, the University of Massachusetts Amras and member of the IP founding committee and also the extraordinary committee of the G20.

So Professor Gosch, the skip it question.

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And we're we're actually behind the schedule.

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Thank you very much.

You know, it has been such a privilege to be on this committee and with these very exceptional colleagues.

And of course, as you all know, Professor Stiglitz absolutely leads from the front, and we're all, you know, really running to keep up with him because he's tremendous.

But I also want to acknowledge the exceptional, extraordinary work of the secretariat because this is a report that was completed in two months.

And I personally did not think it was possible.

But it happened and it only happened because of the really tremendous work, I think 24 hour a day work of our Secretariat.

So thank you all very.

So I think my letter, you wanted me to talk about the drivers of inequality is because, because I'm always going on about yes, but it is.

It's there in the report.

But for those of you who haven't had time to look at it, we have tried to summarise what we feel are some of the most important things that actually have created the inequality emergency that we all recognise.

And of course, there are the most structural features.

There's demography, there's technological change.

There are the systemic features that were mentioned, caste, race, ethnicity, etcetera.

There are shocks like the pandemic, like, you know, wars and and so on.

But we identified a bunch of other drivers that we think are very important.

There is, of course, the historical legacy of, you know, the pattern of colonialism that created differences across countries, but also the industrial revolution that was also financed by the colonialism, but also meant a dramatic change in relative per capita incomes across countries.

But it also left a legacy of very high inequality in low and middle income countries.

But in a sense, what we have focused on are the economic drivers that we feel are the policies that created inequality.

And that's why we have said throughout that it's a policy choice and a political choice.

And I think it was also mentioned by our esteemed country supporters.

You know, I have to say, this is just completely, please forgive me for saying this.

You know, in a world where we're all so depressed by most of our leaders, it has been an absolute inspiration to come across leaders who are so not just progressive, but really thinking forward and really on the side of the good.

It's very rare.

And I, I deeply appreciate it.

So among the economic or policy drivers that we identified, there is of course the fact of the deregulation of markets, particularly the deregulation of capital finance capital, uh, that has enabled a lot of instability in the system.

And the instability typically worsens the conditions of those who are less fortunate and enriches some who are others.

There's been the labour market deregulation and the kinds of patterns of trade openness that have dramatically reduced the bargaining power of labour.

We have had very regressive and outdated tax systems that do not allow us to tax the rich even if we want to and don't allow us to tax multinational corporations even at the same rate as domestic companies.

So that regressive pattern then once again means that the prior inequalities that come, the market inequalities are reinforced by the distributive inequalities that come about because of fiscal policy.

We've had the the power of deregulated finance.

I want to emphasise because it is so clear in a world of currency hierarchies that it has dramatically accentuated the impacts of all kinds of things that go on in the world.

Whether it is a shock, whether it is macroeconomic policies of advanced economies.

All of those are much, much worse and exaggerated for lower and middle income countries because of the currency hierarchies, because of investor perceptions that sort of amplify the problems that already exist.

But it's also the case that deregulated finance, as I mentioned, has resulted in periodic crises and through these crises states have supported and protected and subsidised large finance and that has added to inequality as well.

The privatisation of state owned enterprises, of energy, utilities, transport, water, education, health, you name it, everything is privatised.

That too adds to inequality.

It makes these commercial, it makes it reduces the access of those who cannot afford it and it dramatically in creates different dimensions of inequality which perhaps did not exist as much earlier.

All of this is associated with a broader transfer of wealth from public to private.

We have a chart in our report which I believe is really quite telling.

A dramatic increase in private wealth and a stagnation and even slowed, I mean even a reduction in public wealth.

And that has implications that gives less resources to the public to provide public goods and services, to enable to achieve the social and economic rights of citizens and so on.

Then of course, the issue of sovereign debt, another aspect of the financial deregulation.

But that in turn results in austerity measures and stabilisation policies, especially for those who are coping with the indebtedness, often for no shock of their, for no reason of their own, but because there are global shocks like pandemics or rising food prices or and so on.

There are the spillover effects of macroeconomic policies of the rich countries.

If they raise interest rates, not only do our interest rates go up by that same amount, they go up much more because of the higher risk premium that is inevitably attached even when we're not so risky.

And I think, you know, the the G20 in Africa had a very good discussion on the cost of capital.

There are intellectual property rights which have commercialised knowledge to a degree that has enabled very large corporations to take control over knowledge that they haven't actually even created themselves.

Most of the large multinationals buy up the smaller companies that have created the knowledge and then hold on to it, use that, use patent rights, use licencing, etc, to create monopolies and to reduce access, particularly of the poor.

And of course all of this is related to a larger and broader issue, which is it's not that, I mean, inequality is of course bad because of what it does to the lives of ordinary people and, and we all recognise that, but it's particularly bad now because it's self reinforcing.

Wealth creates power, and power means that you have elite capture of laws, institutions, regulations, policies, all the things that then keep worsening inequality, which is why ever since, you know, people started talking about inequality, it got worse and worse and worse because of that very forward push of inequality that comes from wealth.

I know that Wanga is going to be talking about intersectional implications of all this.

I'm not going to go into that, but I also just want to bring it up a little bit currently, you know, because of that whole structure.

Any shock to the system dramatically and disproportionately affects the poor and it affects lower and middle income countries more so whether it is the war today or the closure of the Hormuz Strait.

There's more complaints about it in Europe and the US, but the real damage is coming to developing countries, whether in terms of oil prices or fertiliser prices or absolute lack of supply for very basic things.

And this is repeated over and over again in all kinds of global shocks.

So yes, those are the drivers.

And I think it's kind of obvious that then to control it, you have to control those drivers and those can be controlled is really our message.

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International Panel on Inequality (IPI), Founding Committee first meeting - 16 March 2026