Inequalities

Inequalities

Inequalities

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© AFD

The fight against inequality is firmly embedded in the European Union’s development cooperation. Reducing social and economic inequalities is not only key to ensuring that no one is left behind, it is also a necessary condition for sustainable poverty reduction and social cohesion. Indeed, additional gains in poverty reduction at country level, will only be achieved if inequalities between citizens decrease. If poverty is to be reduced, discrimination, insecurity, access to nutrition, health and education services, and moreover access to decent work, must all be ensured comprehensively, fulfilling the commitment to ‘leave no one behind’.

In a world where 800 million people still live in extreme poverty, inequalities, both within and between countries, remain immense and require urgent action. Particularly within-country inequality has been on the rise and is currently higher than ever before.

The scale of the challenge is enormous:

  • 1 % of the world’s population controls more than 50 % of its wealth,
  • Over 75 % of people in the developing world live in countries where income is more unequally distributed than in the 1990s,
  • Children born into poverty are almost twice as likely to die before the age of 5 as those from wealthier families,
  • 1 in 4 girls in developing countries are not in school,
  • 55 % of the global population (about 4 billion people) are not covered by at least one social protection benefit, while this increases to 82 % in Africa.

These widening disparities require the adoption of sound policies that stimulate economic growth, ensure a fair distribution of growth dividends throughout the population, empower the poorest in society and promote the social and economic inclusion of all. To reduce inequality, we must understand its causes and consequences, which can be complex and deeply rooted in social, economic, political and environmental systems and resources.

Evidence shows that, beyond a certain threshold, inequality harms growth and poverty reduction, erodes trust in public institutions, increases the chances of social and political instability, and decreases an individual’s sense of fulfilment and self-worth. However, extreme and ever-rising inequalities are not inevitable, as several countries have managed to contain or reduce income inequality, while achieving strong growth.

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Reducing inequalities is fundamental to the 2030 Agenda for Sustainable Development and is central to the commitment to ‘leave no one behind’. Sustainable Development Goal (SDG) 10 is a stand-alone goal focused on reducing inequalities within and among countries.

However, tackling inequalities resonates throughout the entire 2030 Agenda, as it can accelerate progress towards many of the other Sustainable Development Goals such as, ending poverty and hunger, good health and wellbeing, quality education, gender equality, clean water and sanitation, affordable and clean energy, decent work and economic growth. 

The European Union focuses its development cooperation on targeting the key drivers that can help reduce inequalities. These include improving development financing and tax systems, increasing economic inclusion and decent work while stimulating private sector development, enhancing social services and access to social protection, empowering women and creating opportunities for youth and disadvantaged communities, tackling irregular migration, while facilitating safe migration and mobility, and combatting climate change.

The Research Facility on Inequalities is an initiative of the European Commission, implemented by AFD, the French Development Agency. It seeks to enhance knowledge and understanding of economic and social inequalities in order to better respond to this complex development challenge.

Learn more about the facility here.