Even Inequality is Unequal

Even Inequality is Unequal

Inequality. It’s on everyone’s mind these days, right? Well, an important new report on the subject shows us that the extent and implications of income disparity differ widely from one part of the world to another. That is to say, even inequality is unequal these days.


Three snapshots and three questions:

The United States is more unequal than Europe: In 1980, the top 1% of earners controlled just 10% of income on both sides of the Atlantic. Since then that share has ballooned to 20% in the US, while inching (ok, centimetering) up to just 12% in Europe.

Key question: Europe’s more progressive taxes and social safety nets dampen inequality. But does that safety net blunt the appeal of populist nationalism or does it intensify nationalists’ questions about who gets to take advantage of those benefits?

India is more unequal than China: The top 10% in India take home 55% of the country’s income. In China, the same group captures a somewhat more modest 41%. Why the difference? Rapid growth and urbanization in China have lifted hundreds of millions out of poverty since 1980, when the average Chinese and Indian had the same income. Today, nearly two-thirds of China lives in cities — two-thirds of Indians still live in the countryside.

Key question: China’s made a strong case for authoritarian development — pulling people out of poverty faster than democratic India. But can China’s authoritarian model continue to satisfy its people at higher and higher levels of income? And in the long run, does India’s democracy help or hinder sustainable growth?

Russia and the Middle East — The worst of both worlds: The average adult’s income hasn’t increased much since 1980 in Russia and the Middle East, while inequality has skyrocketed. Here’s an eye-popper: In Russia, the top 1% of earners have captured 69% of the country’s income growth since 1980.

Key question: For most petrostates, diversifying the economy means sacking entrenched elites and cronies. Lower oil prices may have increased the pressure on these governments to reform, but for the time being most of the focus is on balancing budgets rather than serious moves to diversify the economy (or the political sphere, for that matter.)

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Ian Bremmer shares his insights on global politics this week with a look at the deteriorating human rights situation in Belarus, Delta variant woes, and Lebanon one year after the Beirut blast.

An Olympian refuses to return home to Belarus and an anti-Lukashenko activist has been found dead in Ukraine. What's going on?

Yeah. That anti-Lukashenko activist was found hanged in a park in Kiev. Once again, not exactly likely a suicide. These anti-Lukashenko activists have a way of turning up injured or dead. It's a horrible regime. Their friends are limited largely to the Russians. That's about it. The economic pressure is growing from Europe, from the United States, very coordinated. But the problem is a very hard to do much to Lukashenko when he has not only support of his military, but also the support of most of the workers in the country who aren't prepared to strike because they want to ensure they still have jobs. I expect this is going to continue, but human rights abuses are stacking up. It is nice to see that the Americans and the Europeans are coordinating policy as well as they have been.

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It's been 365 days since twin blasts at a Beirut port decimated Lebanon's capital. More than 200 people were killed and some 7,000 were injured, yet accountability has been scarce. There is ample evidence that multiple Lebanese officials knew that ammonium nitrate was being improperly stored at the port. Four high-ranking politicians, including former PM Hassan Diab, have been charged by a Lebanese judge, but they all refuse to cooperate with the ongoing investigation.

Since then, Lebanon's already-dire economic and financial crises have only intensified. The Lebanese pound, the national currency, has plummeted, losing 90 percent of its value since 2019, when the country's economic crisis erupted. And more than 50 percent of the population is now living below the poverty line.

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The Biden administration is finally devoting more attention to Southeast Asia. Last week US Secretary of Defense Lloyd Austin traveled to Singapore, Vietnam, and the Philippines, marking the first regional visit by a Biden cabinet official. A trip by Vice President Kamala Harris is already in the works as well, and this week Secretary of State Tony Blinken will meet (virtually) with ASEAN counterparts.

The flurry of activity comes after earlier concerns that President Joe Biden was neglecting Southeast Asia, the region where US-China rivalry is the most intense. To understand better what Austin's visit meant, and what comes next, Eurasia Group's lead Southeast Asia analyst Peter Mumford spoke to us from Singapore.

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Raisi won't have it easy: The newly "elected" president of Iran, Ibrahim Raisi, was officially endorsed by Supreme Leader Ali Khamenei on Tuesday. In his inaugural address, the 60-year-old hardliner pledged to get US sanctions removed and to respond to rising socioeconomic grievances within Iran, but he warned that he wouldn't lash Iran's prosperity or survival to "the will of foreigners." In Iran, the president's role focuses mainly on domestic policy, but with the economy reeling one of Raisi's big early challenges will be to continue complicated talks with the Biden administration to renegotiate the 2015 nuclear deal, which would lead to the US lifting some of the harshest sanctions. Both sides say they want a new deal, and have gone through half a dozen rounds of negotiations already, but they remain at odds over who should make what concessions first. Raisi also pledged to restore Iranians' flagging trust in their government and to improve the economic situation, but in ways that are in line with "revolutionary principles." He'll have his hands full with that. And don't forget that the likely imminent (re)takeover of neighboring Afghanistan by the Taliban — whom Tehran don't like at all — will also occur on Raisi's watch. Good luck, Mr. President, you'll need it.

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158: To boost vaccination rates, New York City will soon require proof of COVID vaccination or a negative test to enter gyms and restaurants, as daily new infections in the Big Apple have jumped 158 percent over the past two weeks due to the more contagious delta variant. New York is the first major US city to take this step, following similar schemes already in place in France and Italy.

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