UNESCAP report says the gulf between the rich and poor is increasing

To go by a report released by UNESCAP (The United Nations Economic and Social Commission for Asia and the Pacific), the gap between the rich and the poor is increasing. Increase in income inequality in some of the major economies of the world like India, Indonesia, and China is said to be the major contributing factor for this problem.

economy (2)

The difference in income is the main factor that divides people into three classes – the rich, the middle class, and the poor. The gap between rich and poor is narrow when there is not much of difference between the incomes, but when this difference broadens, it increases the gap between the rich and poor, which is not a good sign for the economy, and can even pose threat to stability.

The report revealed that in recent decades, many major economies have seen upsurge in the inequality of income at a national level. Inequality is a major socio economic challenge that is harmful for the balanced growth of a nation. Some factors widen the gap between poor and the rich, and economies use several strategies to find out those factors and work to decrease this gap. One such measure that is used to measure inequality of income is called the Gini Coefficient.

According to the results based on this method, the income inequality increased to 33.9 from 30.8 in India between 1990 and 2000, and in China and Indonesia, the figure rose up to 38.1 from 29.2. Measured during the same period, the coefficient dipped in countries like Malaysia, Cambodia, Philippines, Nepal, Thailand, Uzbekistan, and Kyrgyzstan.

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Out of the many factors that give rise to the inequality of income in an economy are poor education quality, weak labour market institutions, inadequate access to land and credit, excessive asset concentration, and poor social protection systems. According to the report that is based on UNESCAP’s study in 40 countries in the Asia-Pacific region, wealth concentration is what leads to inequality of income and eventually a widening of the rich and the poor gap. The gap between the income and the wealth held by poor and the ultra rich people is striking. Due to the growing share of capital in national income, the wealth-income ratio is rising and is making the inequality gap worse.

Besides vertical inequality among individuals, the horizontal disparity is also on the rise, as in between coastal and interior regions, or rural and urban areas. This kind of regional disparity is a major concern for a multiracial country because such an inequality can trigger political and social instability.


Income inequality is detrimental for an economy, as it increases the gap between rich and poor. Reports suggest the gap between the rich and poor is widening, which is never a good indicator for the socio-economic status of any region.

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