February 5, 2014

Richest 85 individuals own more wealth than half the world's population, says Christine Lagarde

In India, the net worth of the billionaire community increased twelve-fold in 15 years, enough to eliminate absolute poverty in this country twice over, said the IMF chief.
London: Inequality has increased over the past three decades all over the world. "Seven out of ten people in the world today live in countries where inequality has increased," International Monetary Fund (IMF) Managing Director, Christine Lagarde, has said.

Quoting data from the the two largest democratic countries, India and the US, Lagarde said the income inequality is reaching dangerous proportions.

Delivering the Richard Dimbleby Lecture in London on Monday, Lagarde said, "In India, the net worth of the billionaire community increased twelve-fold in 15 years, enough to eliminate absolute poverty in this country twice over."

The IMF chief said, "We are all keenly aware that income inequality has been rising in most countries," adding that the richest 85 people in the world own the same amount of wealth as the bottom half of the world's population.

In the US, inequality is back to where it was before the Great Depression, and the richest 1 percent captured 95 percent of all income gains since 2009, while the bottom 90 percent got poorer, Lagarde said.

She lamented that in the past, economists had underestimated the importance of inequality.

In the coming decades, the world's population will get much larger and much older. In 30 years time, there will be about two billion more people on the planet, including three quarters of a billion people over the age of 65. By 2020, there will be more old people over 65 than children under five, Lagarde said.

She said, "The geographical distribution will also change...In the coming decades, we expect India to surpass China, and Nigeria to surpass the United States, in terms of population... And both China and India will start ageing in the near future," Lagarde said.

"Right now, the young countries are seeing a 'youth bulge', with almost three billion people, half the global population, under age of 25. This could prove a boon or a bane, a demographic dividend or a demographic time bomb. A youthful population is certainly fertile ground for innovation, dynamism, and creativity.

Lagarde called for generating enough jobs and a focus on improving education. "Looking ahead, factors such as the internet revolution, the rise of smart machines, and the increasing high-tech component of products will have dramatic implications for jobs and the way we work," the IMF chief said.

(SEE text of speech: A New Multilateralism for the 21st Century: The Richard Dimbleby Lecture - By Christine Lagarde, Managing Director, International Monetary Fund)

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