How apropos it has been to watch the US midterm election returns from here in this once divided capital city of Germany. Though some elections are still to be decided — a runoff is expected in the state of Louisiana — the prospects for a politically divided Washington are clearer than ever.
Washington could well face two years of political gridlock under the watch of a weakened Democratic president and a U.S. Congress now fully under the control of Republican leadership. This might not bode well for those seeking greater China-US cooperation and strengthened international engagement, as attention in the United States understandably shifts to key domestic issues of concern to the American voting public.
The electorate's support for efforts to increase the minimum wage paid to workers in some states, as well as general discontent over the U.S. economy, reminded me once again of calls to address growing inequality, whether in the United States, Europe or Asia. This divide between the rich and the poor is of concern not just in America and the West, but also in China, including the Special Administrative Region of Hong Kong.
Often removed from the reality of persistent poverty, political leaders in Berlin, Beijing and Washington would benefit from pondering the question: “Does inequality matter?” As for which Asian nation or region is the most ‘unequal’ when it comes to the ‘Gini’ index, a common measure of income inequality, the answers can be surprising.
In the latest data available through the CIA World Fact Book, Hong Kong tops the list for having the most unequal distribution of family income in Asia — perhaps no small factor in the city's ongoing unrest. That means the gap between the average richest and poorest families in Hong Kong is the largest in the region. This special administrative region of China ranks 12th “most unequal” out of some 141 places ranked. Papua New Guinea (17), Sri Lanka (22) and China (27) are deemed the next most unequal places in Asia and the Pacific. The United States ranks 41st most unequal. The most equal place in the world when it comes to distribution of average family income is Sweden. The top five most unequal places are all in sub-Saharan Africa: Lesotho, South Africa, Botswana, Sierra Leone and the Central African Republic.
While such rankings are reliant on the availability and accuracy of underlying data – and indeed some governments including China have been reluctant in the past to share such data openly – examples exist in every nation of the gap between rich and poor.
One need not contrast the extreme wealth of America’s and China’s richest families with those of its poorest — or go back to the West and East Berlin of some 25 years ago, before the fall of the Wall — to understand that a divide exists between the haves and the have-nots, and between those with connections, and those with none at all.
Asia and the Pacific remain home to two-thirds of the world's poor. An estimated 1.6 billion people still struggle on less than $2 a day in the region, according to the Asian Development Bank. Approximately 700 million live on less than $1 a day.
Two billion people in the region lack access to improved sanitation, 850 million lack access to safe drinking water and one child in 20 dies before reaching the age of five. Ethnic and religious minorities and indigenous peoples are often marginalized and excluded from Asia’s continuing growth.
That too is the unequal fate of all too many people in the Asia of today. Certainly there is more to a nation, or a region or a market than its Gini coefficient. China’s leaders are justifiably proud in pointing to GDP figures and showcase infrastructure projects, even as growth rates have slowed in Europe and the United States. If poverty is reduced overall, some leaders note, perhaps widening inequality can be justified.
Indeed, Asia as a region has enjoyed tremendous growth these past decades and has much to be proud of. The world should welcome Asia’s rise, including China’s success in lifting hundreds of millions out of poverty.
Perhaps more important than official Gini rankings are trends and attitudes as to whether or not things are unequal or getting better, and whether everyday individuals have the opportunity to succeed and to get ahead. The “genie of inequality” in China and the United States has long been out of the bottle. Now business, government and civil society, and all citizens – regardless of the state of a nation's democracy – should also think through what matters most about inequality.
In doing so, they may well find that whether driven by unequal access to education, electricity, water and sanitation, or other public services, inequality of opportunity is too often at the root of an inequality of results. This month, a united Germany celebrates the fall of the Berlin Wall, and many will marvel at the transformation of the one-time East Germany. Others may well focus on the persistent divide between the haves and the have-nots.
Whether once separated by physical walls or split by existing political ones, today's leaders in China, the United States and Europe — including newly elected members of the U.S. Congress — should also think about how much has been and can be accomplished when walls come down, and engagement flourishes.
