This past week saw some extraordinary tales of old and new wealth emanate from New York. On the eve of a United Nations climate summit, some of the members of the storied Rockefeller family, which made its vast fortune originally in oil, joined in a pledge to divest more than $56 billion of investments in fossil fuel in favor of clean energy.
Further downtown at the New York Stock Exchange, Chinese entrepreneur and e-commerce pioneer Jack Ma saw his and his family’s wealth grow astronomically with the successful listing of Alibaba Group. By some accounts, the Alibaba international public offering was the largest in the world, valuing the company at some $25 billion, and founder and executive chairman Ma is now reportedly the richest man in China.
Yet, amidst these tales of tremendous wealth, I am reminded once again of measures of inequality and the gap between the rich and the poor not just in the United States, but also in Asia and the Pacific.
For Ma and other wealthy Chinese visiting New York or this side of the Pacific or Atlantic oceans, high-end boutiques and five-star hotels may well be everyday destinations. To a growing degree, that likely also holds true for members of China’s increasingly affluent middle class, let alone its richest citizens.
Yet, often removed from the region’s persistent poverty, more and more of China’s upwardly mobile, and others in Asia, would benefit from pondering the question: “Does inequality matter?” As for which Asian nation 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. 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. 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 – anecdotes abound in every nation underscoring 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 to understand that a divide exists between the haves and have nots, and between those with connections and those with none at all.
Even as a changing Asia helps drive the global economy, the region remains home to two-thirds of the world’s poor. According to the Asian Development Bank, an estimated 1.7 billion people still struggle on less than $2 a day in the region. Approximately 700 million live on less than US$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. Further, from the Bangladesh-Myanmar border to the island of Mindanao in the Philippines, 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. This is far from the images of a modern Shanghai or Jack’s Ma’s hometown of Hangzhou in China, or of a transforming Indonesia.
Certainly there is more to a nation, region, or market than its Gini coefficient. Asia’s leaders are justifiably proud in pointing to growing 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, civil society, and all citizens – one need not be a Rockefeller or a Ma – 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.
