Developing countries usually look to their GDP for their economic growth but impressive statistics do not necessarily show the true picture of economies. Various surveys and reports have already highlighted the deep divide that exists across the globe.
The Global Inequality Report released in this regard has once again drawn the attention of policy makers to broader equality, according to which income inequality, gender inequality, pollution and the responsibility for carbon emissions in the world.Inequality and wealth inequality in countries is at the top. The above report shows that 50% of the world’s population owns only 2.0% of its wealth. While the top 10 percent of the population occupies 76 percent. The same is the case with income, according to which 50 percent are taking 8.5 percent of the income and 10 percent are taking 2.0 percent.
As far as gender is concerned women make up 35 percent of the global labor force while men make up 55 percent and 48 percent of carbon emissions are produced by the richest 10 percent of people or countries on the planet.
The report shows that colonialism contributed to the onset of this inequality with social costs. Levels of inequality fell between 1910 and 1980 as the world introduced progressive taxation and other measures aimed at reducing inequality but it seems that all the progress has been reversed.
About which Islam has expressed its concerns for fifteen hundred years that the survival of the world is not in the concentration of wealth, but in its distribution, runs the opposite of capitalism. Due to which human problems are arising. If the Islamic model is followed all over the world many problems can be solved. The report also states that 2020 was the year of the Covid-19 pandemic after which the world returned to where it was in 1910.
The World Bank which imposes its policies on poor countries and is unable to solve the world’s problems. The case of Pakistan shows how financial institutions exert pressure on developing countries. When it comes to low-income countries, the IMF recommends that they turn to privatization to pay off debts and raise interest rates to slow down the economy.
Which in turn affects the economic condition of ordinary citizens. It has become worse but when it comes to developed countries the policies are completely opposite. Even in America alarm bells ring when policymakers talk about canceling student loans. But when it comes to bailing out banks authorities rush to their aid. This situation is such that it forces us all to think about how the weak economies are being subjugated through duplicitous policies. The report states that the so-called trickle-down effect that we hear so much about does not exist in the real world.
Thanks to these global policies, poverty has greatly increased and wealth has gone into the hands of the few who get the bulk of it.
So instead of indirect taxes only more progressive taxation that focuses on taxing the rich can bring some positive changes. Policymakers around the world should take steps aimed at saving the world from the situation it finds itself in including increasing spending on social welfare and filling the gaps.
Through these initiatives, governments around the world can change the situation and make the world a better place for the entire population.
Especially in countries like Pakistan there is a need for governments and international organizations to come up with such policies through which minimum burden can be placed on the common man. IF the above world bodies’ fails to implement such a program then the economic situation of under develop countries would be more verse then the present.
So it is the need of the time that world economic institutions should support the underdeveloped counties.
