More than $70tn (£53tn) of inherited wealth is set to pass between generations over the next decade, widening global inequality and posing a threat to democracy, a panel of economists and campaigners has warned. The report, commissioned by South African President Cyril Ramaphosa ahead of the G20 meetings in Johannesburg, calls for the establishment of a permanent monitoring body similar to the UN Intergovernmental Panel on Climate Change to address the growing gap between rich and poor.
The Nobel prize-winning economist Joseph Stiglitz, who chaired the independent expert panel, said inequality is rising in over 80% of the world's countries. The report found that 83% of nations, accounting for 90% of the global population, meet the World Bank's definition of high inequality. Countries with high inequality are seven times more likely to experience democratic decline than more equal nations, according to the analysis.
Ramaphosa described inequality as 'a betrayal of people's dignity, an impediment to inclusive growth and a threat to democracy itself.' While stopping short of endorsing the proposed panel, he said the report provides 'prudent and pragmatic steps' to reduce inequality. The G20, established after the 2008 financial crisis, includes Saudi Arabia, Mexico, South Africa and the UK.
The report highlights that between 2000 and 2024, the world's top 1% captured 41% of all new wealth, while only 1% went to the bottom 50%. A study by Italian economist Salvatore Morelli suggests that up to $70tn will be inherited by 2035, with compound interest and weak inheritance taxes perpetuating the cycle. Stiglitz warned that widening inequality undermines democratic institutions and fuels populism.
