The world wealth gap has grown post-pandemic — but where has it been worst?

The gap between high-income and low-income countries is growing — reversing a two-decade trend of progress that in 2020, came to a screeching halt. That’s according to data released by the United Nations Development Programme in its latest Human Development Index, or HDI, a report that tracks progress by assessing life expectancy, education levels, and income. This year’s findings showed a gridlock of progress in the wake of the COVID-19 pandemic. “Despite our deeply interconnected global societies, we are falling short,” said Achim Steiner, head of UNDP, in a press release. “This gridlock carries a significant human toll.” All 38 member countries of the Organisation for Economic Co-operation and Development, which between them represent about 80% of the world’s trade and investment, reported higher human development index scores compared to pre-pandemic levels. Eighteen of the world’s lowest-income countries have not, with those such as Afghanistan being knocked back by an entire decade, the report found. “All developing regions have not met their anticipated HDI levels based on the trend before 2019,” the press release stated. “It appears they have shifted to a lower HDI trajectory, indicating potential permanent setbacks in future human development progress.” UNDP predicts that this gap will continue widening in the years ahead. In 2022, the report found high-income countries reached record-high levels of human development — and in 2023, the agency predicts those figures will elevate further. The gap has been brought into particularly sharp relief in Latin America, a region that for decades has been a place of contrasts. There are wealth gaps, with the highest decile of earners making, on average, 12 times more than the poorest. The falling trust in democracy — and the fact that though Latin America is the third-most democratic region worldwide, less than half of its population has faith in the democratic process. The gender disparities: Despite overall progress on gender equity, Latin America has the second-highest adolescent pregnancy rate in the world. “Latin America was the region with the greatest, steepest decline in human development due to the pandemic,” said Michelle Muschett, United Nations assistant secretary-general and director of UNDP’s regional bureau for Latin America and the Caribbean. “At the same time, we’re the region in which the recovery has been one of the greatest, though we haven’t yet reached pre-pandemic levels. This is telling us that the way we advance human development in the region is not resilient enough.” Twelve countries in the region have been able to recover to their pre-pandemic levels, Muschett said, while 21 have not. And even in cases like Chile, which has the highest development index in the region — 44 out of 193 — inequalities remain when you drill into the details. For Muschett, three major challenges in Latin America and the Caribbean have jumped to the forefront. The first, she said, was inequality in the region, and the uneven economic, social, and societal recovery from the pandemic. The second was political polarization — and that only one in five people in Latin America and the Caribbean expressed trust in their governments. The third was what Muschett called a democracy paradox: Though nine in 10 Latin Americans valued democracy, increasingly, more people were becoming dissatisfied with the institution. “This is a result of complex phenomena that move from the very personal, and even psychological and emotional, side of how we as a region and world are coping with our realities after a shock such as the pandemic,” said Muschett. “But it also links to the fact that our systems haven’t been effective enough to address those social demands and the quality of the public services that our system is delivering.” The situation is not unique to the region. Across the world, UNDP noted similar trends — and warned about the development implications of eroding democratic institutions. Populist governments have lower growth rates, the report stated. Fifteen years after a populist government assumed office, UNDP found, countries’ gross domestic product per capita was 10% lower than it would have been under a non-populist government. Despite that, over half of global survey respondents expressed support for leaders that undermined democracy, the report found, while over two-thirds felt they had “little influence” on their government’s decisions. “As policymakers and decision-makers, how can we ensure we deal simultaneously with structural challenges while coping with the emerging risks and crises that we’re also facing as a region?” Muschett asked. “If we collectively ignite discussions and reflections around what this report is trying to put out there, we might be able to find ways to cooperate in a polarized world.”