Well, thank you very much for this very kind applause and for the excellent introduction. I'm of course, the first question people would ask me — first, I'm delighted to be in Copenhagen, and people would ask me, is it your first time? And I say no, it is not my first time. I think it's probably my fourth or fifth time. I was here in summer, I was here in the fall, and I'm also happy to be here in the middle of winter. Albeit, it's nicer in the summer, as you know.
So today's talk, as you can see from the title, and of course that's the reason why you came, is going to be about inequality. Inequality itself is such an abstract topic in some sense, because we really every time have to define what we mean by inequality. And you can actually look at inequality between races, genders, countries, individuals, groups. So every time you have to actually define which type of inequality you want to look at and why it matters, and maybe why it doesn't matter, and so forth. So I will speak today, because that's mostly what I do, I will speak about global inequality.
Now, the definition — I know it may be a little bit boring — but the definition of global inequality and income inequality is technically, it's inequality in income which is defined on an annual basis, like all the money that you get from working, from having property, from getting social transfers, and all of you know, from the government, deducting the taxes that you pay — that inequality across all individuals in the world. Now, obviously, neither I nor anybody has the data for 8 billion people. What we do, the best that we can, is to take the data, whether it is surveys or fiscal data, from individual countries — they're technically unbiased samples — and then you put them all together.
And then on top of that you have to compare them across the countries, and there are two ways to compare them. One way is simply to take the incomes and convert them into an international currency, normally US dollar. But the problem with that, as you would know in Denmark quite well, is that richer countries tend to have higher price levels. Certainly the food that you go — if you want to take rice or potato, or even the services that you have in Denmark are more expensive than if you go to India. So we have to adjust for that difference as well, so that $1 in India would actually buy you more than $1 in Denmark.
After all these adjustments we get something that we call global income inequality or global income distribution, which then may be more or less equal, and I will talk about that today. So that's for the definition. I think it's important to mention that because it is not wealth inequality, of which you read, for example, when you read in Davos that Elon Musk has, I don't know, $400 billion. It's not that inequality, it's inequality in income that people have received.
Now I want to start, and I don't do that often because I'm not a huge fan of asking tricky or politically incorrect questions from the audience, but I want to start with two questions that seem relatively simple, but I think at the end of the talk maybe we would actually think of them slightly differently. The first question I would like everybody who agrees with that to just raise their hand. The first question is: do you think that a world where the differences in mean country incomes — meaning for example GDP or gross domestic product per capita — between countries would be much smaller than they are today? To explain that, it means that if the difference between Morocco and France, or between Nigeria and Denmark, or between Mexico and the United States on average would be smaller. So who would agree that that world would be preferable to the world that exists today?
I would say the majority of people who would disagree, probably very few. If I were to extend that one step further, and that's the second question: would a world where actually differences between individuals would be much less than they are today? So that is actually one step further, because now we are not only asking that different countries become more similar to each other in terms of income, we are asking an additional thing, that differences between individuals become much less than they are today. And who would agree with that? I think maybe even a higher majority than who would disagree, actually. And we have one, one, two, so I would come back to that.
And so this would be the sort of questions that you deal with when you talk about global inequality. There is yet another question of which I will not ask anybody to answer yes or no, but it's a question that you can ask yourself: do you believe that if you really wish global inequality to be less, do you believe that what is more important is to work on reducing inequality within countries — so for example reducing inequality in Denmark, reducing inequality in the United States, reducing inequality in China — or is it more important to reduce inequalities between the countries that I mentioned before, between China and the US, Morocco and France, and so forth?
So this is just simply a question you can ask yourself, because political activism very often depends on what you first perceive to be more important and obviously where you believe that you might have more influence. But you will see maybe during the talk that these two things sometimes do not work together. So in other words, sometimes you have to have a trade-off between inequality within countries and inequality between countries.
So having said that, let us look very broadly: what can we say today about inequality in the world, global inequality, over the last 200 years? It's a big question and I will not go into the lots of the assumptions that we have to make, especially for the 19th century inequality. But on this graph, what you see on the horizontal axis is time, obviously, on the vertical axis is a measure of inequality. So it's a measure of inequality meaning if this measure goes up, the world at the individual level, calculated the way that I mentioned in the beginning, that world is becoming more unequal.
So what you see with this blue line that starts actually in 1820, the blue line keeps on going up and up throughout the 19th century. So the world was getting more unequal in the 19th century. You say, what? First, how do we know? That's actually a very difficult story because it's really based on quite a lot of estimates and even in some cases guesses about inequalities within countries, and actually for many countries they didn't even exist. So you actually have to look at inequality within a geographical area, not necessarily a country.
But the main reason behind that, and I will show you more numbers in the second slide, is that Western Europe, North America, and later Japan became much richer, and India and China and Africa stayed at the same level or even went down. And as a rule of thumb, when you think about global inequality, it is in the simplest possible way, it is good to think of three parts of the world: the West, India, and China. What is the relationship in their income levels in the 19th century? The differences increased, and that was really the main force behind the rising of inequality in the 19th century.
You know, economic historians call it also the Great Divergence, in the sense that Western incomes became much higher and incomes in India and China were stagnant, or actually in the case of China even went down. Then you have the second era where we already have micro data, and the micro data start with that red line, which is the late second part of the 20th century. So these data are better. The red data there, the dots are much closer to each other, which means that we have it for more years, and they're technically much better because they're based on observable incomes, the way that I explained in the very beginning.
So there you see the 20th century really is a very high plateau. This number, the so-called Gini coefficient, is a very high number, around — in this case around 70. That's not the number that you would find in any individual country. Even South Africa, which is very unequal, or Colombia, will not go to that level of inequality. So we have had a very sort of long period, maybe almost a whole century, of that very, very, very high inequality.
Now the interesting part starts now. What happens in this last period that you can see there, where the red dots start going down? Global inequality shrinks. And you say to yourself, like, why am I here listening about inequality and I'm concerned about inequality and this guy is telling me that global inequality is getting less now? And the reason why it's getting less is because Asia, countries that used to be poor, and especially China and later India, Vietnam, Thailand, Indonesia, have grown at rates which are beyond the rates of the Western countries or the advanced rich countries.
And that meant that lots of people who used to be poor have now moved into something that you can call vaguely global middle class, and they have reduced inequality. So that was really what was happening in the maybe last decade of the 20th century and the first two decades of the 21st. And that unfortunately — and I will come to that towards the end of the talk — that unfortunately that period might come to an end now or in the years to come.
And you can see that even on this graph, the red dots, the red dot does not really continue going down anymore. We don't know what will happen, but there is a possibility that we might move to the fourth era where actually the red dots might go up and inequality might increase as well.
But what was behind that? And it's a complicated graph with also the years on the horizontal axis, but this graph breaks down this global inequality into two parts, the two parts that I already mentioned and talked about. The blue part is the part due to the differences between countries, and the red part is the part due to the differences within countries. You know, it's the same story. And to give you maybe a more intuitive feeling what is the blue and what is the red, think of the European Union.
The European Union, if you take the whole European Union, which is like almost half a billion people, can be decomposed into inequality between countries, where you have countries that are much richer, significantly richer than the others, let's say Denmark or the Netherlands versus Bulgaria and Romania, and the differences in inequality within countries. So the same story can be told at the level of the world.
And there you see what I already mentioned. So I will go quickly over this. You see that the blue bar is rising throughout the 19th century, meaning that the differences between countries — of course adjusted for population, because it does not make sense if we work with individuals not to adjust for the population. Clearly, China matters more than Chad in global income distribution. And you see this blue bar going up and up and up, as I was explaining before.
The red bar also goes up. So the 19th century is interesting because inequality between countries went up and inequality within countries went up. So if you want to sort of call it, it's the age of colonialism, which was driven by differences in incomes between countries, and the age of class struggle, which is driven by differences in income within countries. And I'll skip the 20th century, where you can see more or less stable high inequality, with the red part now shrinking because of the revolutions, for example, in Russia or China, welfare state in the West. So the red part is shrinking.
And I will move directly to the most recent part. Now, the most recent part, not surprisingly, if you just remember what we talked about five minutes ago, the blue part now shrinks because of high growth rates in Asia, particularly in China. The red part now becomes larger because within each of these countries, from South Africa all the way to, you know, China or India or the United States or Sweden, which actually saw a very large increase of inequality, the within-national inequalities increased.
So how do we compare today's period with the period of the Industrial Revolution in the 19th century? In those days you had both parts of global inequality — between countries and within countries — going up. Today, and probably that's the reason many of you are here, the within parts have generally increased over the last 20 or 30 years, and the between parts have shrunk. So the two parts of global inequality are working — which is actually good for the world — are working to some extent against, not to some extent, largely against each other.
Between inequalities are shrinking, and to some extent, maybe you can say unfortunately, within-national inequalities are becoming wider. So that's the story behind today's world compared to the world of the 20th century and the world of the 19th century.
And that has given us this distribution that you can see here in a thick line, that is 2018. The 2023 data that I have are not really fully sort of — they don't include as many countries as I wish they would. And when you compare that distribution with the distribution which is 1988, and this is all really based on fairly good data, certainly when we compare that with the past, you notice that this distribution today is much more symmetrical.
What is on the horizontal axis is income. So if you look at this distribution, it just seems that there are lots of people in the middle, and it's much more symmetrical than the distribution that you can see on your left, which is for 1988. And why is that the case? Because in 1988 you had really lots of bunching of people, poor people in poor countries, on the left side of the axis where incomes are very low. You have many fewer now because many of them have moved up the income distribution.
Now I'm not saying — and that should not be taken as the middle class in the Western sense, because the Western implication of the middle class is way much higher than what we talk here. As I sometimes call it, the median global class. It's simply people who are in the middle, but whose incomes by Western standards are really not very high, because we are talking about incomes on an annual basis between $4 and $9 or $10,000.
So we are not talking about, on a per capita basis, about very high incomes in the sense of the rich countries, but within the world there are many more people who are now in the middle than there were only 30 years ago. So this is this big change that has occurred, and I think it's a historical change that has occurred in the world since probably 1980, late 1980s.
Because the late 1980s are a crucial period, not only because of the fall of communism in Eastern Europe, but because of the rise of China and because of also the rise of India, which started with economic reforms in the 1990s. So these are the big sort of, you can say, benchmark years that happened in the late 1980s, early 1990s.
And this is simply a different way of looking at that, because here I'm looking at GDP per capita, not at incomes as I defined them originally at the individual level. But these GDPs also give you a good indicator of what is happening. And here what you notice, from about the 1980s or 1990s, you really see this very significant decline in inequality measured only by the between-country component. But you see this worrying sign at the very end, which is 2022, 2023, you see this line no longer going down.
And I will talk about that. This line doesn't go down anymore, and that's the danger of this fourth era of global inequality, essentially, because China is no longer the engine of global inequality reduction, because it has become sufficiently rich that simple growth in China is not going to drive global inequality down. And on the other hand, Africa has not converged in any sense towards the incomes of the middle-income countries nor of the rich countries.
And I will come at the end of the talk also to say a few more words about Africa, because it's really an important topic, especially in light of the fact that the population growth in the world in this century is going to take place essentially in Africa.
So what has now happened is something that I call the greatest reshuffling of individual incomes since the Industrial Revolution. So what does it mean, what I mean by the great reshuffling? What it means at the level of nation states, a very big change in where is the center of gravity of economic activity and what is the overall income of the countries. I will come in a moment again to the incomes of individuals, because that's really the objective of this talk.
But if you look at the level of countries, what you have — I'll start with the one on the left on the top, which is most important and which is relatively well known. China, as a total GDP, as a total national income, has overtaken the United States in 2015. That was calculating that GDP, as I was explaining before, by using international prices, by using US dollars. China is still below the US in total, but when you use international prices, you're basically saying China is producing more goods and services valued at the same prices than the US. So that overtake took place in 2015.
Then the other three graphs are: one about India, that's also on the top, India and the UK. What was interesting there, that the total GDP of India and the United Kingdom was about the same in 1980, but the UK now has a total income which is one quarter of total Indian income. So it's a major change, as you can see. And the same thing, I have the Netherlands and Indonesia, and then I have France and Vietnam.
So essentially what you see is that the Western countries, their share in total global GDP has declined, and Asian countries, their share of global GDP have gone up. Okay, so we know that, we can read it in the papers every day. But what does it mean at an individual level? That obviously gets reflected at an individual level, and this is what I meant by the reshuffling of relative income positions.
So not only did people from the countries that used to be poor move up the income distribution and reduce this global inequality, but in some cases they have overtaken in the global income distribution people from the rich countries. So let me give you maybe the most dramatic example of that, which is Italy.
So first I start on your left-hand side with the position of Chinese deciles. The deciles are 10% of the population ranked from the poorest to the richest. So it goes from left to right on the horizontal axis. The people who are the poorest are this C1, the people who are the richest are this C10 on the horizontal axis. What you have on the vertical axis is their position in the global income distribution.
Now since China has become richer at every point of the distribution, these people have become placed more highly than they used to be. So to give a simple example, if you take the top 10% of the Chinese urban population, they used to be around the 70th decile globally — I'm sorry, 70th percentile. 70, you know, that's pretty high, but you still have one third of your distribution, actually 30% of the distribution above you.
Nowadays they're at the 90th, I think 92nd, 93rd global percentile. So this is the movement upward. It doesn't surprise anybody because everybody knows that China has become richer, people in China have become richer, people have to move up in the global income distribution.
What is interesting, and it's politically important, is if somebody goes up — well, and I have a ranking — well, somebody has to go down. I have a ranking that I assigned to everybody: you are number one, you two or three or four. But if somebody becomes — I was number four, but somebody now becomes number four and overtakes me, I have to go to number three.
And Italy is a very good example because it has not really grown in the last 20 to 25 years. And the bottom part of the income distribution — now the whole story of Italy is very similarly drawn to China. You have from the lowest decile to the top decile, the bottom part of the income distribution, the bottom 30 to 40% of the people have gone down significantly in global ranking.
And I know that it might come as a question during the Q&A, you can ask, like, why do I care where I'm globally ranked? Because really people don't know, people don't even know where they're ranked within their own country, much less where they're ranked in the world. But there may be some reasons that you would gradually realize that you cannot purchase some internationally priced goods anymore, because somebody else would be doing that, and actually the price would not be affordable to you. So that ranking does implicitly matter.
And as I said, you may not feel it at a given moment, but gradually you would feel it. You would know if you're in the top decile and top global percentile, or if you're no longer there.
Now, interesting thing for Italy and many Western countries — I'll go very quickly over some of them — is that this is, for example, Germany on the left. Also the bottom has gone down, but as you notice, for the rest not much of a change, and certainly not much of a change at the top. So in other words, the people in the middle of the rich countries' distributions and people at the top in Germany were not really very much affected by what you might call the China effect, because their position is still very high.
You know, you see here, I think actually the next country that I have here is Korea, which basically you have, like for many rich countries, the same effect: the bottom goes down, the top, in the case of Korea, actually goes even higher. And notice one thing which then happens within a country. For example, Korea is a good example of that: the spread of your positions is now much greater than it used to be, because the bottom of your country has been overtaken by somebody else, so that bottom now shifts down in rankings, and the top is either the same or actually in the case of Korea it has improved.
So the gap in positions becomes kind of similar to maybe the gap of positions that you would expect in Latin American countries. It's not at the same level, but I'm just saying the differences are greater than they used to be.
And then the interesting countries here are Poland and Brazil. Now look at Poland. Poland is a prime example of a successful transition country, the only, I think, country in Europe which did not have a decline in GDP per capita since I think 1992. So it was growth every year, and Poland has done extremely well.
And then look at the rankings. The red line is the rankings now, and the blue line, like in the other graphs, was the ranking in 1988. What happened is that paradoxically, at first sight, the bottom part of Polish income distribution also went down. And why did the bottom go down? Simply because many people in China or India or Indonesia grew faster, and they overtook that bottom of Poland. And the top of Poland went up, and consequently it also widened the gap within Poland in terms of rankings.
And finally, let's look at Brazil, which is also interesting and very intuitive. For Brazil, at the bottom nothing happened, because people who were at the bottom in Brazil, they were also largely at the bottom in the world. So nothing happened for them. They were the poor among the poorest in the past, they are among the poorest now. People who were at the top, they were top 1% before, and they're top 1% or top 5% now, so nothing happened for them either.
But interestingly, in the case of Brazil, the shift from the blue line to the red line happened in the middle of the income distribution. So the bottom line is that essentially what I call the China effect — which is really sort of a broad simplification, but it's not only wrong — that China effect is different depending at what level of income is the country.
For the rich countries, the China effect was at the bottom part of rich countries' distributions. For countries like Brazil, the China effect is in the middle of their distribution, because neither the top nor the bottom were affected by China. And for countries like South Korea, which actually grew reasonably fast, the effect, as you have seen, is on the bottom, and the top has even improved their position.
So this is what I think is extremely important to realize, that when we talk about global inequality, we have two levels to consider. We have to consider the level of inequalities between the countries, which has all kinds of then geopolitical implications, with the obvious implication being the positions of China and the United States. And then we have to look at what it means, it's translated into individual income levels.
Now these individual income levels in rich countries might have an impact on the political situation within the countries. So that's, I think, the story gets, I believe, sort of wrapped up in some sense, that the geographical change in the distribution of economic activity between the West and Asia has two sorts of consequences.
One is a geopolitical consequence of competition between countries and great powers. Simply when countries become richer, they feel more powerful, they are technologically more similar, and they compete. I want to quote Adam Smith in a second for that. And the second effect is on personal positions, and these personal positions might have an impact on internal domestic politics.
And what I said I would like to quote Adam Smith — unfortunately I don't have this quote here, it's a fairly long paragraph which is almost never cited, but it's a very important paragraph. It says the following. He talks about inequalities between the countries, because he was observing inequality where obviously England was a very powerful country and Europeans were generally powerful, and of course he was among the early writers who noticed how poor China was.
And then he said maybe trade and interchange would gradually make the countries that are now much poorer and militarily and technologically inferior to Europe — maybe that would make them richer and more powerful, and maybe equality of powers would result in world peace, which current inequality in power is not allowing us to achieve.
So he saw inequality of power — he said it much better than I did, by the way — but he saw inequality in economic and military power to be conducive to war, and equality, which might come through trade and interaction, to be essentially a balance of power, equality, which would lead to peace.
So you see there that these sort of rather abstract ideas about inequality between the countries, inequalities between individuals, have very concrete applications, both in political science or international relations or inequality studies.
Now what I want to finish the presentation with is a sort of a look about the future. Now we are in a very special time. I think I know that every time they always say that it's very special, so maybe we should be more careful about that. But I do believe that projections about the future are very difficult for the reasons that I'm just going to mention now, and which I don't think applied even 10 years ago.
The first one is still the lingering effect. First, COVID by itself has produced many commotions in the global income distribution, including for example the fact that India had one negative growth of minus 10%, that was reversed.
Well, take another example: the US, with large social spending which was about 15% of GDP, had a dramatic decline in inequality in that one year, 2020. So as I said to my liberal friends in the US, if you want to really make them angry, you say that the largest decline in US inequality in the last 70 years was achieved in the last year of Trump's presidency. It's a fact.
Now was it Trump who did the transfers? No, it was the Congress. But of course when we attribute things, we attribute to the president who is sitting in the White House. And of course things got reversed then in 2021, 2022, when the transfers did not exist anymore, inequality went back to where it was in 2019. But that effect of COVID was very significant at many levels, including as I mentioned between countries and within countries.
Then we have really new sort of shocks, and the shocks that would most likely continue in the years or decades to come. The shock of the trade tensions and relations between China and the US, and it's a very significant shock, not only for these two countries, it's also a significant shock for the world.
And one can actually argue, without being too cynical still, one can argue that it could be seen by the American policymakers as a lose-lose proposition, that both countries would lose, but if they believe that China would lose more than the US, they might actually engage in that policy. And that is also the policy that makes objections and thoughts about global inequality very difficult. China might grow at 4% or 5%, or China might grow at 2%. So that of course would make a change for global poverty reduction, it would make a change for global inequality as well.
Then the third effect is something that we obviously see in Europe on a daily basis, is the war between Russia and Ukraine. That has many impacts, not only on these two countries, but it has impacts on Europe, it has impact on the rest of the world because of the increased food prices, energy prices. And as you know, the prices of these essential goods affect poor people more than the rich people, and they increase also inequality in consumption and to some extent maybe in income as well.
And we don't know what will happen with that war, so we don't know whether it would continue, whether the effects will continue or not, maybe get worse. And then we have also the war nowadays in Gaza and the Middle East. So we have all these shocks which I believe are totally unpredictable, and their effects are unpredictable too, and each of them does have a possibility of basically invalidating whatever projections we make about the future.
But some things are possible to sort of say after making an adjustment or qualification for all these four unpredictable things. And they are: the first is that China, by becoming a relatively rich upper-middle-income country according to the World Bank definition, is no longer the engine of global inequality reduction.
I've given this talk or a version of this talk in China to students, and I've done it during COVID on the internet, and many people in China take it as a given that the growth of China not only is good for China, it's good for the world, and of course it's good for global reduction of inequality. But it's no longer true, because nowadays China, as I said, has become a middle-income, upper-middle-income country.
And if China grows fast, okay, it would reduce inequality with respect to Europe and to the US, but it would increase inequality with respect to African countries. So the China effect overall is close to zero for global inequality, and actually might add to global inequality.
Well, if that's the case, then we move to the parts of the world that are still poor and where high growth rates should be helpful for global inequality. In other words, to reduce global inequality, and there we have India and Africa. So now I'm coming back to the point that I made before, the importance of African countries growing at fast rates in order to replicate maybe what was the Asian experience of the latter part of the 20th century and first part of the 21st century, of catching up.
Now it is good, I think actually, if you go back to the original questions, it is good for the world in principle as a whole, it would be good also for the reduction of inequalities between individuals. But when we look at the record of African countries since 1960, that record is pretty bad.
If you simply ask the following question, which is relatively simple: how many countries have had periods of five years of growth which is 5% per person, which is good growth, not something incredible but fairly good, you know, if you can maintain it for five years? And you find relatively few actually. These are the countries that are listed there, and if you look at their names, with the exception of Ethiopia, you don't have any other large country.
And remember that actually what matters is population. So Equatorial Guinea growing because of oil for five years at 5% is not the same as Sudan not growing or Congo not growing or Egypt not growing, simply because the population is very different.
And when you compare that with the record — and I will not go over all that because this is a long table, doesn't matter — but when you simply compare with the Asian record, it's vastly different. You have practically, as you can see here, a dozen countries with very large periods, like sometimes 13, 15 years of very high growth rates, and that was the so-called Asian Miracle.
Now the economists are not pretty good in forecasting miracles, and of course I like to use Myrdal's book, which was called The Asian Drama, that was written in the 1960s, with the fear that a great increase of population in Asia would really make it impossible for Asian countries to technologically advance and to grow.
Well, it so happened that the very opposite happened. Actually, Asian countries, and China in particular, grew quite fast. They did actually control population growth, as you know, in China through the one-child policy, but they really did a remarkable thing in the economic history of the world: growing at such a high rate over a sustained period of 40 years, and for so many people.
Would Africa do that? And that of course is questionable, but I think it's the big key question of the 21st century, because all these unpredictable events that I said are big questions, but we cannot, as economists, say whether the war in Ukraine will end tomorrow or not, we cannot say what will happen with Gaza, we cannot say what will happen with the US and China. But we can say that these two trends — of China not being a factor in global inequality reduction, and African convergence — are really long-term factors that are crucial for this century.
And so I will wrap up with going back to the original question. Most of the people, I would say 95%, agreed with the first question, that it is good that the income gaps between the countries shrink and be reduced. And I of course also believe that. But we have to think what does it mean.
It means, as I was saying before, that some large countries like China would become also politically much more important players than they used to be, and that equality, which we think is super desirable, might be a generator of geopolitical conflict.
So you see here how I would — I said it recently — it's like the opposite of Bernard Mandeville, who claimed that private vices are public virtue in some sense, the invisible hand. You are greedy and want more money, but you have to supply somebody to whom you're selling your bread with good bread, and then he will become — you will become rich only if you supply a service or a good that somebody wants to buy.
So you have private vice which is greed, and you have a public virtue: increase in income, in this case global inequality reduction, is sort of public virtue, but the political effects of that might be very different from what we sort of think at first sight.
And the second thing is the second question, which was the reduction of differences between people in the world. It's also very desirable, and we had maybe 99% agreement on that. But that means also that parts of the distribution of the rich countries would slip down in the global ordering.
That would mean, to be very concrete, that maybe a metal worker from Germany would no longer be able to afford four weeks of vacation in Thailand that he used to have. That means that actually the global positions would shift, and that may be something that people who lose out might not like, and that may be something that leads to political turbulence within the countries where the voice matters, because they cannot actually necessarily have a voice at the global level.
And finally, to answer the third question, which was really something that by now I think should become clear, is this ambivalence between working on reducing inequality within nation states and working on reducing inequality between the countries.
And the latter leads to a sort of paradoxical answer in the sense that if this is really your key concern — reduction of inequalities between nations, which would translate into reduction of inequality between individuals — then economic growth becomes absolutely key. Without economic growth we would not have had the Chinese experience, we would not have had Asia becoming much richer, we would not have had India, and we of course hope that actually does happen in Africa.
So a talk which I started with on inequality does also become a talk about growth, and I think it is very wrong to believe that inequality and growth are sort of opposite to each other. I believe that very often lower inequality within countries is a condition for fast growth, and that fast growth in poor countries is a condition for the reduction of global income inequality. I'll stop here. Thank you.
