Tag Archives: inequality

World needs to spend another $100 trln on U.N. fight against global woes – report

By Simon Jessop

LONDON (Reuters) – Global goals tackling poverty, inequality, injustice and climate change face a $100 trillion funding shortfall and are likely to be missed unless 10% of global economic output is directed to the U.N. targets every year to 2030, a report on Friday said.

The U.N.’s Sustainable Development Goals set targets on everything from the environment to health and equality and have the support of all member states, yet the supply of finance from governments, investors, banks and companies to help meet them has consistently fallen short.

Hampered by the impact of the coronavirus pandemic, the annual shortfall is now up to $10 trillion a year, the landmark report by the United Nations and the Force for Good Initiative, backed by the finance industry, shared with Reuters showed.

“Humanity is at a crossroads. More than ever, all stakeholders must partner to ensure this crisis is the beginning of a new economics for sustainable development with prosperity for all,” said Chantal Line Carpentier, Chief, UN Conference on Trade and Development in the New York Office of the Secretary-General.

Adding the costs of financing the global transition to a low-carbon economy to limit global warming, and total funding out to 2050 comes in at $200-$220 trillion, the report added.

The SDGs are a global “to-do” list addressing such issues as war, hunger, land degradation, gender equality and climate.

While more than 1.1 billion people have been lifted out of extreme poverty since 1990, failure to accelerate efforts on the SDGs risked fueling conflict and crises, they said.

After a slow start, the world’s finance industry has begun to do more, with $9.5 trillion committed to 2030 and a record $2.1 trillion deployed in 2020. However there are imbalances in the way the money is being invested, the report said.

While climate change-related goals represented 20% of the funding gap, the theme was currently attracting 44% of the committed capital, the report said. By contrast, human, economic and social-related goals made up more than half of the funding gap but were taking in just 32% of current funding.

“The financial sector is playing a rapidly expanding role in financing the SDGs and the transition to a sustainable digital future,” said Ketan Patel, Chairman of Force for Good and CEO and Co-Founder of Greater Pacific Capital.

“However, with less than ten years to go, there is a pressing need to explore even bigger and more radical solutions than those being deployed today.”

Among other leading financial companies involved in the initiative include BlackRock, JPMorgan, Bridgewater Associates and Schroders, the report said.

(Reporting by Simon Jessop, Editing by William Maclean)

As NYC faces steep recovery, voters head to polls in mayoral election

By Joseph Ax

(Reuters) – Voters in New York City head to the polls on Tuesday to select Democratic and Republican nominees for mayor, following a campaign dominated by debate over public safety as the city recovers from the pandemic and confronts a surge in shootings.

The winner of the crowded Democratic contest, who may not be known until mid-July, will be a heavy favorite to succeed term-limited Mayor Bill de Blasio in November’s general election. Democratic registered voters outnumber Republican voters by more than a six-to-one ratio, state data shows.

The next mayor will be confronted with deep challenges including wealth inequality, police accountability, a lack of affordable housing and a struggling tourism industry in the country’s most populous city of about 8.2 million residents.

The leading Democratic contenders include Brooklyn Borough President Eric Adams, former presidential candidate and entrepreneur Andrew Yang, former sanitation chief Kathryn Garcia, civil rights lawyer and former MSNBC analyst Maya Wiley and City Comptroller Scott Stringer.

The election will be the first mayoral primary to use ranked-choice voting, in which voters rank up to five candidates in order of preference, adding a layer of uncertainty to the race.

Voters also will choose from eight Democratic candidates seeking to replace Manhattan District Attorney Cyrus Vance Jr., who is retiring. The nominee, who will be all but guaranteed to win November’s general election, would inherit Vance’s criminal probe into former President Donald Trump’s business empire.

Adams, a former police captain who put policing and crime at the center of his campaign, has led most recent polls, after months in which Yang appeared to be the front-runner. Garcia, who has run a technocratic campaign focused on her long experience in government, has risen in polls after securing the New York Times editorial board’s endorsement.

All three are considered more moderate and have called for increased police resources to combat rising crime.

Wiley, a liberal, has highlighted the protests against police violence last summer and proposed cutting $1 billion from the nearly $6 billion NYPD budget, redirecting the funding instead to other services, such as mental health counseling.

She has emerged as the preferred candidate for progressive groups, after Stringer lost numerous endorsements in the wake of two sexual misconduct allegations. He has denied any wrongdoing.

Almost all of the top candidates would make history: Adams as the city’s second Black mayor, Yang as the first Asian-American mayor, Garcia as the first female mayor and Wiley as the first Black female mayor.

DELAYED RESULTS

Polls close at 9 p.m. ET. Preliminary results showing voters’ first-choice votes are expected sometime after that, but barring a surprise outcome in which one candidates exceeds 50% of first-choice votes, the final results will likely take weeks.

The Board of Elections intends to announce the first round of results from its tabulation of in-person votes on June 29 and plans to release a second round that includes some absentee ballots a week later. Final results are expected the week of July 12, after the deadline for voters to fix, or “cure,” deficient ballots has passed.

The use of ranked-choice voting, which incentivizes candidates to ask their rivals’ supporters to rank them highly as well, prompted an unusual sight over the race’s final weekend: Yang and Garcia campaigned together on Saturday and Sunday in an apparent effort to blunt Adams’ rising momentum.

Yang encouraged his supporters to rank Garcia as their second choice; Garcia stopped short of doing so but offered praise for Yang’s campaign.

Adams’ campaign suggested the joint appearances were aimed at preventing “a person of color” from winning the race.

“I would tell Eric Adams that I’ve been Asian my entire life,” Yang responded when asked about the claim at a news conference. Adams later clarified that he was referring to Black and Latino candidates.

Wiley issued a statement criticizing Adams, though not by name, for his allegation, saying Yang and Garcia’s decision “is not racist.”

De Blasio, whose approval ratings have dropped in his second term, declined on Monday to say how he would rank the mayoral candidates on his ballot.

Noting it could take weeks for a clear winner to emerge, de Blasio said, “We’re going to have to exercise a little patience here, something we’re not particularly good at as New Yorkers.”

In the Republican election, Curtis Sliwa, the founder of the patrol group Guardian Angels, is running against Fernando Mateo, a businessman who created the “Toys for Guns” program in the 1990s.

(Reporting by Joseph Ax; Additional reporting by Peter Szekely; Editing by Colleen Jenkins and Aurora Ellis)

Coronavirus crisis in Latin America made worse by poverty, inequality, U.N. agency says

By Fabian Cambero

SANTIAGO (Reuters) – Latin America and the Caribbean countries in the throes of the coronavirus crisis will only see their problems made worse by festering inequality, poverty and an ailing social safety net, a United Nations agency said on Thursday.

The Economic Commission for Latin America and the Caribbean (ECLAC) said social unrest was on the rise across the region, a sign that immediate action was necessary to aid hard-hit countries struggling long before the pandemic hit.

“The effects of the coronavirus pandemic have spread to all areas of human life, altering the way we interact, paralyzing economies and generating profound changes in societies,” the report said.

Persistently high levels of inequality, the agency said, combined with a sprawling informal labor market that leaves workers without protection and a lack of effective health care coverage have made those problems worse.

Urban slums on the fringes of many of the region’s cities often lack access to basic services, mean many citizens found themselves unable to access food, water and healthcare necessary to confront the crisis.

Poverty meanwhile, has crept upward, while advances in reducing inequality have stagnated, exacerbating trends seen in the five years prior to the crisis.

During that period, Latin America and Caribbean economies grew an average of just 0.3% per year overall, while extreme poverty increased from 7.8% to 11.3% of the population and poverty, from 27.8% to 30.5%.

The report also said the prolonged closure of schools in the region could constitute a “generational catastrophe” that will only deepen inequality.

The pandemic has also brought a rise in mortality that could push down life expectancy in the region depending how long the crisis endures, the agency said.

There have been at least 21,699,000 reported infections and 687,000 reported deaths caused by the novel coronavirus in Latin America and the Caribbean so far.

​ Of every 100 infections last reported around the world, about 24 were reported from countries in Latin America and the Caribbean.

(Reporting by Fabian Cambero; Writing by Dave Sherwood; Editing by Angus MacSwan)

Most people want billionaires to pitch in to aid poverty and inequality

By Ellen Wulfhorst

NEW YORK (Thomson Reuters Foundation) – Eight out of 10 people think billionaires should help end poverty, inequality and a host of global ills, a poll showed on Wednesday, as funding shortages and the new coronavirus stymied hopes of meeting the United Nations’ development goals for 2030.

The ambitious plans, known as the Sustainable Development Goals (SDGs), were agreed unanimously by U.N. member states in 2015 with a list of targets to end hunger, gender inequality, and boost access to education and healthcare by 2030.

But researchers said there was now a shortfall of $400 billion a year to achieve those goals – with a financing gap of $350 billion in the 59 poorest countries alone – which would have global implications.

“Philanthropy can step in and plug huge critical gaps,” said Michael Sheldrick, chief policy officer at Global Citizen, an anti-poverty group, which surveyed almost 27,000 people in 25 countries together with Glocalities, a Dutch research agency.

“The COVID-19 is an example of that,” Sheldrick told the Thomson Reuters Foundation in an interview in New York.

“You’ve seen this upsurge in philanthropy, and our hope is that we can channel this into funding the SDGs more broadly.”

Organisations started by billionaires, such as the Bill & Melinda Gates Foundation and Facebook, have donated millions towards testing, protective gear and other campaigns to fight the COVID-19 pandemic. [nL1N2B24YT][nFWN2BH18Q]

Twitter’s Chief Executive Officer Jack Dorsey earlier this month pledged $1 billion to a charitable fund to help relief efforts related to the coronavirus pandemic, with money later to be directed to girls’ health and education. [nL4N2BV4KS]

Chinese billionaire and Alibaba co-founder Jack Ma pledged through his foundation to donate over 1 million coronavirus testing kits as well as masks, protective suits and ventilators to Africa.

WEALTH TAX OR PHILANTHROPY?

The poll found 82% of people said billionaires should help and contribute to funding the global goals.

On average there was more support for billionaires doing this through philanthropy, with 46% of respondents in favour of voluntary philanthropic donations, but 35% said they should pay a wealth tax to fund the sustainable development goals.

The countries most in favour of billionaires contributing to fund the SDGs were Indonesia, Vietnam and Portugal, while Japan, the Netherlands and the United States came last in the list of 25 countries.

The survey also found that people aged over 55 or aged 18 to 34 were more of the belief that billionaires should pitch in.

People with a higher education level were more in favour of billionaires playing a role, with 85% support, compared to 74% support from those with a lower education.

Experts have warned that the 2030 deadline to meet the U.N.’s development goals is at risk as economies suffer in the fight against the virus, public financing dries up and international cooperation wanes.

Around the world, there are more than 2,000 billionaires worth a combined $10 trillion, said Martijn Lampert, research director of Glocalities.

“People see that billionaires have a moral obligation to contribute,” he said. “This crisis shows the huge inequalities there are, and in the end I think every billionaire has to show his or her true color.”

The $350 billion shortfall, a calculation made prior to the pandemic, breaks down to about $200 per person in the 59 poorest countries, according to Global Citizen.

“We will need to tax high-net worth, especially after the current disaster,” said Jeffrey Sachs, head of the Sustainable Development Solutions Network, a U.N. initiative, who was involved in the study.

“Budgets everywhere are in disarray,” he said in emailed comments. “Inequality plus COVID-19 are leading to a profound social crisis.”

(Reporting by Ellen Wulfhorst, Editing by Katy Migiro and Belinda Goldsmith. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org)

Riot-hit Chile presses forward with social reforms

Riot-hit Chile presses forward with social reforms
By Dave Sherwood

SANTIAGO (Reuters) – Chile’s president and lawmakers prepared on Thursday to push forward social equality reforms after the easing of riots in the latest flashpoint of protests against South American leaders.

Center-right leader Sebastian Pinera was to ship a bill to Congress that would overturn a recent hike in electricity rates, one of several measures he hopes will turn the violent demonstrations into an “opportunity” for Chile..

Ecuador’s President Lenin Moreno also repealed the elimination of fuel subsidies this month after protests, while Bolivia’s Evo Morales faced demonstrations over an election, and Argentina’s Mauricio Macri has suffered a backlash over economic turmoil.

In Chile, anger over inequality and cost of living sent tens of thousands into the streets to demand an overhaul in one of the region’s traditionally most stable, and wealthy, nations.

Over five days of unrest that appeared to be dying down on Wednesday night, more than 6,000 people have been detained and at least 16 killed.

Pinera’s proposed reforms include a guaranteed minimum wage, a hike in state pensions and reductions in public transportation costs. Some, such as a bill to provide insurance against catastrophic illness, have already been delivered to lawmakers.

Octavio Solis, 43, an unemployed security guard, said he hoped the government acted quickly.

“We’re tired of all this, the protests, the looting. It’s a disaster. This isn’t the Santiago we once knew,” Solis said as he waited in line to receive an unemployment payment.

“We need good salaries and pensions for our elderly.

CITY LIFE

The capital city of about 6 million people awoke to relative calm on Thursday, as vendors peddling orange juice and fruit cups once again appeared on street corners.

Public markets reopened and thousands of commuters, dressed in work outfits and clutching coffees, made their way to work on the still hobbled underground transport system that has suffered more than $300 million worth of damage.

Trash, broken glass, graffiti and tear gas lingered in the aftermath of protests that went late into Wednesday evening, but ended peacefully.

Thousands of striking workers, including healthcare professionals and teachers, banged pots and carried banners past darkness in Santiago and other cities.

The marches were closely monitored by police and soldiers.

The unrest has included arson attacks and looting. At least 18 people died, according to one official count. Chilean prosecutors have since clarified that two of the total died in a car accident unrelated to the riots.

(Reporting by Dave Sherwood; Editing by Andrew Cawthorne)

Powerhouse U.S. cities home to worst wage inequality

Powerhouse U.S. cities home to worst wage inequality
By Jonnelle Marte

(Reuters) – Wage inequality has soared in many of the United States’ biggest cities over the past 35 years as companies cluster in urban centers, driving big paychecks for in-demand workers, according to a report by the New York Federal Reserve

At the same time, a broad swath of Americans in the very same cities is being left behind, with wage increases for low- to middle-wage employees failing to keep pace with the dramatic gains by high-end workers.

Cities such as New York, Houston and San Francisco have moved to near the top of the rankings in recent years in terms of wage inequality, the report by economists Jaison Abel and Richard Deitz released on Monday found.

In San Francisco, inflation-adjusted wages for workers in the top 5% of wage earners grew by 120% between 1980 and 2015, while wages for the bottom 10% of earners grew by just 20%.

In New York City, wages grew by 110% for the top 5% of workers, but just 15% for the bottom 10%, according to the report.

Economic inequality has been rising across the United States as globalization and automation eliminate some middle-income jobs and highly skilled workers in technology, finance and other sectors win higher wage premiums.

The changes are making city life more challenging for lower wage workers, who are struggling to keep up with rising housing costs and other bills.

“For people in these lower paid occupations, it’s less appealing,” said Nick Bunker, an economist at Indeed Hire Lab. “There are fewer opportunities.”

UNEQUAL GROWTH

Cities with “sluggish economies” tended to have weaker wage gains for all workers, but also lower levels of inequality than larger cities, the researchers found.

This is especially true in cities where the main industries are struggling financially, like Detroit, where automation and auto plant closures have led to job losses.

While areas such as the thriving tech sector in the San Francisco-San Jose region have moved up the rankings, some cities with the most or least inequality in 1980 were still marked by extremes 35 years later.

Fairfield, Connecticut, about 50 miles northeast of New York City and home to General Electric’s headquarters from the 1970s until 2016, had the starkest wage gap between rich and poor in both 1980 and in 2015.

The disparity, however, has become more dramatic. In 1980, a Fairfield resident with earnings in the top 10% made nearly six times as much as a neighbor in the bottom 10%. By 2015, those on the high end earned nine times as much.

Bakersfield and Santa Cruz in California also had persistently high levels of inequality, the report found.

At the other end of the spectrum, cities such as Erie, Pennsylvania, Utica-Rome, New York, and Sheboygan, Wisconsin, had some of the lowest levels of inequality.

Lower wage workers have less leverage than they did in previous generations because unions are weaker now, said Josh Bivens, research director for the Economic Policy Institute. Long periods of high unemployment have also limited workers’ ability to push for better pay, he said.

“In the last 30 years, lots of those things that provided wage growth for low- and moderate-wage workers have been stripped away,” Bivens said.

Recent trends in the labor market may provide some relief,he said. Some states and cities have approved minimum wage increases in the past couple of years, while a tight labor market has also helped to create better opportunities for some low and middle wage workers.

But those improvements are likely not enough to close the gap, Bivens said.

(Reporting by Jonnelle Marte; Editing by Heather Timmons and Richard Pullin)

Murders in Mexico surge to record in first half of 2019

FILE PHOTO: People stand near bullet casings on the ground at a crime scene after a shootout in the municipality of Tuzamapan, in the Mexican state of Veracruz, Mexico, May 16, 2019. REUTERS/Yahir Ceballos/File Photo

MEXICO CITY (Reuters) – Murders in Mexico jumped in the first half of the year to the highest on record, according to official data, underscoring the vast challenges President Andres Manuel Lopez Obrador faces in reducing violence in the cartel-ravaged country.

There were 14,603 murders from January to June, versus the 13,985 homicides registered in the first six months of 2018, according to data posted over the weekend on the website of Mexico’s national public security office.

Mexico is on course to surpass the 29,111 murders of last year, an all-time high.

For years Mexico has struggled with violence as consecutive governments battled brutal drug cartels, often by taking out their leaders. That has resulted in the fragmentation of gangs and increasingly vicious internecine fighting.

Veteran leftist Lopez Obrador, who took office in December, has blamed the economic policies of previous administrations for exacerbating the violence and said his government was targeting the issue by rooting out corruption and inequality in Mexico.

“Social policies are very important – we agree they’ll have positive effects. But these positive effects will be seen in the long term,” said Francisco Rivas, director of the National Citizen Observatory, a civil group that monitors justice and security in Mexico.

The complexity of fighting criminal groups is a major test for Lopez Obrador’s young administration, which has vowed to try a different approach than that of his predecessor.

His administration last month launched a new militarized National Guard police force tasked with helping to fix the problem.

(Reporting by Anthony Esposito; Additional reporting by Rebekah F Ward; Editing by Dan Grebler)

Mexico leftist vows no tolerance on corruption after historic win

By Dave Graham

MEXICO CITY (Reuters) – Mexico’s new president Andres Manuel Lopez Obrador said he would pursue friend and foe alike in a crackdown on corruption after voters handed him a powerful mandate for government with a landslide election victory on Sunday.

Lopez Obrador, the first leftist president since the end of one-party rule in 2000, won between 53 and 53.8 percent of votes, according to a quick count by the electoral authority, more than double the total for his nearest rival.

That would be the biggest share of the vote since the early 1980s, and would give Lopez Obrador a strong platform both to address Mexico’s internal problems and face external challenges like the threat of a trade war with the United States.

Going into Monday it was unclear whether Lopez Obrador had done enough to secure the first outright majority in Congress in over 20 years, with pollsters’ early estimates suggesting he was close in the lower house but farther away in the Senate.

Speaking to reporters after his win, Lopez Obrador identified corruption as the “principal cause” of inequality and the criminal violence that has bedeviled Mexico for years, and said he would spare no one in his commitment to root it out.

“Whoever it is will be punished, I include comrades, officials, friends and family members,” the 64-year-old said. “A good judge begins at home.”

The election was a crushing defeat for the ruling centrist Institutional Revolutionary Party, or PRI, which governed Mexico from 1929-2000 continually and again from 2012.

Public anger over corruption scandals, which have shattered the PRI’s credibility, was a defining feature of the campaign, alongside nationwide discontent over soaring levels of violence and years of lackluster economic growth.

Lopez Obrador, a former Mexico City mayor, was greeted with rapturous cheers by supporters in the capital’s Zocalo central square around midnight, while friends celebrated in his tiny hometown of Tepetitan, in the poor southern state of Tabasco.

The victory was a vindication for Lopez Obrador, who was written off by many critics after narrowly failing to capture the presidency at his first bid in 2006.

Then, he cried fraud and declared himself the rightful winner, but alienated many supporters with huge street protests that brought much of the capital to a standstill for weeks.

He also began campaigning relentlessly around Mexico with the message that he alone could fix the country’s problems, calling out his opponents as corrupt and inept.

Finishing second again in 2012, he remained the most visible opposition leader and by this year had become the focal point of public frustration with the establishment’s shortcomings.

Once results showed his margin of victory on Sunday, and mindful of accusations that his instincts cleave toward authoritarianism, Lopez Obrador quickly sought to calm nerves about his presidency. He pledged to pursue responsible economic policies, respect private property and guarantee individual liberties.

And he paid tribute to the role in the campaign played by outgoing President Enrique Pena Nieto and the media, both of which have felt the bite of his scorn in the past.

Mexican presidents are limited by law to a single term.

Lopez Obrador will take office in December facing a U.S. government that has been openly antagonistic to Mexico over trade and migration under President Donald Trump.

The newly elected president has said he wants to make Mexico more economically independent of the United States. At the same time, he also hopes to persuade Trump to help develop Mexico and Central America in order to contain illegal migration.

Andrew Selee, president of the Migration Policy Institute in Washington, saw a change from past Mexican leaders who were “obsessed” about being on good terms with the United States

“It means that the U.S. can’t take Mexico for granted any more,” he said. “Lopez Obrador will be pragmatic … but he’s not going to bend over backwards to have a good relationship.”

(Reporting by Dave Graham; Additional reporting by Julia Love, Christine Murray, Anthony Esposito, Berengere Sim and Delphine Schrank; Editing by Frank Jack Daniel and Catherine Evans)

CEO’s get 335 times what average worker makes

The Empire State Building's spire is shrouded in clouds in Manhattan, New York, U.S., May 3, 2016.

By Ross Kerber

BOSTON (Reuters) – Chief executive officers of S&P 500 companies on average made 335 times more money than the average rank-and-file worker last year, down from a multiple of 373 in 2014, according to a union study released on Tuesday.

The figures released annually by the AFL-CIO, the largest U.S. federation of labor unions, are likely to gain attention. Pay disparities, which have persisted despite a steady American economy that has reduced the joblessness rate to around 5 percent and raised wages somewhat, have fueled political debate.

The average production and non-supervisory worker made around $36,900 last year, up from roughly $36,000 in 2014, according to a statement from the AFL-CIO.

Meanwhile the average CEO of an S&P 500 company made $12.4 million last year, down from $13.5 million in 2014. An AFL-CIO spokeswoman said the lower average CEO compensation figure reflected how for many the present value of future pension benefits declined.

Union leaders said the figures showed how pay decisions do not favor the average worker. “The income inequality that exists in this country is a disgrace,” AFL-CIO President Richard Trumka said in a statement. “We must stop Wall Street CEOs from continuing to profit on the backs of working people.”

The high levels of executive pay have drawn criticism from both Democrat Hillary Clinton and Republican Donald Trump in the current U.S. presidential campaign.

Nonetheless, top shareholders have overwhelmingly supported management on executive compensation decisions, according to the advisory “say on pay” votes most public companies hold annually.

Starting in 2017, the U.S. Securities and Exchange Commission will require public companies to disclose the ratio of the pay of their CEO to the median compensation of their employees.

(Reporting by Ross Kerber; Editing by Lisa Von Ahn)

Global Wealth inequality is becoming a risk

A general view of the low-income neighborhood known as Boca la Caja next to the business district in Panama City

OXFORD, England (Thomson Reuters Foundation) – Growing global wealth inequality is becoming a fundamental risk to democracy and to economies around the world as more people feel government rules “rigged” in favor of the rich leave them with few options, investors and governance experts said Friday.

“It’s very dangerous,” said Ngaire Woods, dean of the Blavatnik School of Government at the University of Oxford. “If people can’t aspire to succeed within the system, they will aspire … outside the system, in ways that break the system.”

That frustration is feeding into everything from the contentious U.S. presidential race to growing dissatisfaction over the amount of aid money that lands in the hands of rich-nation consultants rather than reaching the poor, experts said at the Skoll World Forum on Social Entrepreneurship in Oxford.

In the United States, for example, “trickle down” economic policies that support tax cuts for the rich with the aim of boosting economic growth and jobs have led to a $2 trillion annual redistribution of wealth from the bottom 99 percent of earners to the top 1 percent over the last 30 years, said Nick Hanauer, a former venture capitalist and now head of Civic Ventures, which aims to drive social change.

If the trend continues, by 2030, the top 1 percent of Americans will earn 37 to 40 percent of the country’s income, with the bottom 50 percent getting just 6 percent, he said.

“That’s not a capitalist market economy anymore,” he warned. “That’s a feudalist system and it scares … me.”

Globally, half of the world’s wealth is now held by just 1 percent of the world’s population, according to a 2015 report by Credit Suisse, a financial services company.

That trend toward greater inequality – driven in part by tax policies and shifts such as the growing power of corporate lobbyists in the United States – is leading to the increasing belief that political systems can no longer deliver results for many people, said Darren Walker, president of the U.S.-based Ford Foundation.

Many people feel that “the political apparatus of democracy is corrupted” and the result is “dissatisfaction by huge swathes of the population about the potential of democracy to deliver anything of value and meaning to their lives,” he said.

SUITCASE OF MONEY

It is also putting the United States in an odd spot when it comes to enforcing anti-corruption rules overseas, including in the aid business, he said.

U.S. aid groups ask, “Can we really trust Africans to spend this money in the way Congress has appropriated?” Walker said. “People say, ‘Poor you, you have to bring a suitcase of money when doing things in Africa.'”

“But we have the same thing in the United States – but you don’t have to bring a suitcase. You bring a check. And you get the same effect. You give it to the officials’ fundraiser and say, ‘By the way, I need you to do this for me,'” he said.

“It’s no different (except) it’s legal,” he added. “We need to (see) our own culpability in this inequality.”

Aid agencies and social enterprises – businesses that strive for social good as well as profits – also are part of the problem when huge sums of money they spend on bringing people out of poverty in poor countries end up in the pockets of rich-world consultants, the experts said.

Donors “make a lot of fuss holding us to account on the money we get,” Woods recalled a frustrated representative of an Indonesian organization saying. “But for every dollar we get, 80 cents stays in the beltway (around Washington DC),” she said.

Many organizations – including USAID – are now trying to improve that percentage, delegates at the Skoll Forum said. But progress in helping aid recipient countries build their own systems to take care of their own problems has been slow.

BUILDING CAPACITY

The goal of giving “capacity building grants”, Walker said, should be to make sure “you don’t need to go back to Africa. So there is a rich, robust civil society there. That’s the vision, and we’re a long way from it.”

Investing more in civil society groups in poor countries, rather than just U.N. organizations, is one way of bringing change, said Degan Ali, the executive director of Adeso, a local charity working in Somalia and the Horn of Africa.

Reversing growing inequality will depend largely on revamping government policies and making rules fairer, changes that often need to be driven by public pressure, panelists said.

Those might include everything from ensuring that civil servants don’t change with each election to eliminating private schools to drive funding into improving state-run schools, the panelists and audience members said.

Woods noted that her own university education in New Zealand was funded by taxes. “That opportunity is one we’re all agreed is open to far too few people today. We have to think about why,” she said.

(Reporting by Laurie Goering; editing by Ros Russell:; Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, climate change, women’s rights, trafficking and property rights. Visit http://news.trust.org/climate)