Beirut, 5 December 2024--The United Nations Economic and Social Commission for Western Asia (ESCWA) has released a new policy brief revealing a significant rise in wealth inequality across the Arab region over the past two decades. Despite household wealth holdings growing faster than the global average, the gap between the rich and those living in poverty has widened markedly, particularly since the Arab uprisings of 2011. The brief, titled "Unequal Trends in Wealth Accumulation in the Arab Region", highlights the divergent wealth accumulation trends among low-, middle-, and high-income countries in the region.
Diverging Wealth Paths
From 2000 to 2010, the average wealth of residents in the Arab region grew at an annual rate of 8.4%, outpacing the global average of 5.9%. Low-income countries (LICs) experienced the fastest growth during this period, suggesting a trend toward wealth convergence. However, from 2010 to 2022, this trend reversed dramatically. While middle-income countries (MICs) and high-income countries (HICs) continued to see wealth growth-albeit at a slower pace-LICs saw a decline in personal wealth, dropping from $5,100 in 2010 to $3,200 in 2022.
"The widening wealth gap is alarming," said Mr. Khalid Abou Ismail, Senior Economic Affairs Officer at ESCWA, "Low-income countries are not just falling behind their regional neighbors but are also lagging on a global scale. This divergence threatens social cohesion and economic stability."
The wealth disparity between HICs and LICs has grown significantly. In 2022, average wealth in HICs was 31 times higher than in LICs in the Arab region.
Concentration of Wealth
The report also highlights an increasing concentration of wealth within countries. In LICs, the share of national wealth held by the richest 10% rose from 55% in 2000 to 64 % in 2022. In MICs, this share increased from around 58% to 62 %. Conversely, HICs experienced a decrease in wealth concentration among the top 10%, from 74.7% to 69.6%.
At the same time, the wealth share of the bottom 50% of the population in LICs declined from 10.7% in 2000 to just 7.6% in 2022. These trends indicate that wealth is becoming increasingly concentrated among the rich, especially in low-income countries, exacerbating inequality and undermining poverty reduction efforts.
A Call for Comprehensive Policy Action
To address these growing disparities, the brief calls for a multifaceted policy approach aimed at promoting equitable wealth distribution and fostering inclusive economic growth. Key recommendations include enhancing wealth accumulation opportunities for low- and middle-income households by improving access to financial services and wealth-building initiatives. Implementing progressive taxation on high-value assets and large wealth transfers can generate revenue to fund programmes supporting disadvantaged groups. Emphasizing regional cooperation, the brief also calls for harmonizing tax policies and improving transparency through mandatory wealth reporting.
"Addressing wealth inequality is not just a moral imperative but also essential for the Arab region's economic recovery and sustainable growth," asserted Mr. Abou Ismail. "We need coordinated efforts to implement these policies, especially in low-income and conflict-affected countries."
The brief underscores that enabling economic recovery and inclusive growth, particularly in LICs, is the top regional priority. This requires ushering in lasting peace, implementing reforms for economic and political stability, and strengthening governance.
