We recently compiled a report on the 30 Countries with Highest Gini Coefficient and in this article we will look at the country with the highest wealth inequality.
Inequality among the Top 10% and Bottom 50% Population
According to the World Inequality Report 2022, the global inequalities in income among the richest 10% and bottom 50% population have increased over the last two decades, while global inequalities between countries have declined. The gap between the average incomes of the richest 10% of countries and the poorest 50% of countries plunged over 50x to a little less than 40x. On the contrary, inequalities between the top 10% and the bottom 50% population soared significantly within countries. The gap between the average incomes of the top 10% and the bottom 50% of the population within countries has nearly doubled from 8.5x to 15x over the past two decades.
In 2021, an average adult individual was earning around $23,380 per year and owned around $102,600. The top 10% of individuals in the world currently receive 52% of the global income against a mere 8.5% earned by the bottom 50% of the individuals. Out of the total global income distributed, the average income earned by the top 10% of individuals was around $122,100 per year in 2021. Whereas, the bottom 50% of individuals were earning just around $3,920 per year in 2021.
Inflation has skyrocketed over the past two years. As per the IMF forecast, the global inflation rate in 2021 averaged around 4.7%, 8.8% in 2022, and 6.5% in 2023. In 2024, the average inflation rate is expected to be around 4.1%. Although the inflation rate is declining compared to the past couple of years, consumer index prices are still high. Moreover, the interest rates around the world are at record highs. The IMF has projected the global economy to improve at a rate of 3.2% in 2024 and 3.3% in 2025.
With the global economic distress, global inequalities in income and wealth have massively affected the poorest countries in the world. Inequality varies vastly between the most equal region and the most unequal. In Europe, a more stable region with high-income countries, the top 10% income share is around 36%, compared to the most unequal region, MENA, where the top 10% income share reaches 58%.
The global wealth inequalities are more prominent compared to income inequalities. The bottom 50% of the individuals hardly have any sort of wealth, possessing just 2% of the total global wealth. In comparison, the richest 10% of people own 76% of all global wealth. To understand these figures, the poorest half of the population owns around $4,100 per adult compared to $771,300 owned by the average top 10%.
A Top Company Working on Poverty Reduction
Nestlé (OTC:NSRGY) is one of the leading multinational corporations that operates as a processing giant entity in the food and beverages industry. The company is helping various initiatives to reduce poverty and improve the livelihoods of people by providing job opportunities. Nestlé (OTC:NSRGY), a Swiss-based MNC, is working in collaboration with the UN Sustainable Development Goals (SDGs) to eradicate issues such as inequality, poverty, climate change, and many other global issues.
Around 27 million people are subject to forced labor around the world, mainly in unregulated industries dependent on large-scale employees, such as agriculture. Nestlé (OTC:NSRGY) is working on the potential risks of forced labor in multiple agricultural supply chains through new programs focused on forced labor indicators such as unethical recruitment practices. The company is training relevant employees and staff on forced labor risks. In 2020, Nestlé partnered with Verité to introduce a new framework for labor rights in palm oil which is planned to run through to 2025. In addition, the company is also supporting over 10 million young people in giving access to economic opportunities by 2030, through its income accelerator program in cocoa production. Nestlé (OTC:NSRGY) offers compensation of up to €500 annually to the households of the families taking part in the Income Accelerator Programme. The company is assisting vulnerable labor along with improving its production capabilities. Nestlé has been able to increase its cocoa production by 20% from one hectare of land, since the implementation of the Income Accelerator Programme.
The company’s management expects its organic sales to grow by 4% in 2024 after a slightly off first quarter of 2024. Moreover, the management pointed out during the Q1 earnings to improve its underlying ESP (constant currency) to increase between 6% and 10% in 2024. With a diversified product portfolio and global presence, Nestlé (OTC:NSRGY) is exploring new opportunities in developing countries, which account for nearly 40% of its turnover. In the recent earnings of Q2 2024, the company reported results in-line with its projected growth during Q1. Nestlé (OTC:NSRGY) mentioned that its organic sales are almost back to pre-supply constraint levels and they are starting to retake market share. Here are some of the comments from the Q2 2024 earnings call:
“Given how the environment has unfolded, we consider it prudent to amend our guidance for the full year. We now expect organic sales growth of at least 3% and the underlying earnings per share in constant currency to increase at a mid-single-digit rate, in line with consensus. We are keeping our underlying trading operating profit margin guidance unchanged, with a moderate increase expected. We always said that 2024 was the transition back to RIG-led growth, and that is exactly what is happening. We have one of the most attractive portfolios in the global food and beverage industry. It is positioned to perform in any environment. Our RIG-led growth strategy continues to be the right one for these times and it is working.”
Nestlé (OTC:NSRGY) is working on various initiatives to fight against income inequality. However, many countries are facing huge gaps in wealth equality. With that said, let’s take a look at the country with the highest Gini coefficient.
Our Methodology
To gather the list of countries with the highest Gini coefficient, we used the Gini coefficient data from Credit Suisse’s Global Wealth Databook 2022. The Gini coefficient describes income inequality or wealth distribution. A Gini coefficient of 0 represents perfect equality and a Gini coefficient of 100 means perfect inequality. The countries with highest Gini coefficients are ranked in ascending order of their Gini coefficients.
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The Country with Highest Gini Coefficient
Brunei
Gini Coefficient: 89.7%
Brunei is a small country on the island of Borneo, surrounded by Malaysia and the South China Sea. The country had an average income of almost €71,237 in 2023. The income share of the top 1%, top 10%, and bottom 50% in the country was around 12.4%, 18.6%, and 36.4% in 2022, respectively. The wealth disparity between the top 1%, the top 10%, and the bottom 50% was higher compared to the income inequality. The wealth share of the top 1% and top 10% was 23.9% and 57.7%, while it was a mere 4.9% for the bottom 50% in 2022. Brunei has a total population of around 452,520 and an unemployment rate of 5.2%.
With a Gini coefficient of 89.7%, Brunei ranks first among the countries with highest Gini coefficient. If you want to know about other countries with high Gini coefficient, you can check our report on the 30 Countries with Highest Gini Coefficient.
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