The opportunities for a good life are different for each person, depending in part on where they were born. Living conditions vary between countries and within a country. Inequality can be described in many different ways and there are several statistical methods to measure inequality.
For example, the Human Development Index (HDI) measures a country's average scores in basic areas of human development. The index takes into account life expectancy, education and average income.
There are also large inequalities within countries. According to the World Bank, income inequality is particularly high in South Africa, Namibia and Botswana. South Africa had a Gini index of 63% in 2014 (last survey). The internationally accepted Gini coefficient measures income inequality in an area, where 0% represents absolute equality and 100% total inequality. A GINI value of 100 would mean that a single person had all the income in the region in question.
Trends always depend on the particular indicators and data that are used. But one thing can be said for certain: the world continues to have high levels of inequality. The impact of the coronavirus pandemic on income inequality around the world has not yet been fully assessed, but it is estimated to have significantly widened inequality within and between countries. The gap between rich and poor is likely to widen.
Inequality – like poverty – has many dimensions and is not measured solely in terms of income. However, access to education and health services, for example, as well as opportunities for personal development and influence on society, often depend heavily on income. Furthermore, a high level of inequality in the distribution of opportunities and income can lead to social upheaval and ultimately conflict. According to the United Nations Global Sustainable Development Report 2019, growing income inequality is therefore also one of the greatest challenges for sustainable development.
SDG 10 aims to reduce inequality within and between countries – both in terms of income and opportunities, political rights and economic participation. KfW supports this goal through various approaches.
KfW accounts for the impact on disadvantaged groups in all projects. When planning a new project, consideration is always given to the implications it will have for indigenous peoples and for women and children. The aim is to ensure that the projects promoted by KfW do not intensify inequality, but rather alleviate and mitigate it as far as possible.
Many of its projects also directly target disadvantaged groups, for example in the health or education sector, in climate change adaptation or in terms of financial inclusion. In 2022, its new commitments contributing to the achievement of SDG 10 were a good EUR 2.2 billion. Reducing inequalities worldwide and improving the living conditions of all, especially the poor, remains a key priority for KfW.