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. While the global average is 0.7, countries such as Chad, Niger and the Central African Republic have the lowest indices of 0.39 and 0.4 respectively.
There are also large inequalities within countries, i.e. between individuals. The internationally accepted Gini coefficient measures income inequality in an area, whereby 0% represents absolute equality and 100% total inequality. According to this, income inequality is particularly high in South Africa, Namibia, Suriname and Zambia. South Africa had a Gini index of 63% in 2014 (last survey), while the global average is 38%.
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. According to the latest , the wealth of the world's five richest billionaires has more than doubled since the beginning of this decade, while 60% of humanity has become poorer. The coronavirus pandemic will play a decisive role in increasing income inequality, as will the Russian war of aggression against Ukraine, but also external shocks such as natural disasters, economic crises or armed conflicts.
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 , growing 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.
Reducing inequalities worldwide and improving the living conditions of all, especially the poor, remains a key priority for KfW. It therefore 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, people with disabilities or women and children. The investments promoted by KfW are not intended to intensify inequality, but to alleviate and mitigate it as far as possible.
Many 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.