RIO DE JANEIRO — Nestled between mountains and a pristine lake, Évian-les-Bains, the French town where G7 leaders are gathering this month, evokes an image of stability and prosperity. Yet beyond the summit venue lies a world marked by deepening economic insecurity, political fragmentation, climate change, and distrust in institutions. And at the center of these interconnected crises is a challenge that governments continue to treat as an afterthought: rising inequality.
This G7 summit puts “global imbalances” at the top of its agenda, with French President Emmanuel Macron warning that the international economy is becoming a theater of confrontation rather than cooperation. But if G7 leaders are serious about addressing that problem, they must tackle inequality head-on.
That means abandoning the mistaken view that inequality is primarily a problem for developing countries. Extreme disparities in income, wealth, opportunity, and political influence have become a defining feature of the global economy, affecting rich and poor countries alike. In OECD countries, the wealthiest 10 percent of households hold roughly half of all household wealth, while the bottom 40 percent hold around 4 percent. From stagnant living standards, declining social mobility, and political polarization to growing skepticism toward democratic institutions, the consequences are increasingly visible across the G7 itself.
The question facing G7 leaders, then, is not whether inequality matters, but whether they are willing to recognize it as the systemic problem it has become. Last year, the Extraordinary Committee on Inequality, established under South Africa’s G20 presidency and chaired by Joseph E. Stiglitz and Jayati Ghosh, concluded that the world faces an “inequality emergency.” Among its findings were that one-quarter of people worldwide experience moderate or severe food insecurity; and that the richest 1% of humanity captured 41% of all new wealth created globally since 2000, while the bottom half captured just 1%.
These figures show that inequality is increasingly shaping the rules of the entire economy. For G7 governments, this should raise serious concerns about the priorities they claim to champion.
Consider economic growth. For decades, policymakers assumed that even concentrated wealth would drive investment and innovation. Yet growing evidence suggests that when large shares of national income flow to those already at the top, consumption slows and business dynamism suffers.
Rising inequality also has become a powerful source of political instability in advanced economies, as frustration with stagnant wages, food prices, housing insecurity, and declining public services fuels anti-establishment sentiment. When a small number of corporations and billionaires control an outsize share of economic resources, they gain disproportionate political influence through lobbying, campaign financing, media ownership, algorithmic manipulation, and privileged access to decision-makers. Public policy then becomes more skewed toward serving moneyed interests, reinforcing the perception that the political system is rigged.
For the G7, which portrays itself as a defender of democratic values, this trend should be alarming. Democracy becomes harder to sustain when citizens believe that political influence can be bought and economic outcomes are predetermined.
The rapid development of AI has added a new dimension to this challenge. AI has enormous potential to drive innovation, productivity, and scientific progress. But without deliberate policy choices, its economic benefits may become concentrated among a small number of firms and countries, potentially at the expense of many workers and communities. Ensuring that AI contributes to broad-based prosperity, rather than reinforcing existing inequalities, should be a top priority.
Inequality also complicates another G7 priority: managing geopolitical competition. The French presidency has correctly identified the erosion of international cooperation as a major challenge. But geopolitical tensions cannot be separated from global disparities. Developing countries are expected to invest in climate-change mitigation and adaptation while carrying unsustainable debt burdens and enduring rising borrowing costs. Yet because the benefits of globalization remain so unevenly distributed, resentment toward existing international institutions is growing, and geopolitical fragmentation is accelerating.
Source: Korea Times News
