The World Trade Organization (WTO) recognizes that not all countries and all members of society benefit from trade and economic development. Nevertheless, according to the 2024 World Trade Report, global trade has contributed to poverty reduction in many countries.
In 2020, inequality was as high as it was in 1910
Referring to the 2022 World Inequality Report, the WTO found that in absolute terms, global income inequality is now virtually as high as it was a century ago. In 1910, the richest 10% of the world’s population had an income 41 times that of the poorest 50%. In 2020, it was 38 times higher.
According to the WTO, global trade offers opportunities, but it must be accompanied by social measures and international cooperation. What is needed is training and additional education opportunities, unemployment benefits, competitive policies to lower prices, reliable infrastructure, and well-functioning financial markets.
Turning the Financial Crisis and Corona Pandemic
According to the WTO, the gap in per capita income between countries has narrowed over the past 30 years. This has been paralleled by the greater integration of poor countries into global trade. On average, per capita income in low- and middle-income countries has tripled between 1995 and 2023, adjusted for inflation, while the global average has grown by only 65%. Development has slowed since the 2007/2008 financial crisis, and has been reversed again by the COVID pandemic.
Between 1996 and 2021, the 40 low- and middle-income countries per capita in Africa, Latin America, and the Middle East barely participated in positive developments. In particular, they had little international trade and attracted little foreign investment, exporting raw materials instead of processed products.
In total, the World Bank classifies about 130 low- and middle-income countries, including China. Germany is in the high-income group.
By international standards, China is one of the middle-income countries. (Archive image) Photo: No Credit/CHINATOPIX/dpa
