The state of global inequalities is dire. Estimates suggest that the richest 10 per cent of the world’s population captures over 50 per cent of all income and currently owns 76 per cent of the world’s wealth. In terms of inequalities between countries, developing countries started off on an unequal footing after the colonial era, and they continue to be hampered by a global economy that drives extraction of natural resources and labour from the global south. While inequalities between countries have reduced significantly since the 1980s, they remain high, and estimates suggest that the trend might be turning back towards an increasing gap between rich and poor countries. Rather than serving to reduce inequalities, global tax rules contain clear biases in favour of global north countries, which undermine developing countries’ ability to tax wealthy individuals and multinational corporations. At the same time, loopholes continue to allow these actors to use tax havens to lower their effective tax payments. This, coupled with a global race to the bottom on corporate tax rates and other progressive policies, has led to a rise in regressive taxes, which place a disproportionate burden on the poorest and fuel further inequalities. However, a historic opportunity for change has opened up, as the United Nations has initiated an intergovernmental negotiation of a new Framework Convention on International Tax Cooperation, which is set to be finalised by 2027. With the mandate to establish “an international tax system for sustainable development”, as well as to develop commitments on the equitable taxation of multinational corporations and effective taxation of high-net worth individuals, this negotiation provides a much-needed beacon of hope in the fight against inequalities.

The examples of Indonesia and India serve as a stark reminder that inequalities within countries can constitute another – very serious – hindrance for the achievement of economic equality. Both countries have seen the formation of a super-wealthy elite, and the World Inequality Lab has estimated that the richest 1 per cent in Indonesia captures 18.3 per cent of income, while the figure in India is even higher, namely 22.6 per cent. The same elite also holds a very large share of the wealth in the two countries – namely 29.3 per cent in Indonesia and 40.1 per cent in India. Meanwhile, communities faced with discrimination must fight to overcome massive disadvantages. 

In Indonesia, women’s estimated earned income is just half that of men’s, and their labour-force participation rate remains as low as 53 per cent. One key reason is the stark differences in the amount of unpaid care work performed by women and men in Indonesia – a problem that is exacerbated by Indonesia’s relatively low level of public investment in care policies. The women that do participate in the labour market are more likely than men to work in the informal sector, which entails higher income instability and lower benefits, job security, and recognition.

In India, despite a very clear and explicit constitutional ban on caste-based discrimination, as well as numerous laws to address the problem, very significant challenges remain, and there are substantial mismatches between written words and the lived realities. The Dalit communities in India continue to be faced with severe disadvantages, including less access to education and discrimination when it comes to job opportunities. This problem is also clearly visible in the economic statistics, where Dalits remain overrepresented among the poorest segments of the population. This problem mirrors a larger international problem, where there is still no international legal framework against discrimination based on work and descent, despite the fact that this problem impacts millions of people worldwide. The situation for India’s safai karmachari communities, or people engaged in manual scavenging, constitutes an extreme example of the problems related to discrimination based on work and descent in India.

Our recommendations:

Fight economic inequalities within and between countries, and ensure fair taxation

• Ensure that the negotiation of a new UN Convention on International Tax Cooperation results in an agreement that serves to lower inequalities between and within countries.
• Tax the rich, not the poor. Ensure that tax systems are progressive, including through effective taxation of wealth.
• Make taxes work for women.
• Make multinational corporations pay their share.
• Reclaim public services – using public funds to fulfil people’s rights and needs. 

Promote gender equality in Indonesia

• Protect women’s economic rights.
• Recognise and support women’s initiatives.
• Carry out development initiatives responsibly, respectfully, and inclusively.
• Revoke the omnibus law on job creation.
• Protect human rights defenders and their role in fighting for economic justice.
• Support disaster survivors, including their economic recovery.
• Make taxes work for Indonesian women.

Address caste discrimination and end manual scavenging in India

• Adopt an international convention on discrimination based on work and descent.
• Make taxes work to the benefit of Dalits.
• Implement the laws and policies for the liberation and rehabilitations of persons affected by the caste-based atrocity of manual scavenging in both letter and spirit.
• Track and report reliable data on manual scavenging in India.
• Allocate and spend budgets.
• Abolish the contract system in sanitation work.
• Commit to a time-bound target to end manual scavenging deaths in sewer and septic tanks.

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