POVERTY PROJECT: Measuring Inequality, How Asia Stacks Up

AUSTIN SZABO WRITES: When you want to know the economics of a country, you usually look at its gross domestic product — the amount of wealth it produced over the course of a year. But GDP tells only part of the story; it leaves out how the wealth is distributed.

Income inequality has become a focus of social movements like Occupy Wall Street and even of the first Jesuit Pope, Francis. And a new statistical index helps wealth watchers quantify it. The so-called Gini coefficient looks at how bunched up a nation’s fortunes are. The more egalitarian, the lower the coefficient between rich and poor. The index ranges between zero and 1, with a zero representing perfectly equal wealth distribution.

While countries like China and the United States usually come out on top in GDP terms, on the Gini their performance is less impressive (0.421 and 0.408 respectively, making them 108th and 96th in the world.) Better results can be found in Thailand, Laos, and India, where average Gini is 0.367.

Measuring the Gini of countries written about on this site gives us a surprising new ranking of which societies are best at distributing wealth. For example, Singapore, a country  frequently cited as an example of economic miracle, is ranked lower than nearly all the other countries on Asia Media at a shocking 0.425. At the top of the list are Japan (ranked second) and Pakistan, with 0.245 and 0.3 respectively. Averaging all the Asia Media countries leads to an approximate score of 0.37, which is slightly better than the world median of 0.387.

As we research income inequality in Asia, traditional measures of wealth must be questioned. New statistical studies reduce the importance of GDP and stock market performances while adding to the importance of equality and social harmony. The book Spirit Level claims that low crime, good health, better education, and balanced public budgets can all come from a more egalitarian society.

Using income inequality as a measure of success will force us to question Singapore’s success, while examining how much, if anything, is being done to curb inequality in Malaysia and the Philippines. In the coming weeks, we will examine media institutions in Asia and determine how they are, or if they are, discussing issues of poverty and inequality. By advocating for more socially responsible reporting of other media outlets, we hope to play a part in reversing the most troubling statistic found in our research: the slow but steady rise of inequality worldwide.

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