Davos 2012: Tackling inequality 'a priority'

Former yachtswoman Dame Ellen MacArthur wants the world leaders to adopt a '"circular economy" approach

Growing inequality should now be the priority for leaders after the economic crisis, senior economic figures at the World Economic Forum have said.

They insisted that more needed to be done to tackle excessive pay, poverty and unemployment.

The discussion, hosted by BBC World in the Swiss ski resort of Davos, was held as figures showed almost half of young Spanish people are out of work.

Economist Nouriel Roubini warned inequality threatened social stability.

"We are in a very fragile world," said the economist, dubbed Doctor Doom because of his predictions leading up to the 2008 financial crisis.

"The issue of distorted pay is not being addressed, banks that were deemed too big to fail now becoming even bigger," he said.

Amnesty International told the BBC World session, Rethinking Capitalism, that people were concerned about the lack of accountability.

"The view from the street is that what we have seen is corporate greed, the financial sector getting away with [it]," said its secretary general Salil Shetty.

Start Quote

They are beginning to lose faith with the politicians and global economic forces that were meant to transform their lives”

End Quote Sheela Patel Slum Dwellers International

"Where is the accountability? Many of the people who caused the crisis are walking around here at the World Economic Forum."

He also warned that the situation was moving from "a financial crisis to a human rights crisis" and could get worse.

"The crisis response that is being proposed is to cut further and the poorest and most vulnerable sections are going to be further hit by the response."

Cost of capitalism

The problem of growing inequality has emerged as one of the key issues at the annual gathering of business and political leaders.

UN secretary general Ban Ki-moon told a press conference that sustainable development was a priority for both the developed and developing worlds.

Ban Ki-moon: Social inequality must be addressed

"First, we have to do all to save our planet, to revitalise our economy, to address all the social injustices, social inequality.

"We have seen Occupy Wall Street, Occupy all of Europe, whatever. That is why I'm urging that we need to invest in sustainable development. That is why the UN takes sustainable development as tough priority in addressing these issues.

The head of the international economic organisation, the OECD, was also critical of the response of leaders so far and said delays in getting the crisis under control were extremely damaging.

"We are in danger of frustrating a whole generation," Angel Gurria said.

"I am optimistic that we know what the solutions are... I am less optimistic that we are making the right decisions to put them in place," he said.

Howard Buffett, grandson of the famous investor, asked the panel: "Capitalism is the greatest driver for wealth creation, but at what cost?"

In response, Mr Gurria warned that inequalities were growing, and said the answer was economic growth that was "stronger, cleaner and fairer".

Sheela Patel from Slum Dwellers International said the discussion about the future direction of the economic model "would mean nothing" to the people she represents.

"They are beginning to lose faith with the politicians and global economic forces that were meant to transform their lives," she told the panel.

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