Greater Concentration and Relative Erosion of Wealth in the Arab Region: the Legacy of COVID-19?

The Arab region’s notoriously high inequality of wealth stands in stark contrast to the unrelenting poverty aggravated by the onslaught of COVID. In a global perspective, one-third of the 20 most unequal countries today are Arab countries. Since the pre-COVID times, one-half of the 16 countries with the highest increase in wealth inequality have been Arab countries. Despite the economic crisis precipitated by COVID, the Arab region’s economic elites have further increased their grip on the region's assets, both in terms of their share and in absolute value. Between mid-2019 and end-2020, while most economic groups in the region saw their holdings eroded, and those in the lower middle and the bottom of the wealth pyramid plainly backslided in terms of their holdings, a large number of individuals broke through the $1 million or higher wealth marks. The development has been unequalizing across all Arab subregions, but especially in the Gulf Cooperation Council and the low-income and conflict-affected Arab countries. Reducing this inequality and the associated vulnerability to poverty calls for assisting the poor in alleviating their socio-economic challenges, and working with the wealthy on putting their wealth to the best social use, in a sustainable and equitable way.