Opinion | Fallen world must ensure justice for future generations

Coming back from an extended conference on “Gross National Happiness” in Bhutan, one of the world’s first carbon-negative countries, I became aware that intergenerational justice may be one of the most important moral questions we face today. The world is drowning in debt. According to the International Monetary Fund (IMF), global debt amounted to US$250 trillion in 2023, or 237 per cent of GDP, with global private debt at more than US$150 trillion.

Meanwhile, worldwide net private wealth stood at US$454.4 trillion in 2022. If global private wealth is so much larger than global debt, is the latter actually a problem? It is if the world’s wealth is distributed unevenly. Around 1 per cent of the world’s adult population controlled US$208.3 trillion in 2022, or 45.8 per cent of the global total.

Wealth is only getting more concentrated as the rich get richer. So even while GDP is rising and stock markets are hitting record highs, many people are still unhappy because they are being left behind. Wealth is passed down from generation to generation, but with the gradual dismantling of inheritance tax in many countries and expanded tax cuts for the rich, such as in the United States, wealth has been retained in wealthy hands.

The UBS Global Wealth Report 2025 forecast that “a total global wealth transfer of over US$83 trillion within the next 20-25 years. Some US$9 trillion of this will be horizontal and over US$74 trillion will be vertical, between generations, i.e. roughly 12 per cent.” In other words, most wealth is not distributed widely but gets passed down to successors and heirs.

At the household level, the bottom half of society not only does not have much wealth, they are also in debt. The IMF, however, is more concerned with the rise in public debt, which is the burden of all citizens, including future generations. After all, future generations inherit not just assets but also liabilities.

The poor are also subject to higher interest rates on their debt because they are perceived as a higher credit risk. Thus, when incomes are insufficient to pay both the interest and principal, the poor – including many developing markets – get further into debt distress.