Coming back from an extended conference on gross national happiness in Bhutan, which is one of the first carbon negative countries in the world, 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 IMF, global debt amounted to US$ 250 trillion in 2023, or 237 percent of GDP, with global private debt at more than US$ 150 trillion or 143 per cent of GDP.

If global private wealth is now estimated at over $450 trillion, is debt of $250 trillion seriously a problem?  

It is, if net wealth is distributed unevenly.   Worldwide net private wealth stood at $454.4 trillion in 2022. The highest wealth rung or 1.1% of the world adult population controlled $208.3 trillion in wealth, or 45.8% of the global total.  

Wealth is not only concentrated – it is concentrating as the rich get richer. 

So when GDP is rising and markets are hitting record highs, most people are not happy because of perceived income and wealth inequity.  

Of Course, wealth is passed from generation to generation. 

But with the gradual dismantling of death duties in many countries, and tax cuts for the rich, such as in America, wealth has been retained in wealthy hands.  

The UBS Global Wealth Report 2025 forecasted that “a total global wealth transfer of over USD 83 trillion within the next 20 – 25 years.

Some USD 9 trillion of this will be horizontal and over USD 74 trillion will be vertical, between generations, i.e. roughly 12%”. 

 In other words, wealth is less distributed widely, but more down to successors and heirs.  

At the household level, the bottom half of society not only do not have much wealth, but 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, the future generations inherit not just assets but also liabilities. 

The poor are also subject to higher interest rate on their debt due to higher credit risks. 

Thus, when incomes are insufficient to pay both interest and principal, the poor, including many developing markets, get further into debt distress. 

Intergenerational justice refers to the ethical principle that present generations should not compromise the well-being or opportunities of future generations. 

Simply, future generations should have fairness in the distribution of resources, benefits, and burdens over time. 

When the existing generation is worsening social capital (through great conflicts between class, country and along religious and racial lines) or through damaging natural capital (by cutting down forests, emitting pollution and carbon dioxide), we are leaving social capital and planetary resources in worse shape for our children and grandchildren. 

There are two types of injustices staring us in the face. The first is human injustices against other people and the other is planetary injustice where we abuse Mother Nature.  

The baby boomer generation to which I belong, born after the Second World War, has created the greatest wealth in financial terms the world has ever seen, with financial assets over five times global GDP.  

However, it has also left the planet much worse off in terms of biodiversity loss, pollution, destruction of natural habitat where pristine rainforests, marine reefs and polar caps are melting, all of which will cause rising seas and loss of fertile lands which provide water, food and energy for humanity. 

Our grandchildren will never enjoy pristine rivers and seas free of plastic and human contamination.

Debt is all about consuming today and paying tomorrow.  

Theoretically, the rational economic man receives higher interest rates for delayed consumption, but if central banks print money to keep nominal interest rates low, the consumer and investor are both rewarded by incentives to consume today and by asset inflation.  

 We are therefore in a GDP consumption trap, whereby households borrow to keep living standards up, and governments borrow to keep the citizens happy.

For many developing countries in debt distress, the situation is getting dire.   According to UNCTAD, global public debt reached a record high of $102 trillion in 2024.

Although public debt in developing countries accounted for less than one-third of the total – $31 trillion – it has grown twice as fast as in developed economies since 2010. 

As of June 2025, more than half of low-income countries are in, or at high risk of, debt distress, a situation in which a country cannot meet its debt repayment obligations. 

Bond yields in Africa are 9.8% per annum, 7.1% in Latin America, 5.5% in Asia-Pacific and 2.8% in the United States. 

At such high rates, the less developed countries in Africa cannot afford to spend on social welfare, health, education and infrastructure.

The late anthropologist David Graeber, who wrote on Debt: The First 5000 Years, argued that debt was used to enslave people.  He asserted that “what we owe each other is not debt, but the promise to build a world worth living in together.”  

In other words, he is talking about equity, which is owner’s capital.  

What the Bhutan concept of Gross National Happiness taught me is that equity is about intergenerational happiness – bequeathing well-being to not just current, but future generations. 

If we accept that we are not owners of our social capital, but stewards who are here to preserve, regenerate and protect our natural and social habitat, then we move from the “take, make, waste” mentality of modern consumerism to one of recycle, reuse and regenerate – helping to conserve our harmony with people and planet. 

The current world of negative energy – geopolitical conflicts, social protests – can only be ameliorated if we harness our energies towards social and planetary well-being.   It is the sacrifice of the present generation that makes our grandchildren better off.  Is that too much to ask?

(Tan Sri Andrew Sheng is Distinguished Fellow of Asia Global Institute, University of Hong Kong,and Chief Adviser to the China Banking Regulatory Commission.)