This, in the face of globalization.

The report focuses on the chasm between the formal and informal economies, the widening gap between skilled and unskilled workers, the growing disparities in health, education and opportunities for social, economic and political participation.

Increasing poverty and a growing schism between the "haves" and the "have nots" continued to pose a major threat to developing democracies around the world and the resulting economic and social inequality will continue to breed violence and terror if the trend is not reversed, it said.

The U.N. Department of Economic and Social Affairs report warned of growing "violence associated with national and international acts of terrorism," which are the result of stark economic and social inequalities, and competition over scarce resources.

"In political terms, it means access to power, to decision making" are lost to the disenfranchised, Undersecretary-General for Economic and Social Affairs Jose Antonio Ocampo told reporters at U.N. World Headquarters in New York in introducing the 160-page document.

Solutions to inequality outlined in the report include addressing economic imbalances.

Some 80 percent of the world's domestic product belongs to 1 billion people living in the developed world, while the remaining 20 percent is shared by 5 billion people living in developing countries, the report said.

"This is especially important because it concentrates on inequality of income as well as inequality in access to basic social services, as well as decision-making," Ocampo said.

The report comes 10 years after the 1995 Copenhagen World Summit for Social Development where governments pledged to confront profound social challenges and to place people at the center of development, he said, adding, some decade-old social gaps had actually widened, particularly gender disparities.

Although more women and girls were being educated, formal employment figures for women had stagnated or even decreased in some parts of the world, while increasing in the informal sector.

Still, modest gains made in gender equality, education and other areas proved that social mobilization, particularly civil society engagement, can help raise awareness to social problems and spur action at national and regional levels, Ocampo said, pointing out the critical importance of boosting access to basic services as one of the most important instruments nations had to impact inequities.

"We will not be able to advance the development agenda without addressing the challenges of inequality within and between countries," he said.

The report said the inequalities accompanied globalization.

"These inequalities have had negative consequences in many areas, including employment, job security and wages," the report said. "However, there is still debate concerning the specific role of liberalization and deregulation policies in these trends."

In a world of increasing development when societies should be reaping the economic benefits of progress, instead many are experiencing alarming increases in the discrepancies between rich and poor.

The United States, Canada and Britain have not escaped this disturbing trend, it said, seeking to nudge both developed and developing countries to take more vigorous steps in the direction of assuring equality while responding to the economic urgency for growth.

Socioeconomic strategies should focus on access to resources, social services and the markets that must be incorporated alongside economic development programs.

Economic stimulation without the associated social programs is inadequate to eradicate the cycle of poverty the report said.

"Focusing exclusively on economic growth and income generation as a development strategy is ineffective, as it leads to the accumulation of wealth by a few, and deepens the poverty of many; such an approach does not acknowledge the intergenerational transmission of poverty," said the report.

"A broader approach to poverty reduction includes social, economic and political dimensions, integrating improvements in health, education, economic development and representation in legislative and judicial processes," it said.

"It is the implementation of policies in these areas that contributes to the development of human capital, enabling the poor to realize their full productive potential. Addressing all aspects of poverty increases the odds that future generations will reap the benefits of today's politics rather than remaining trapped in a cycle of poverty."

In a summary of the report, Ocampo said, "Failure to address this inequality predicament will insure that social justice and better living conditions for all people remain elusive," and social instability in the world continues.

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