IRIA News

The combined wealth of the richest 1 percent will surpass that of the other 99 percent of people by 2016 unless the current trend of extreme inequality is checked and tackled efficiently, says a report released by Oxfam.

In other words, Oxfam says that if trends continue, the rich will get richer and the poor will get poorer.

The report from the global anti-poverty organization came ahead of the annual World Economic Forum, taking place this week (from 21 – 24 January) in Davos, Switzerland where the billionaires and politicians might come under pressure to tackle rising inequality. Oxfam said it would use its high-profile role at the gathering to demand urgent action to narrow the gap between rich and poor.

“Do we really want to live in a world where the one percent own more than the rest of us combined?” asks Winnie Byanyima, Executive Director of Oxfam International, adding: “The scale of global inequality is quite simply staggering and despite the issues shooting up the global agenda, the gap between the richest and the rest is widening fast.”

Although world leaders from “President Obama to Christine Lagarde talk more about tackling extreme inequality but we are still waiting for many of them to walk the walk. It is time our leaders took on the powerful vested interests that stand in the way of a fairer and more prosperous world” insists Byanyima.

The international agency warned that the explosion in inequality is holding back the fight against global poverty at a time when 1 in 9 people do not have enough to eat and more than a billion people still live on less than $1.25-a-day. “Extreme inequality isn’t just a moral wrong. We know that it hampers economic growth and it threatens the private sector’s bottom line” said Winnie Byanyima.

“Extreme inequality isn’t just a moral wrong. It undermines economic growth and it threatens the private sector’s bottom line.  All those gathering at Davos who want a stable and prosperous world should make tackling inequality a top priority.”

Finance and Healthcare sectors generate and sustain vast riches

Global wealth is increasingly being concentrated in the hands of a small group of wealthy elite ho had an average wealth of $2.7 million per adult in 2014. These exceptionally rich individuals have generated and sustained their vast riches through their interests and activities in a few key economic sectors, including finance and pharmaceuticals/healthcare.

Companies from these sectors spend millions of dollars every year on lobbying to create a policy environment that protects and enhances their interests further. The most prolific lobbying activities in the US are on budget and tax issues; public resources that should be directed to benefit the whole population, rather than reflect the interests of powerful lobbyists.

Oxfam also made headlines at Davos last year with the revelation that the 85 richest people on the planet have the same wealth as the poorest 50 percent (3.5 billion people). That figure is now 80 – a dramatic fall from 388 people in 2010. The wealth of the richest 80 doubled in cash terms between 2009 and 2014.

Global business and political leaders must act to tackle extreme inequality

Lady Lynn Forester de Rothschild, Chief Executive Officer of E.L. Rothschild and chairman of the Coalition for Inclusive Capitalism, also called on business leaders to play their part in tackling extreme inequality. She said the report is the latest evidence that inequality has reached shocking extremes, and continues to grow. “It is time for the global leaders of modern capitalism, in addition to our politicians, to work to change the system to make it more inclusive, more equitable and more sustainable.”

“[People] are increasingly separated by economic and political power, inevitably heightening social tensions and increasing the risk of societal breakdown,” the report says.

Oxfam said it was calling on governments to adopt a seven point plan:

• Clamp down on tax dodging by corporations and rich individuals.
• Invest in universal, free public services such as health and education.
• Share the tax burden fairly, shifting taxation from labour and consumption towards capital and wealth.
• Introduce minimum wages and move towards a living wage for all workers.
• Introduce equal pay legislation and promote economic policies to give women a fair deal.
• Ensure adequate safety-nets for the poorest, including a minimum-income guarantee.
• Agree a global goal to tackle inequality.

by Sana Jamal – IRIA