The richest 85 people on the planet have as much wealth as half the world’s population, Oxfam says in a new report that details the “pernicious impact,” that widening economic inequality is having worldwide.
The report also says that as inequality widens, citizens across the globe are becoming more and more aware of the divide, and increasingly believe that the political system is rigged in favour of the wealthy.
The report, entitled Working For the Few, has been published ahead of the World Economic Forum in Davos, Switzerland which begins Tuesday. The WEF is an independent organization that hosts the summit of business, political and academic leaders.
“It is staggering that in the 21st Century, half of the world’s population own no more than a tiny elite whose numbers could all sit comfortably in a single train carriage,” Winnie Byanyima, Oxfam’s executive director, said in a press release posted on the organization’s website.
The Oxfam report describes several situations that vividly illustrate rising global economic inequality.
It estimates that the world’s richest individuals and companies are currently hiding $21 trillion in a web of unrecorded and off-shore accounts that governments can’t tax.
The reports also says that tax rates for the richest people have fallen in 29 of the 30 countries since the 1970s, “meaning that in many places the rich not only get more money but also pay less tax on it.”
“This capture of opportunities by the rich at the expense of the poor and middle classes has helped create a situation where seven out of every ten people in the world live in countries where inequality has increased since the 1980s,” the report said.
Oxfam says that in India, for example, the number of billionaires has increased from six to 61 in the last decade. And while the wealthy have exploited India’s “regressive tax structure,” spending on “the poorest remains remarkably low.”
Oxfam also takes aim at global corporations doing business in Africa, saying in the report that they “exploit their influence to avoid taxes and royalties, reducing the resources available to governments to fight poverty.”
Byanyima said the fight against global poverty simply can’t be won without first tackling inequality.
“Widening inequality is creating a vicious circle where wealth and power are increasingly concentrated in the hands of a few, leaving the rest of us to fight over crumbs from the top table,” she said.
The report, however, shows that paralleling the increase in inequality is a strong awareness of it in most countries. In surveys done for Oxfam in six countries, the organization says the majority of people believe that laws are skewed in favour of the rich. In Brazil, for example, seven out of 10 people agreed with that statement “The rich have too much influence over where this country is headed”; in Spain, eight of ten people agreed with it.
Oxfam is calling on leaders gathered at the WEF to make a number of pledges, including to support progressive taxation, and to also challenge their governments to use tax revenue to provide universal healthcare, education and social protection for citizens.
“Without a concerted effort to tackle inequality, the cascade of privilege and of disadvantage will continue down the generations,” Byanyima said. “We will soon live in a world where equality of opportunity is just a dream. In too many countries economic growth already amounts to little more than a ‘winner takes all’ windfall for the richest.”
