62 people as rich as half the world
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THE wealthiest 62 people now own as much as half the world’s population, some 3.5 billion people, as the super-rich have grown richer and the poor poorer, an international charity said yesterday.
That compares with 388 people just five years ago, when the global economy was emerging from its deepest recession since World War II.
The wealth of the richest 62 people has risen by 44 percent since 2010, while the wealth of the poorest 3.5 billion fell 41 percent, Oxfam said in a report released ahead of the World Economic Forum’s annual meeting in Davos, Switzerland.
The world’s political and business elite are being urged to do more than pay lip service to growing inequalities around the world as they head for this week’s meeting.
Almost half the super-rich individuals are from the United States, 17 from Europe, and the rest from countries including China, Brazil, Mexico, Japan and Saudi Arabia.
“It is simply unacceptable that the poorest half of the world’s population owns no more than a few dozen super-rich people who could fit onto one bus,” said Winnie Byanyima, Oxfam International executive director, who will again attend Davos, having co-chaired last year’s event.
Tax havens, she said, are at the core of the rigged system that allows big corporations and wealthy individuals to avoid paying their fair share of tax.
“I challenge the governments, companies and elites at Davos to play their part in ending the era of tax havens, which is fuelling economic inequality and preventing hundreds of millions of people lifting themselves out of poverty,” said Byanyima.
In a statement accompanying the report, she said: “World leaders’ concern about the escalating inequality crisis has so far not translated into concrete action — the world has become a much more unequal place and the trend is accelerating.
“We cannot continue to allow hundreds of millions of people to go hungry while resources that could be used to help them are sucked up by those at the top.”
About US$7.6 trillion of individuals’ wealth sits in offshore tax havens, and if tax were paid on the income that this wealth generates, an extra US$190 billion would be available to governments every year, estimates Gabriel Zucman, assistant professor at University of California, Berkeley.
As much as 30 percent of all African financial wealth is held offshore, costing about US$14 billion in lost tax revenue every year, Oxfam said, referring to Zucman’s work.
This is enough money to pay for health care that could save 4 million children’s lives a year, and employ enough teachers to get every African child into school, Oxfam said in its report.
“Multinational companies and wealthy elites are playing by different rules to everyone else, refusing to pay the taxes that society needs to function. The fact that 188 of 201 leading companies have a presence in at least one tax haven shows it is time to act,” Byanyima said.
Ensuring governments collect the taxes they are owed by companies and rich individuals will be vital if world leaders are to meet their goal to eliminate extreme poverty by 2030, one of 17 Sustainable Development Goals set in September, Oxfam said.
The number of people living in extreme poverty has fallen by 650 million since 1981, even though the global population grew by 2 billion in that time, according to the Organization for Economic Cooperation and Development (OECD).
Much of this change has been because of the rise of China, which alone accounted for half a billion people moving out of extreme poverty.
Most of the world’s poorest no longer live in the poorest countries, but in middle-income countries like India, the OECD said in a recent report.
The inequalities are partly to do with differences in income, especially between urban and rural areas, but also differences in access to health care, education and jobs, it said.
“The figures suggest that the biggest causes of poverty are ... political, economic and social marginalization of particular groups in countries that are otherwise doing quite well,” economist Owen Barder is quoted as saying in the OECD report.
Although taxes and transfers help reduce income inequality in developed countries, these systems are less robust in many developing countries, according to the OECD.
An exception is Brazil, which makes payments to more than 13.3 million poor families on condition they enrol children in school and take part in health programs.
“That has helped to reduce rates of both child poverty as well as inequality,” the OECD report said.
Another report, from public relations firm Edelman, warned that the widening gap between the haves and have-nots since the global financial crisis is undermining a decades-long effort to reduce global poverty and fueling the rise of populist politicians.
Largest-ever gap
According to Edelman, inequalities within society are already driving political change and that could put a break on economic potential.
In its annual survey of trust levels around the world, it found the largest-ever gap between the views of highly educated people and those with fewer years of schooling, driven by a disparity in income.
Edelman found general level of trust in institutions — government, business, media and non-governmental organizations — among college-educated people around the globe up 4 percentage points at 60 percent, the highest level in the survey’s 16 year-history. For the wider public, Edelman’s trust gauge was up 2 percentage points at 48 percent.
It noted that the US has the biggest disparity in trust within its population, followed by Britain and France. Edelman’s online survey of 33,000 plus respondents in 28 countries was conducted between October 13 and November 16 last year.
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