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by Jon Slater
19 January 2015
from
OXFAM Website
Extreme inequality isn't
just a moral wrong.
We know that it hampers
economic growth
and it threatens the private
sector's bottom line.
Winnie Byanyima
Executive Director, Oxfam International
The combined wealth of the richest 1 percent will overtake that of
the other 99 percent of people next year unless the current trend of
rising inequality is checked,
Oxfam warned today ahead of the annual
World Economic Forum meeting in Davos.
The international agency, whose executive director
Winnie
Byanyima will co-chair the Davos event, 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.
Byanyima will use her position at Davos to call for urgent action to
stem this rising tide of inequality, starting with a crackdown on
tax dodging by corporations, and to push for progress towards a
global deal
on climate change.
'Wealth - Having it All and Wanting More,'
a research paper published today by Oxfam, shows that the richest 1
percent have seen their share of global wealth increase from 44
percent in 2009 to 48 percent in 2014 and at this rate will be more
than 50 percent in 2016. Members of this global elite had an average
wealth of $2.7 million per adult in 2014.
Of the remaining 52 percent of global wealth, almost all (46
percent) is owned by the rest of the richest fifth of the world’s
population. The other 80 percent share just 5.5 percent and had an
average wealth of $3,851 per adult - that’s 1/700th
of the average wealth of the 1 percent.
Staggering
inequality
Winnie Byanyima, Executive Director of Oxfam International, said:
"Do we really want to live in a
world where the one percent own more than the rest of us
combined?
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.
"In the past 12 months we have seen
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.
"Business as usual for the elite isn’t a cost free option -
failure to tackle inequality will set the fight against poverty
back decades. The poor are hurt twice by rising inequality -
they get a smaller share of the economic pie and because extreme
inequality hurts growth, there is less pie to be shared around."
Business must
act
Lady Lynn Forester
de Rothschild,
Chief Executive Officer of E.L. Rothschild and chairman of the
Coalition for Inclusive Capitalism, who is speaking at a
joint Oxfam-University of Oxford event on inequality today,
called on business leaders meeting in Davos to play their part in
tackling extreme inequality.
She said:
"Oxfam’s report is just 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.
"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."
Oxfam 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 2009-14.
The
international agency is calling on government to adopt a seven point
plan to tackle inequality:
-
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.
Today’s research paper, which follows
the October launch of Oxfam’s global
Even It Up
campaign, shines a light on the way extreme wealth is
passed down the generations and how elite groups mobilize their vast
resources to ensure global rules are favorable towards their
interests.
More than a third of the 1645
billionaires listed by Forbes inherited some or all of their riches.
Twenty percent of billionaires have
interests in the financial and insurance sectors, a group which saw
their cash wealth increase by 11 percent in the 12 months to March
2014. These sectors spent $550 million lobbying policy makers in
Washington and Brussels during 2013.
During the 2012 US election cycle alone,
the financial sector provided $571 million in campaign
contributions.
Billionaires listed as having interests
in
the pharmaceutical and healthcare sectors
saw their collective net worth increase by 47 percent. During 2013,
they spent more than $500 million lobbying policy makers in
Washington and Brussels.
Oxfam is concerned that the lobbying
power of these sectors is a major barrier in the way of reforming
the global tax system and of ensuring intellectual property rules do
not lead to the world’s poorest being denied life saving medicines.
There is increasing evidence from
the International Monetary Fund,
among others, that extreme inequality is not just bad news for those
at the bottom but also damages economic growth.
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