7 PM | Oxfam inequality Report | 21 January, 2019


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News:

Oxfam Inequality report “Public Good or Private Wealth” reflects the gap between the rich and poor in this world. 

About Oxfam International:
• Oxfam International was established in 1995 by a group of independent non-governmental organizations. Main objective of organisation was to work together for reducing poverty and injustice.
• The Oxfam International Secretariat is based in Nairobi, Kenya.

 

MAJOR FINDINGS OF THE REPORT:

Statistics in Indian Context:

  • The Indian billionaires’ wealth crossed the USD 400 billion (Rs 28,000 billion) making the single largest increase since 2008 financial crises.
  • Wealth of top 1% increased by 39% whereas wealth of bottom 50% increased a dismal 3%,
  • India’s top 10% of the population holds 77.4% of the total national wealth.
  • Top 1 per cent that holds 51.53 per cent of the national wealth. “The bottom 60 per cent, the majority of the population, own merely 4.8 per cent of the national wealth
  • The wealth of top nine billionaires is equivalent to the wealth of the bottom 50% of the population.

Impact on India:

  • The report highlighted India’s dismal spending in healthcare and education among others.Public spending on health continues to hover around 1.3% of the GDP and also fails to spend minimal norms set by the Right to Education Act.
  • 6 crore Indians, who make up the poorest 10 per cent of the country, continued to remain in debt since 2004.
  • The survey also shows that women and girls are hardest hit by rising economic inequality
  • Children from poor families in India are three times more likely to die before their first birthday than children from rich families
  • Tax rates for the rich and corporations had been cut in recent decades. And when governments fail to tax the wealthy, they pass the tax burden on to poor people through consumer levies like value-added tax.

Global Scenario:

Boom time for the world’s billionaires

  • In the 10 years since the financial crisis, the number of billionaires has nearly doubled
  • The wealth of the world’s billionaires increased by $900bn in the last year alone, or $2.5bn a day.
  • Wealth of the poorest half of humanity, 3.8 billion people, fell by 11%

Progress in fighting poverty slows dramatically

  • Globally, there is a huge reduction in the numbers of people living in extreme poverty, defined by the World Bank as $1.90 per person per day. World Bank shows that the rate of poverty reduction has halved since 2013. But Extreme poverty is actually increasing in sub-Saharan Africa
  • The Bank finds that women are more often among the poorest people, particularly during their reproductive years, because of the level of unpaid care work they are expected to do.

Wealth is particularly undertaxed

  • While the richest continue to enjoy booming fortunes, they are also enjoying some of the lowest levels of tax in decades
  • Only 4 cents in every dollar of tax revenue comes from taxes on wealth.
  • In rich countries, the average top rate of personal income tax fell from 62% in 1970 to 38% in 2013. In developing countries, the average top rate of personal income tax is 28%.

Wealth inequality and the gap between women and men

  • Most of the world’s richest people are men.48 Globally, women earn 23% less than men and men own 50% more of the total wealth than women.
  • In Africa and in countries like India, Pakistan and Bangladesh, women account for somewhere between 20–30% of wealth

Buying a longer life

  • The average number of children dying before they are five has decreased in almost every country in recent years, which is a great achievement.
  • But looking behind the averages, the gap between rich and poor is still unacceptable. A child from a poor family in Nepal is three times more likely to die before their fifth birthday than a child from a rich family.

Impact of gap between rich and poor

  • Inequality makes the fight to end poverty much harder
    • Unless growth benefits the poorest people more between now and 2030, the World Bank forecasts that the first Sustainable Development Goal (SDG) – to eliminate extreme poverty – will be missed.
  • Inequality is destabilizing
    • For instance, in recent years rise in authoritarianism by governments has been seen worldwide, with crackdowns on freedom of speech and democracy. We have also seen a rise in popularity for right-wing, racist, sexist views and authoritarian politicians who support them. Many have pointed to the link between this global trend and high levels of inequality.
  • Inequality undermines our societies
    • Unequal societies are more stressed, less happy and have poorer mental health which have direct implication on increasing number of crime in our societies.
  • Inequality deter Environment
    • Inequality makes the fight to save our planet from climate breakdown even harder. Oxfam has shown that the average carbon footprint of the richest 1% globally could be as much as 175 times higher than that of the bottom 10%.

Steps to be taken to reduce inequality

  • All governments must set concrete, time bound targets and action plans to reduce inequality as part of their commitments under Sustainable Development Goal (SDG) 10 on inequality.
  • Universal Public service:Deliver universal free health care, education and other public services that also work for women and girls. Stop supporting privatization of public services.
Impact of social security and public service
• Reducing poor people’s expenses
• Impact on women: UNESCO estimates that if all girls were to receive a secondary education, there would be a 64% reduction in early and forced child marriages
• Boosting social cohesion:Public schools, public hospitals, public housing and, public water supply. Universal benefits, for all mothers, for all children and older people. These actions by governments can have a powerful equalizing impact on society.
• Powering social mobility
• Liberation and freedom: Public services and social protection can tackle inequality by providing freedom conviction most famously held by Nobel Prize-winningeconomist Amartya Sen.
Gender based assessment:
    • Public services and social protection must be designed with an understanding that gender and other inequalities will affect how women and men will access them
    • For this Government can carry out gender-based assessments of services to understand what might be holding women or men back from accessing them
  • Taxing wealth:
    • In addition to progressively increasing rates and tightening collection of personal and corporate income taxes, governments should pay moreattention to taxing wealth itself.
    • Wealth inequality is significantly higher than income inequality, so taxing wealth can make an important contribution to reducing economic inequality. It can also raise significant revenues for governments.
    • For example, in India, getting the richest to pay just 0.5% extra tax on their wealth could raise more money than it would cost to educate all 262 million children out of school and provide healthcare that would save the lives of 3.3 million people
  • Cracking Down on Corruption – Tackling corruption is central to achieving universal public services and social protection.
    • For example, the intergovernmental Financial Action Task Force found that tax havens were strongly involved in facilitating corruption.455 Ordinary citizens areless likely to want to pay their taxes if they feel that those at the top do not pay their fair share, and that the tax money they pay will not be well spent

 


Source: https://www.thehindubusinessline.com/economy/billionaires-wealth-grew-by-2200-crday-in-2018/article26043564.ece

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