The profits of the world's one hundred most wealthy individuals last year would be enough to wipe out world poverty, says a new report. And not just once over, or twice over, but the vast amount of money that has flowed to the top of the world's financial food chain would be enough to eradicate the worst kind of poverty a full four times over.
Such an explosion in extreme wealth and income inequality represented by these numbers is exacerbating and hindering the world’s ability to tackle poverty, warns international aid group Oxfam International in a new analysis published ahead of the World Economic Forum starting in Davos this week.
According to the report, ‘The cost of inequality: how wealth and income extremes hurt us all,’ the $240 billion net income in 2012 of the richest 100 billionaires would be enough to eliminate extreme poverty four times over. In releasing the report, Oxfam is calling on world leaders to curb today’s income extremes and commit to bringing back inequality levels to at least those experienced in the early 1990's.
“Concentration of resources in the hands of the top one per cent depresses economic activity and makes life harder for everyone else – particularly those at the bottom of the economic ladder," said Jeremy Hobbs, Oxfam's executive director.
“We can no longer pretend that the creation of wealth for a few will inevitably benefit the many – too often the reverse is true," he said. “In a world where even basic resources such as land and water are increasingly scarce, we cannot afford to concentrate assets in the hands of a few and leave the many to struggle over what’s left.”
In addition, Barbara Stocking, Oxfam's chief executive, says the world's extremity of wealth inequality is "economically inefficient, politically corrosive, socially divisive and environmentally destructive".
Oxfam is calling for a 'new global deal' which would stabilize the world's economic systems and bring equality back in way that would benefit all humanity.
“From tax havens to weak employment laws, the richest benefit from a global economic system which is rigged in their favour. It is time our leaders reformed the system so that it works in the interests of the whole of humanity rather than a global elite.”
The group estimates that closing tax havens – which hold as much as $32 trillion or a third of all global wealth – could yield an additional $189bn in additional tax revenues. In addition to a tax haven crackdown, elements of the "global new deal" Oxfam envisions would include:
a reversal of the trend towards more regressive forms of taxation;
a global minimum corporation tax rate;
measures to boost wages compared with returns available to capital;
increased investment in free public services and safety nets.
According to Al-Jazeera:
The group says that the world's richest one percent have seen their income increase by 60 percent in the last 20 years, with the latest world financial crisis only serving to hasten, rather than hinder, the process.
"We sometimes talk about the 'have-nots' and the 'haves' – well, we're talking about the 'have-lots'. […] We're anti-poverty agency. We focus on poverty, we work with the poorest people around the world. You don't normally hear us talking about wealth. But it's gotten so out of control between rich and poor that one of the obstacles to solving extreme poverty is now extreme wealth," Ben Phillips, a campaign director at Oxfam, told Al Jazeera.