True scale of inequality

In a perfectly-timed tirade, Oxfam, a leading British charity, is coming down hard again this year on the business and political elite descending on Davos. In the organisation’s report this year titled, ‘Reward Work, Not Wealth’, the argument remains the same: solution to inequality lies in the economy working for the ordinary people, not for the rich and powerful.

As usual, there are catchy, nay alarming statistics in the report. The most biting one, perhaps, is that the richest one percent bagged 82 percent of growth in wealth last year, whereas the bottom half of humanity didn’t get any raise. That wealth gain – $762 billion – could end extreme global poverty seven times over. Whereas at the bottom, what a Bangladeshi worker stitching clothes for a major fashion firm can make in her entire lifetime will be made by that firm’s CEO in four days.

Oxfam attributes the trend of growing billionaire gains coming at the expense of ordinary workers to three chief factors: erosion of workers’ rights, big business’ influence on policy, and efforts to minimize labour costs. The remedies cited include making the wealthy pay their fair share of taxes, limiting shareholder returns, ensuring minimum ‘living’ wage, and protecting women’s rights to workplace safety and equal pay.

No one could possibly disagree with those broad contours of inequality and with what seems logical to minimize them. And they seem relevant to Pakistan as well. Oxfam Pakistan has highlighted narrow tax base, the SROs, and a predominantly indirect tax regime (GST and WHT) as “major contributors” to inequality in Pakistan, hurting prospects for better education, health, nutrition, water and sanitation.

Striking as those global inequality aggregates are, one is still at a loss when it comes to true scale of inequality at home. Oxfam Pakistan, which launched the same report in Rawalpindi yesterday, candidly mentioned that authenticated data, which could measure the actual level of income and wealth inequality, was simply not available in Pakistan. A country-level study is, therefore, missing.

Third-sector organisations have been collating different datasets to draw a general picture of social phenomena in Pakistan. But what the inequality debate in Pakistan needs first is a comprehensive study that measures this phenomenon and breaks it down along the lines of region, gender, age, and employment dimensions.

Findings will most likely be disturbing. So, what to do about it? Since inequality has its roots in unjust criteria used by the ruling elite while imposing taxes and allocating resources, the government needs to be more fair and consistent in its fiscal priorities. The rich need to pay their due share of taxes so that human investments (health, education, etc.) can be adequately made for generational uplift of the marginalized.

But given the elite’s rapacious ways and the way elected governments have been repeatedly undermined by unelected quarters, “redistribution” would remain a pipedream unless enough ordinary folks demand that their electoral verdicts be respected, elect political leadership on the platform of inequality, and later also hold them accountable.

It is time that inequality – which is amply manifest in Pakistan’s social fabric, but doesn’t get much airtime – becomes a serious campaign issue. For that, the need is to first assess the scale of the problem and then frame it appropriately.