EDITORIAL: In a perfect reflection of the way global income and wealth disparities have grown exponentially in our times, two recent headlines provide a very apt encapsulation of this reality. According to a statement by Oxfam on July 25, the world’s richest one percent increased their fortunes by $42 trillion over the past decade.
In sharp contrast to this, just a day earlier, the UN had reported that around nine percent of the global population – a massive 733 million people – suffered from hunger during 2023. Worryingly, moderate or severe food insecurity, which forces people to occasionally skip meals, hit an even greater 2.33 billion persons last year, making up almost 29 percent of the world population.
It goes without saying that inequality, in its many manifestations, has become the defining issue of our time. While addressing extreme disparities in living standards has become a central focus of myriad debates, driven by growing international consensus that everyone should have equal access to economic opportunities, the facts clearly demonstrate that rhetoric on this count hasn’t translated into concrete, positive changes on the ground.
According to the World Inequality Report 2022, global inequality today is close to the peak levels last observed in early 20th century.
According to the report, in every large region of the world, barring Europe, the share of the bottom 50 percent in total earnings is less than 15 percent, while the share of the richest 10 percent is over 40 percent, and in many regions it is closer to 60 percent.
However, what is even more troubling than these stark levels of income inequality are the disturbing patterns that emerge while examining disparities in wealth: between 1995 and 2021, the wealth of the richest one percent accounted for 38 percent of the global increment in wealth, while the bottom 50 percent captured a measly two percent, with global billionaire wealth soaring to never-before-seen heights during this period.
And given that wealth is a primary driver of future economic advantages and also of political power, this trend indicates the continuation of rising inequality in coming years as well. This extreme concentration of economic and political power in the hands of a small minority has exacerbated problems of climate breakdown, poverty, disparities in education and health outcomes, as well as global hunger as evidenced by the abovementioned UN figures.
It is pertinent to note that Oxfam’s aforesaid statement coincided with this year’s G20 summit of finance ministers held in Brazil, where the host nation made attempts to generate consensus for a new global tax on billionaires, as well as broader reforms of the international financial system.
While there have been increasing calls for coming up with ways to impose taxes on the ultra-wealthy, or at least prevent this class from dodging tax systems by making use of tax havens or legal loopholes to hide their wealth, and limit their ability to buy political influence, achieving these goals requires widespread consensus among nations, apart from overcoming substantial political and legal obstacles.
Among the G20 nations, for example, while the likes of Brazil, France and South Africa are in favour of a global tax, the US remains firmly against such a proposal.
International power brokers, however, must remember that billionaires and global conglomerates have too often been guilty of trying to avoid paying their fair share in taxes, and during a period when nations globally are grappling with high levels of debt, and are facing emergency situations vis-a-vis the climate crisis, extreme poverty and hunger, this disparity is wholly unacceptable.
Addressing this criminal imbalance will be critical for ensuring fairer distribution of resources internationally, generating the finance needed to tackle pressing global challenges effectively, and ultimately protecting the future of the planet.
Copyright Business Recorder, 2024
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