World’s 100 richest earned enough in 2012 to end global poverty 4 times over
The world's 100 richest people earned a stunning total of $240 billion in 2012 – enough money to end extreme poverty worldwide four times over, Oxfam has revealed, adding that the global economic crisis is further enriching the super-rich.
“The richest 1 percent has increased its income by 60 percent in the last 20 years with the financial crisis accelerating rather than slowing the process,” while the income of the top 0.01 percent has seen even greater growth, a new Oxfam report said.
For example, the luxury goods market has seen double-digit growth every year since the crisis hit, the report stated. And while the world's 100 richest people earned $240 billion last year, people in "extreme poverty" lived on less than $1.25 a day.
Oxfam is a leading international philanthropy organization. Its new report, ‘The Cost of Inequality: How Wealth and Income Extremes Hurt us All,’ argues that the extreme concentration of wealth actually hinders the world’s ability to reduce poverty.
The report was published before the World Economic Forum in Davos next week, and calls on world leaders to “end extreme wealth by 2025, and reverse the rapid increase in inequality seen in the majority of countries in the last 20 years.”
Oxfam's report argues that extreme wealth is unethical, economically inefficient, politically corrosive, socially divisive and environmentally destructive.
The problem is a global one, Oxfam said: "In the UK inequality is rapidly returning to levels not seen since the time of Charles Dickens. In China the top 10 percent now take home nearly 60 percent of the income. Chinese inequality levels are now similar to those in South Africa, which is now the most unequal country on Earth and significantly more [inequality] than at the end of apartheid."
In the US, the richest 1 percent's share of income has doubled since 1980 from 10 to 20 percent, according to the report. For the top 0.01 percent, their share of national income quadrupled, reaching levels never seen before.
“We can no longer pretend that the creation of wealth for a few will inevitably benefit the many – too often the reverse is true,” Executive Director of Oxfam International Jeremy Hobbs said.
Hobbs explained that concentration of wealth in the hands of the top few minimizes economic activity, making it harder for others to participate: “From tax havens to weak employment laws, the richest benefit from a global economic system which is rigged in their favor.”
The report highlights that even politics has become controlled by the super-wealthy, which leads to policies “benefitting the richest few and not the poor majority, even in democracies.”
“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 report said.
The four-day World Economic Forum will be held in Davos starting next Wednesday. World financial leaders will gather for an annual meeting that will focus on reviving the global economy, the eurozone crisis and the conflicts in Syria and Mali.
The report proposes a new global deal to world leaders to curb extreme poverty to 1990s levels by:
- closing tax havens, yielding $189bn in additional tax revenues
- reversing regressive forms of taxation
- introducing a global minimum corporation tax rate
- boosting wages proportional to capital returns
- increasing investment in free public services
Oxfam seeks 'new deal' on inequality from world leaders
The 100 richest people in the world earned enough last year to end extreme poverty suffered by the poorest on the planet four times over, Oxfam has said. Ahead of next week's World Economic Forum in Switzerland, the charity urged world leaders to tackle inequality.
Extreme wealth was "economically inefficient, politically corrosive, socially divisive", the report said.
The global economic system required reform so that it worked "in the interests of the whole of humanity".
A four-day summit involving political and economic leaders runs in Davos from next Wednesday.
In its report entitled The Cost Of Inequality: How Wealth And Income Extremes Hurt Us All, the UK charity said that efforts to tackle poverty were being hindered by an "explosion in extreme wealth".
The richest one per cent of the world's population had increased its income by 60% in the last 20 years, Oxfam said.
It reported that while the world's 100 richest people enjoyed a net income of $240bn (£150bn) last year, people in "extreme poverty" lived on less than $1.25 (78p) a day.
"We can no longer pretend that the creation of wealth for a few will inevitably benefit the many - too often the reverse is true," said Oxfam chief executive Barbara Stocking.
"Concentration of resources in the hands of the top 1% depresses economic activity and makes life harder for everyone else - particularly those at the bottom of the economic ladder."
The charity called for a "global new deal to reverse decades of increasing inequality".
Its suggestions for leaders due at the Davos summit include:
"As a first step world leaders should formally commit themselves to reducing inequality to the levels seen in 1990," Ms Stocking said.
- Closure of tax havens around the world
- A reversal of "the trend towards more regressive forms of taxation"
- A global minimum corporation tax rate
- Increased investment in free public services and safety nets for people out of work or ill
"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."
Equality at Davos
At $240 billion (Dh880 billion), the wealth accumulated in 2012 by the world's 100 richest individuals could have ended extreme poverty four times over. That statistic was published this week by the charity Oxfam ahead of the annual World Economic Forum in Davos, where some of the wealthiest and most powerful will gather to discuss global challenges, poverty among them.
Extreme poverty must be tackled with unified effort, from individuals, corporations and governments together. Extreme hunger, in which people go days without food or water, puts a heavy ethical burden on those with more to provide for those with less.
But there is another "extreme" that will frame the debate at Davos, if only from the sidelines. And that's the issue of extreme wealth. Do the haves have too much? As Oxfam sees it, extreme wealth is "economically inefficient, politically corrosive, socially divisive", and "depresses economic activity and makes life harder for everyone else" - especially those at the bottom.
Global challenges can't be solved over five days at a ski resort in the Alps. But if the world's privileged paused for a moment to ponder whether their riches could be better spent, we would all benefit.
The report by OXFAM (PDF):