KUALA LUMPUR, Malaysia, Aug 28 (IPS) – Oxfam expects the world’s first trillionaire to emerge within a decade and poverty to end in 229 years! The wealth of the world’s five richest men has more than doubled since 2020, while 4.8 billion people have become poorer.
The Oxfam report 2024 entitled Inequality Inc.. warned: “We are witnessing the beginning of a decade of division,” as billions of people have to cope with “pandemic, inflation and war while billionaires’ fortunes boom.”
“This inequality is no accident. The billionaire class is ensuring that corporations make them richer at the expense of everyone else,” noted Amitabh Behar of Oxfam International.
Driving inequality
Summarising the report, Tanupriya Singh noted that the gap between rich and poor and between wealthy nations and developing countries has widened for the first time in the 21st century as the super-rich have become significantly richer.
The global North holds 69% of the world’s wealth and 74% of billionaires’ wealth. Oxfam notes that today’s wealth concentration began with colonialism and empires.
Since then, “neo-colonial relations with developing countries have persisted, maintaining economic imbalances and manipulating economic rules in favor of rich nations.”
The report states: “Economies in developing countries depend on the export of raw materials – from copper to coffee – for use by monopolistic industries in developing countries, thus perpetuating a colonial-style ‘extractivist’ model.”
Inequalities within rich countries have increased. Marginal groups are worse off. This is leading to rival ethnopopulist movements and vicious identity politics.
70 percent of the world’s largest corporations have a billionaire as their main shareholder or CEO. These companies are worth over $10 trillion, which exceeds the combined output of Latin America and Africa.
The incomes of the rich have risen much faster than those of most others. The top 1% of shareholders own 43% of the world’s financial wealth – half of which is in Asia, 48% in the Middle East and 47% in Europe.
Between mid-2022 and mid-2023, 148 of the world’s largest companies generated profits of $1.8 trillion. At the same time, 82% of the profits of 96 large companies went to shareholders through share buybacks and dividends.
Only 0.4% of the world’s largest companies have agreed to pay minimum wages to their profit-makers. Not surprisingly, the poorer half of the world earned only 8.5% of global income in 2022.
The wages of nearly 800 million workers failed to keep pace with inflation, losing $1.5 trillion in 2022 and 2023, an average of 25 days of lost wages per worker.
The Oxfam 2024 report found that in addition to income inequality, workers face increasing challenges due to stressful working conditions.
The gap between the incomes of the super-rich and those of workers is so large that it would take a woman in the health or social services sector 1,200 years to earn the annual salary of the CEO of a Fortune 100 company!
In addition to lower wages for women, unpaid care work subsidizes the global economy to the tune of at least $10.8 trillion annually – three times what Oxfam calls the “tech industry.”
Monopoly power
Oxfam points out that monopoly power has exacerbated inequality in the world, with a few corporations influencing and controlling national economies, governments, laws and policies in their own interests.
According to a study by the International Monetary Fund (IMF), monopolies are responsible for 76 percent of the decline in the wage share of income from U.S. manufacturing.
Behar noted, “Monopolies hurt innovation and crush workers and smaller businesses. The world has not forgotten how pharmaceutical monopolies denied millions of people the COVID-19 vaccine, creating a racist vaccine apartheid while creating a new billionaires’ club.”
Between 1995 and 2015, 60 pharmaceutical companies merged to form ten large pharmaceutical groups. Although innovations are usually subsidized with public funds, pharmaceutical monopolies can impose extortionate prices with impunity.
Oxfam points out that Ambani’s wealth in India is due to monopolies in many sectors enabled by the Modi regime. The recent extravagant wedding celebration of Ambani’s son was a prime example of the extreme concentration of wealth worldwide.
The 2021 Oxfam report estimated that “it would take an unskilled worker 10,000 years to earn what Ambani earned in an hour during the pandemic, and three years to earn what he earned in a second.”
Not surprisingly, the 2023 Oxfam report states: “India’s richest 1% own around 40% of the country’s wealth, while over 200 million people continue to live in poverty.”
Tax subordination
The companies have increased their value through a “sustained and highly effective war on taxation that has deprived the public of important resources.”
As many companies increased their profits, the average corporate tax rate fell from 23% to 17% between 1975 and 2019. At the same time, around one trillion dollars flowed into tax havens in 2022 alone.
Of course, falling corporate tax rates are also due to “the broader neoliberal agenda being pushed by corporations and their wealthy owners, often together with countries in the global North and international institutions such as the World Bank.”
At the same time, pressure for austerity measures has increased, as government tax revenues have been relatively declining for decades. High levels of national debt and corporate tax evasion and avoidance have exacerbated austerity policies.
Underfunded public services have had a negative impact on consumers and workers, particularly in the health and social sectors. Higher interest rates have exacerbated debt crises in developing countries.
As governments are unable to maintain public services for financial reasons, advocates of privatization have gained influence and can gain greater control over public resources in a variety of ways.
Private companies benefit from discounted sales of public assets, from public-private partnerships and from government contracts to implement government policies and programs.
“Major development agencies and institutions … have found common ground with investors by adopting approaches that reduce the risk of such arrangements by shifting financial risk from the private to the public sector,” the report said.
Access to basic public services should be universal. Insistence on private profit interests denies access to marginalised populations and exacerbates inequalities.
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© Inter Press Service (2024) — All rights reservedOriginal source: Inter Press Service
