The combined wealth of the richest 1 per cent will overtake that of the other 99 per cent of people next year unless the current trend of rising inequality is checked, Oxfam warned ahead of the annual World Economic Forum meeting in Davos.
The combined wealth of the richest 1 per cent will overtake that of the other 99 per cent of people next year unless the current trend of rising inequality is checked, Oxfam warned today ahead of the annual World Economic Forum meeting in Davos.
The international agency, whose executive director Winnie Byanyima will co-chair the Davos event, warned that the explosion in inequality is holding back the fight against global poverty at a time when 1 in 9 people do not have enough to eat and more than a billion people still live on less than US$1.25-a-day.
Byanyima will use her position at Davos to call for urgent action to stem this rising tide of inequality, starting with a crackdown on tax dodging by corporations, and to push for progress towards a global deal on climate change.
Wealth: Having it all and wanting more, a research paper published today by Oxfam, shows that the richest 1 per cent have seen their share of global wealth increase from 44 per cent in 2009 to 48 per cent in 2014 and at this rate will be more than 50 per cent in 2016. Members of this global elite had an average wealth of US$2.7m per adult in 2014.
Of the remaining 52 per cent of global wealth, almost all (46 per cent) is owned by the rest of the richest fifth of the world’s population. The other 80 per cent share just 5.5 per cent and had an average wealth of US$3,851 per adult – that’s 1/700th of the average wealth of the 1 per cent.
Winnie Byanyima, Executive Director of Oxfam International, said: “Do we really want to live in a world where the one per cent own more than the rest of us combined? The scale of global inequality is quite simply staggering and despite the issues shooting up the global agenda, the gap between the richest and the rest is widening fast.
“In the past 12 months we have seen world leaders from President Obama to Christine Lagarde talk more about tackling extreme inequality but we are still waiting for many of them to walk the walk. It is time our leaders took on the powerful vested interests that stand in the way of a fairer and more prosperous world.
“Business as usual for the elite isn’t a cost free option – failure to tackle inequality will set the fight against poverty back decades. The poor are hurt twice by rising inequality – they get a smaller share of the economic pie and because extreme inequality hurts growth, there is less pie to be shared around,” she said.
Today’s research paper, which follows the October launch of Oxfam’s global Even It Up campaign, shines a light on the way extreme wealth is passed down the generations and how elite groups mobilise their vast resources to ensure global rules are favourable towards their interests. More than a third of the 1645 billionaires listed by Forbes inherited some or all of their riches.
Twenty per cent of billionaires have interests in the financial and insurance sectors, a group which saw their cash wealth increase by 11 per cent in the 12 months to March 2014. These sectors spent US$550m lobbying policy makers in Washington and Brussels during 2013.
Billionaires listed as having interests in the pharmaceutical and healthcare sectors saw their collective net worth increase by 47 per cent. During 2013, they spent more than US$500m lobbying policy makers in Washington and Brussels. Oxfam is concerned that the lobbying power of these sectors is a major barrier in the way of reforming the global tax system and of ensuring intellectual property rules do not lead to the world’s poorest being denied life saving medicines.
There is increasing evidence from the International Monetary Fund, among others, that extreme inequality is not just bad news for those at the bottom but also damages economic growth.