inequality

Richest 1% bag nearly twice as much wealth as the rest of the world put together over the past two years

January 17, 2023

Super-rich outstrip their extraordinary grab of half of all new wealth in past decade.
Billionaire fortunes are increasing by US$2.7 billion (NZ$4.2 billion) a day even as at least 1.7 billion workers now live in countries where inflation is outpacing wages.
A tax of up to 5 percent on the world’s multi-millionaires and billionaires could raise US$1.7 trillion a year, enough to lift 2 billion people out of poverty.

The richest 1 percent grabbed nearly two-thirds of all new wealth worth US$42 trillion created since 2020, almost twice as much money as the bottom 99 percent of the world’s population, reveals a new Oxfam report today. During the past decade, the richest 1 percent had captured around half of all new wealth.

“Survival of the Richest” is published on the opening day of the World Economic Forum in Davos, Switzerland. Elites are gathering in the Swiss ski resort as extreme wealth and extreme poverty have increased simultaneously for the first time in 25 years.

“While ordinary people are making daily sacrifices on essentials like food, the super-rich have outdone even their wildest dreams. Just two years in, this decade is shaping up to be the best yet for billionaires —a roaring ‘20s boom for the world’s richest,” said Gabriela Bucher, Executive Director of Oxfam International.

“Taxing the super-rich and big corporations is the door out of today’s overlapping crises. It’s time we demolish the convenient myth that tax cuts for the richest result in their wealth somehow ‘trickling down’ to everyone else. Forty years of tax cuts for the super-rich have shown that a rising tide doesn’t lift all ships —just the superyachts.”

Billionaires have seen extraordinary increases in their wealth. During the pandemic and cost-of-living crisis years since 2020, US$26 trillion (63 percent) of all new wealth was captured by the richest 1 percent, while US$16 trillion (37 percent) went to the rest of the world put together. A billionaire gained roughly US$1.7 million for every US$1 of new global wealth earned by a person in the bottom 90 percent. Billionaire fortunes have increased by US$2.7 billion a day. This comes on top of a decade of historic gains —the number and wealth of billionaires having doubled over the last ten years.

Billionaire wealth surged in 2022 with rapidly rising food and energy profits. The report shows that 95 food and energy corporations have more than doubled their profits in 2022. They made US$306 billion in windfall profits, and paid out US$257 billion (84 percent) of that to rich shareholders. The Walton dynasty, which owns half of Walmart, received US$8.5 billion over the last year. Indian billionaire Gautam Adani, owner of major energy corporations, has seen this wealth soar by US$42 billion (46 percent) in 2022 alone. Excess corporate profits have driven at least half of inflation in Australia, the US and the UK.

At the same time, at least 1.7 billion workers now live in countries where inflation is outpacing wages, and over 820 million people —roughly one in ten people on Earth— are going hungry. Women and girls often eat least and last, and make up nearly 60 percent of the world’s hungry population. The World Bank says we are likely seeing the biggest increase in global inequality and poverty since WW2. Entire countries are facing bankruptcy, with the poorest countries now spending four times more repaying debts to rich creditors than on healthcare. Three-quarters of the world’s governments are planning austerity-driven public sector spending cuts —including on healthcare and education— by US$7.8 trillion over the next five years.

Oxfam is calling for a systemic and wide-ranging increase in taxation of the super-rich to claw back crisis gains driven by public money and profiteering. Decades of tax cuts for the richest and corporations have fueled inequality, with the poorest people in many countries paying higher tax rates than billionaires.

Elon Musk, one of the world’s richest men, paid a “true tax rate” of about 3 percent between 2014 and 2018. Aber Christine, a flour vendor in Uganda, makes US$80 a month and pays a tax rate of 40 percent.

Worldwide, only four cents in every tax dollar now comes from taxes on wealth. Half of the world’s billionaires live in countries with no inheritance tax for direct descendants. They will pass on a US$5 trillion tax-free treasure chest to their heirs, more than the GDP of Africa, which will drive a future generation of aristocratic elites. Rich people’s income is mostly unearned, derived from returns on their assets, yet it is taxed on average at 18 percent, just over half as much as the average top tax rate on wages and salaries.

The report shows that taxes on the wealthiest used to be much higher. Over the last forty years, governments across Africa, Asia, Europe, and the Americas have slashed the income tax rates on the richest. At the same time, they have upped taxes on goods and services, which fall disproportionately on the poorest people and exacerbate gender inequality. In the years after WW2, the top US federal income tax rate remained above 90 percent and averaged 81 percent between 1944 and 1981. Similar levels of tax in other rich countries existed during some of the most successful years of their economic development and played a key role in expanding access to public services like education and healthcare.

“Taxing the super-rich is the strategic precondition to reducing inequality and resuscitating democracy. We need to do this for innovation. For stronger public services. For happier and healthier societies. And to tackle the climate crisis, by investing in the solutions that counter the insane emissions of the very richest,” said Bucher.

According to new analysis by the Fight Inequality Alliance, Institute for Policy Studies, Oxfam and the Patriotic Millionaires, an annual wealth tax of up to 5 percent on the world’s multi-millionaires and billionaires could raise US$1.7 trillion a year, enough to lift 2 billion people out of poverty, fully fund the shortfalls on existing humanitarian appeals, deliver a 10-year plan to end hunger, support poorer countries being ravaged by climate impacts, and deliver universal healthcare and social protection for everyone living in low- and lower middle-income countries.

Oxfam is calling on governments to:

Introduce one-off solidarity wealth taxes and windfall taxes to end crisis profiteering.
Permanently increase taxes on the richest 1 percent, for example to at least 60 percent of their income from labor and capital, with higher rates for multi-millionaires and billionaires. Governments must especially raise taxes on capital gains, which are subject to lower tax rates than other forms of income.
Tax the wealth of the richest 1 percent at rates high enough to significantly reduce the numbers and wealth of the richest people, and redistribute these resources. This includes implementing inheritance, property and land taxes, as well as net wealth taxes.

Notes to editors

Download “Survival of the Richest” and the methodology document outlining how Oxfam calculated the statistics in the report.

Oxfam’s calculations are based on the most up-to-date and comprehensive data sources available. Figures on the very richest in society come from the Forbes billionaire list.

All amounts are expressed in US dollars and, where relevant, have been adjusted for inflation using the US consumer price index.

According to the World Bank, extreme poverty increased in 2020 for the first time in 25 years. At the same time, extreme wealth has risen dramatically since the pandemic began.

The report shows that while the richest 1 percent captured 54 percent of new global wealth over the past decade, this has accelerated to 63 percent in the past two years. US$42 trillion of new wealth was created between December 2019 and December 2021. US$26 trillion (63 percent) was captured by the richest 1 percent, while US$16 trillion (37 percent) went to the bottom 99 percent. According to Credit Suisse, individuals with more than US$1 million in wealth sit in the top 1 percent bracket.

The billionaire class is US$2.6 trillion richer than before the pandemic, even if billionaire fortunes slightly fell in 2022 after their record-smashing peak in 2021. The world’s richest are now seeing their wealth climb again.

In the US, the UK and Australia, studies have found that 54 percent, 59 percent and 60 percent of inflation, respectively, was driven by increased corporate profits. In Spain, the CCOO (one of the country’s largest trade unions) found that corporate profits are responsible for 83.4 percent of price increases during the first quarter of 2022.

The World Bank announced that the world has almost certainly lost its goal of ending extreme poverty by 2030 and that “global progress in reducing extreme poverty has grind[ed] to a halt” amid what the Bank says was likely to be the largest increase in global inequality and the largest setback in global poverty since WW2. The World Bank defines extreme poverty as living on less than US$2.15 per day.

Elon Musk paid a “true tax rate” of just 3.27 percent from 2014 to 2018, according to ProPublica.

The US$6.85 poverty line was used to calculate how many people (2 billion) an annual wealth tax of up to 5 percent on the world’s multi-millionaires and billionaires could lift out of poverty.

Polling consistently finds that most people across countries support raising taxes on the richest. For example, the majority of people in the US, 80 percent of Indians, 85 percent of Brazilians and 69 percent of people polled across 34 countries in Africa support increasing taxes on the rich.

Oxfam’s research shows that the ultra-rich are the biggest individual contributors to the climate crisis. The richest billionaires, through their polluting investments, are emitting a million times more carbon than the average person. The wealthiest 1 percent of humanity are responsible for twice as many emissions as the poorest 50 percent and by 2030, their carbon footprints are set to be 30 times greater than the level compatible with the 1.5°C goal of the Paris Agreement.

Aotearoa top 10 in global inequality index, but tax system’s inequality impact 136th

October 12, 2022

Oxfam Aotearoa communications and advocacy director Dr Jo Spratt said about the Commitment to Reducing Inequality index:

“The inequality index shows Aotearoa is doing pretty well overall, but there is still work to be done. The fact that rich and poor countries alike have exacerbated an explosion of economic inequality since the outbreak of the pandemic from 2020 is unacceptable.

“Billionaire wealth and corporate profits have soared to record levels during the Covid-19 pandemic, while over a quarter of a billion more people could crash to extreme levels of poverty this year because of coronavirus, rising global inequality, and the shock of food price rises supercharged by the war in Ukraine.

“Tax is one of the most powerful tools we have to fight inequality. It is disappointing to see New Zealand’s tax system contributing to the gap between the rich and poor. Especially in these extraordinary times, tax is crucial to boosting government resources to support welfare systems and public services.

“An excess profits tax on supermarkets could be used to support the poorest households most hit by the increase in food prices. Excess profits and windfall tax revenues can help tackle the biggest challenges of our times like the explosion in inequality and the climate crisis.”

The 2022 Commitment to Reducing Inequality Index (CRI Index) is the first detailed analysis into the type of inequality busting policies and actions that 161 countries might have pursued during the first two years of the pandemic.

New Zealand ranks eighth overall, and seventh in the world on tax progressivity. The index found that New Zealand’s tax system is effective at collecting revenue; however, this comes at a cost as New Zealand’s tax system makes a direct contribution to an unequal income distribution. On this, New Zealand ranks 136th in the world. Oxfam says the Government has made some progress since 2020 by slightly increasing the top income tax rate, but needs to do more by taxing wealth and exploring better ways to tax corporate profits.

The table below shows New Zealand’s ranking on the key indicators that make up the CRI.

INDICATOR	RANK
PUBLIC SERVICES
Education spending	98
Social protection spending	35
Health spending	9
Public service spending average of indicators	14
Public service implementation	18
Public service impact on inequality (Gini)	33
Progressivity of public services	22
TAX
Tax policy	91
Tax productivity	3
Tax impact on inequality (Gini)	136
Progressivity of tax	7
LABOUR
Labour rights	74
Women’s labour rights	29
Minimum wage	35
Labour policy average of indicators	50
Coverage of labour rights	36
Wage impact on inequality (Gini)	53
Progressivity of Labour Legislation	35
OVERALL RANK
Commitment to reducing Inequality	8

New index shows governments worldwide stoked an inequality explosion during COVID-19 pandemic

October 12, 2022

Half of the poorest countries saw health spendings drop despite the pandemic, while 95 percent of all countries froze or even lowered taxes on rich people and corporates

Rich and poor countries alike have exacerbated an explosion of economic inequality since the outbreak of the pandemic from 2020, reveals new research by Oxfam and Development Finance International (DFI).

The overwhelming majority of governments cut their shares of health, education and social protection spending. At the same time, they refused to raise taxes on excessive profits and soaring wealth.

The index shows that despite the worst health crisis in a century, half of low and lower middle-income countries cut their share of health spending of their budgets. Almost half of all countries cut their share going to social protection, while 70 percent cut their share going to education.

As poverty levels increased to record levels and workers struggled with decades-high prices, two thirds of countries failed to raise their minimum wages in line with economic growth. Despite huge pressure on government finances, 143 of 161 countries froze the tax rates on their richest citizens, and 11 countries even lowered them.

France fell five places in the index after cutting corporate tax rates and eliminating its wealth tax altogether in 2019. Jordan dropped its budget share for health spending by a fifth, despite the pandemic. Nigeria did not update its minimum wage since before the pandemic, and the US has not raised the federal minimum wage since 2009.

“Our index shows that most governments have completely failed to take the steps needed to counter the inequality explosion created by COVID-19. They ripped away public services when people needed them most and instead left billionaires and big corporations off the hook to reap record profits. There is some good news of valiant governments from the Caribbean to Asia bucking this trend, taking strong steps to keep inequality in check,” said Gabriela Bucher, Oxfam International Executive Director.

Strong actions to reduce inequality were taken by both low and middle income countries:

Costa Rica put up its top income tax by 10 percent
The Occupied Palestinian Territory increased its social spending from 37 to 47 percent of its entire budget.
Barbados introduced a comprehensive set of laws to improve women’s labor rights, and the Maldives introduced its first national minimum wage.

As Finance Ministers gather in Washington for the International Monetary Fund (IMF) and World Bank Annual Meetings, developing nations are facing a global economy that is making it ever more difficult to meet the needs of their population. While injecting trillions in their own economies, rich countries failed to increase aid during the pandemic. Economic inequality and poverty in poor countries are further exacerbated by the IMF’s insistence on new austerity measures to reduce debts and budget deficits.,

“The debate has catastrophically shifted from how we deal with the economic fallout of COVID-19 to how we reduce debt through brutal public spending cuts, and pay freezes. With the help of IMF, the world is sleepwalking into measures that will increase inequality further. We need to wake up and learn the lessons; preventing huge increases in inequality is completely practical, and common sense. Inequality is a policy choice, governments must stop putting the richest first, and ordinary people last”, says Matthew Martin, Director of DFI.

Oxfam and DFI analysis shows that based on IMF data, three quarters of all countries globally are planning further cuts to expenditures over the next five years, totalling $7,8 trillion dollars.

In 2021, lower income countries spent 27.5 percent of their budgets in repaying their debts – twice the amount that they have spent on their education, four times that of health and nearly 12 times that of social protection.

“For every dollar spent on health, developing countries are paying four dollars in debt repayments to rich creditors. Comprehensive debt relief and higher taxes on the rich are essential to allow them to reduce inequality dramatically”, said Martin.

Despite historical precedent, nearly all countries failed to increase taxation on the richest or pursue windfall profits during the COVID crisis. After the 1918 flu epidemic, the 1930s depression, and World War Two, many rich countries increased taxes on the richest and introduced taxes on corporate windfall profits. They used this revenue to build education, health and social protection systems. Taxation of the wealthiest and windfall profits can generate trillions of dollars in tax revenue.

“Government leaders in Washington face a choice: build equal economies where everyone pays their fair share or continue to drive up the gap between the rich and the rest, causing huge, unnecessary suffering”, said Bucher.

Notes to editors

The 2022 Commitment to Reducing Inequality (CRI) Index is the first detailed analysis looking at governments’ policies and actions to fight inequality during the first two years of the pandemic. It reviews the spending, tax and labour policies and actions of 161 governments during 2020–2022. Its findings show clear lessons for governments now grappling with inflation and the cost-of-living crisis.
Co-authors Matthew Martin, Director at Development Finance International, and Max Lawson, Global Policy Lead Inequality for Oxfam, are available for interviews.
Dozens of civil society organizations have joined in a campaign to #EndAusterity. In a report they warned for a post-pandemic austerity shock. Oxfam senior policy advisor Nabil Abdo is available for interviews.
In the run up to the World Bank Annual Meeting, Oxfam launched its report Unaccountable Accounting on October 3, highlighting the inaccuracy of World bank’s accounting of climate finance. Poor countries may not be getting the crucial climate funding they need to survive. Oxfam’s climate change policy lead, Nafkote Dabi is available for interviews.
Oxfam Aotearoa reaction to New Zealand’s ranking can be found here.

G7 failure to tackle hunger crisis will leave millions to starve

June 28, 2022

Responding to news of the US$4.5 billion pledge made by the G7 leaders to tackle global hunger, Max Lawson, Head of Inequality Policy at Oxfam said:

“Faced with the worst hunger crisis in a generation, the G7 have simply failed to take the action that is needed. Many millions will face terrible hunger and starvation as a result.’

‘Instead of doing what is needed, the G7 are leaving millions to starve and cooking the planet.’

‘The G7 say themselves that 323 million people are on the brink of starvation, because of the current crisis, a new record high. Nearly a billion people, 950 million are projected to be hungry in 2022. We need at least US$28.5 billion more from the G7 to finance food and agriculture investments to end hunger and fill the huge gap in UN humanitarian appeals. The US$4.5 billion announced is a fraction of what is needed. The G7 could have done so much more here in Germany to end the food crisis and prevent hunger and starvation worldwide.’

‘The G7 weakening of their commitment to stop public money subsidising planet killing fossil fuels is appalling and makes climate breakdown ever more real. This is further exacerbated by their lack of progress in delivering promised finance to support climate action in developing countries.’

‘The G7 refusal to heed the call of last year’s UN climate summit to strengthen their weak targets to cut emissions sends out a terrible signal to the rest of the World, especially to vulnerable communities already suffering the impacts of the worsening climate crisis.’

Food and hunger

‘Pledging more money is just part of what the G7 could do to end hunger. They could ban biofuels. They could cancel debts of poor nations. They could tax the excess profits of food and energy corporates. Most importantly they could have tackled the economic inequality and climate breakdown that is driving this hunger. They failed to do any of this, despite having the power to do so.’

‘‘For every dollar in aid given, poor countries have to pay back US$2 dollars to their creditors, often banks in New York or London making huge profits. The G7 should have cancelled those debts to enable countries to spend money instead on feeding their people.’

‘The G7 was held in the same location in Germany in 2015, where a commitment was made to lift 500 million people out of hunger. Seven years later and in fact there are as many as 335 million more hungry people in the world. We urgently need new approaches to addressing hunger that start with addressing underlying drivers such as economic inequality and climate breakdown. Current efforts are woefully inadequate.”

‘Corporate profits have soared during COVID-19 and the number of billionaires has increased more in 24 months than it did in 23 years. This food crisis is big business.’

‘The G7 had the opportunity to tax the big winners from the crises. The energy and food corporations are making huge profits, creating 62 new food billionaires. They could have agreed to coordinated windfall taxes to fight this crisis and missed a huge opportunity to do so.’

“What we need to see a clear action plan with a new funding not just from traditional donors, but from companies and others that have profited from the current spike in energy and food prices to address the underlying causes of global food insecurity and hunger. It should be clear that the recently launched Global Alliance for Food Security (GAFS) will complement, rather than undermine existing institutions responsible for global coordination of food and agriculture, including the Committee on World Food Security which plays a key role in policy setting. There is a need to clarify what concrete measures will be proposed under this initiative, and ensure sufficient funding is attached to it to ensure it can deliver.”

“In addition, G7 need to fund the US$46 billion global humanitarian appeal which, despite increasing five-fold in the last decade, is only 20 percent funded today. They should agree to fill this funding gap of US$37 billion immediately.”

Climate

The G7 commitments to largely decarbonise their power sectors by 2035 and their road sector by 2030 point into the right direction but should have been stronger, and a much-needed 2030 coal phase out date is missing.

We welcome the initial steps towards Just Transition Energy Partnerships with Indonesia, India, Senegal and Vietnam as such partnerships can create predictability and reliability. Yet, those partnerships need to be backed up by financial commitments to make them effective, and the design and implementation of such partnerships must involve local communities and vulnerable populations from the beginning, based on truly participatory, inclusive and gender just approaches.

COVID-19

Despite the growing danger of new COVID-19 variants, and the failure to deliver even half of the vaccines they promised a year ago at the Carbis Bay Summit in the UK a year ago. Only 18 percent of the poorest countries are fully vaccinated. The G7 continue to defend the monopolies and intellectual property of their pharmaceutical corporations over supporting developing countries to make their own, generic vaccines.

‘What a difference a year makes. The G7 want us to think COVID-19 is over, and the ongoing global health crisis doesn’t exist. Tell that to the many millions yet to have a single vaccine, and the many still dying from this cruel disease.’

Notes to Editors

West Africa is currently facing its worst food crisis in a decade, with 27 million people going hungry. This number could rise to 38 million – an unprecedented level – unless urgent action is taken.
In East Africa, one person is estimated to be dying of hunger every 48 seconds in drought-ravaged Ethiopia, Kenya and Somalia, as actions have remained too slow and too limited to prevent the hunger crisis from escalating. The rainfall deficit in the most recent rainy season in these three countries has been the most severe in at least 70 years.
In Yemen and Syria, protracted conflicts have shattered people’s livelihoods. In Yemen, more than 17 million people – over half of the population – don’t have enough food, and pockets of the country are experiencing famine-like conditions. In Syria, six out of 10 Syrians – 12.4 million people – are struggling to put food on the table. This means many families are resorting to extreme measures to cope: going into debt to buy food, taking children out of school to work, and reducing the number of meals they have each day. Marrying off young daughters so there is one less mouth to feed has become another negative coping strategy.
The FAO State of the World’s Food Security report 2021 (page 10) shows that 615 million people were hungry in 2015. The WFP are now talking about as many as 950 million in hunger this year, 2022. The difference between these two is 335 million. When they last met in Germany in 2015, the G7 made the following declaration in their communique:
‘As part of a broad effort involving our partner countries, and international actors, and as a significant contribution to the Post 2015 Development Agenda, we aim to lift 500 million people in developing countries out of hunger and malnutrition by 2030.’
According to the UN OCHA Financial Tracking Service there is a US$37 billion funding shortfall in humanitarian appeals. According to the Ceres2030: Sustainable Solutions to End Hunger report, which sets out a 10-year plan to eradicate hunger, an additional US$330 billion is needed over 10 years and that the donor funding gap over this period is US$140 billion, so US$14 billion per year. Adding US$37 billion and US$14 billion gives us a total of US$51 billion each year.
The G7 share of total aid is around 65 percent, so the G7 share of this figure is US$33 billion. They promised US$4.5 billion, leaving a shortfall of US$28.5 billion.

Footing the Bill Report

June 7, 2022

800 percent increase in UN appeal needs for extreme weather-related emergencies – new Oxfam research.

The amount of money needed for UN humanitarian appeals involving extreme weather events like floods or drought is now eight times higher than 20 years ago — and donors are failing to keep up, reveals a new Oxfam brief today. For every US$2 needed for UN weather-related appeals, donor countries are only providing US$1.

Average annual extreme weather-related humanitarian funding appeals for 2000-2002 were at least US$1.6 billion and rose to an average US$15.5 billion in 2019-2021, an 819 percent increase.

Rich countries responsible for most of today’s climate change impacts have met only an estimated 54 percent of these appeals since 2017, leaving a shortfall of up to US$33 billion.

The countries with the most recurring appeals against extreme weather crises — over ten each — include Afghanistan, Burkina Faso, Burundi, Chad, Democratic Republic of Congo, Haiti, Kenya, Niger, Somalia, South Sudan and Zimbabwe.

The report, Footing the Bill, says that the increasing frequency and intensity of extreme weather events due to climate change is putting more pressure on an already over-stretched and underfunded humanitarian system. The costs of the destruction from these storms, droughts and floods are also increasing inequality; people in poorer communities and low-income countries are the worst hit yet they lack the systems and funding that wealthier countries have to cope with the effects. The richest one percent of people on Earth are emitting twice as much carbon pollution as the poorest half of humanity.

The UN appeals focus on the most urgent humanitarian needs, but that barely scratches the surface of the real costs in loss and damage that climate change is now wreaking on countries’ economies.

The economic cost of extreme weather events in 2021 alone was estimated to be US$329 billion globally, the third highest year on record. This is nearly double the total aid given by rich nations to the developing world that year.

The costs of loss and damage to low- and middle-income countries — for instance, the money needed to rebuild homes and hospitals or provide shelter, food and emergency cash transfers after a cyclone — could reach between US$290 billion and US$580 billion a year by 2030. This does not account for non-economic losses such as the loss of life, cultures and ways of living, and biodiversity.

UN appeals represent just a small part of the costs of climate disasters for people who are especially vulnerable and they only reach a fraction of the people who are suffering. Oxfam’s research shows that UN appeals cover only about 474 million of the estimated 3.9 billion people in low- and middle-income countries affected by extreme weather-related disasters since 2000, equivalent to one in eight people.

“Human activity has created a world 1.1˚C warmer than pre-industrial levels and we are now suffering the consequences. More alarming still, we will overshoot the 1.5˚C safety threshold on current projections. The cost of climate destruction will keep rising and our failure now to cut emissions will have catastrophic consequences for humanity. We can’t ignore the huge economic and non-economic losses and damages that underlie this picture — the loss of life, homes, schools, jobs, culture, land, Indigenous and local knowledge, and biodiversity,” said Oxfam Aotearoa Climate Campaign Lead Alex Johnston.

“This is the climate chaos we have long been warning about. Many countries that are being hardest-hit by climate change are already facing crises including conflict, food inflation, and the economic impact of the COVID-19 pandemic. This is leading to rapidly rising inequality, mass displacement, hunger and poverty,” said Johnston.

Humanitarian disasters affect men differently than women, who face long-standing inequalities that undermine their ability to cope. Women’s rights and progress towards gender equity are threatened with every disaster. The UNDP estimates that 80 percent of people being displaced by climate change are women.

“Poor countries cannot be expected to foot the bill, and increasing aid — while helpful — is not alone the answer. Paying the cost of climate-driven loss and damages should be on the basis of responsibility — not charity. Rich countries, rich people and big corporations most responsible for causing climate change must pay for the harm they are causing,” said Johnston.

Rich and industrialised countries have contributed around 92 percent of excess historical emissions and 37 percent of current emissions. Africa’s current emissions stand at just 4 percent; The Pacific Islands account for only 0.03 percent of global greenhouse gas emissions.

Kenya, Somalia, South Sudan and Ethiopia — where more than 24.4 million people now face severe levels of hunger and food insecurity — are together responsible for just 0.1 percent of current global emissions.

Rich industrialised nations have stymied loss and damage finance negotiations for years. At COP26 in Glasgow, they rejected developing countries’ calls for a new finance facility to address loss and damage and instead agreed to a three-year ‘Glasgow Dialogue’ to discuss future arrangements. “This just added insult to injury,” Johnston said.

Ahead of 56th sessions of the UNFCCC Subsidiary Body for Implementation (SBI) in Germany, which includes the first ‘Glasgow Dialogue’ on loss and damage since COP26, Oxfam urges:

Rich country governments like Aotearoa New Zealand to pledge bilateral finance to address loss and damage, in addition to existing climate finance and ODA commitments.
All governments to agree to establish and fund a finance facility for loss and damage at COP27, with annual contributions based on responsibility for causing climate change and capacity to pay.
All governments to agree to make loss and damage a core element of the UNFCCC’s Gender Action Plan.

Notes

Photos and video from Burkina Faso are available for download.

Download Oxfam’s brief Footing the Bill and our methodology note.

See also Oxfam Aotearoa and Oxfam Australia’s 2021 report titled Breaking Through Red Lines which outlines the loss and damage implications across the Pacific, and also includes loss and damage Māori communities within Aotearoa are experiencing due to climate destruction. The Pacific Islands is responsible for just 0.03 percent of global greenhouse gas emissions.

The countries with the most recurring appeals linked to extreme weather (Afghanistan, Burkina Faso, Burundi, Democratic Republic of Congo, Haiti, Kenya, Niger, Somalia, South Sudan, Uganda, Chad, Sudan and Zimbabwe) account for 1.4 percent of global emissions.

According to Aon, the total economic cost of extreme weather events in 2021 is estimated at US$329 billion globally, the third-highest year on record, behind 2017 and 2005.

Recent data from Oxfam shows that the wealthiest 1 percent of humanity are responsible for twice as many emissions as the poorest 50 percent, and that by 2030, their carbon footprints are in fact set to be 30 times greater than the level compatible with the 1.5°C goal of the Paris Agreement.

Rich nations provided US$178.9 billion in official development assistance (ODA) in 2021. This is equivalent to 0.33 percent of donors’ combined gross national income (GNI) and still below the UN target of 0.7 percent ODA to GNI.

According to estimations by Markandya and González-Eguino, the estimated costs of loss and damage by 2030 range from US$290 billion to US$580 billion, and according to Climate Analytics from US$400 to US$431 billion.

One person is likely dying of hunger every 48 seconds in drought-ravaged Ethiopia, Kenya and Somalia.

Dangerous Delay 2 Report: The cost of inaction

May 19, 2022

One person likely dying from hunger every 48 seconds in drought-ravaged East Africa as world again fails to heed warnings

One person is likely dying of hunger every 48 seconds in drought-ravaged Ethiopia, Kenya and Somalia, according to estimates by Oxfam and Save the Children in a report published today highlighting the world’s repeated failure to stave off preventable disasters.

More than a decade since the delayed response to the 2011 famine that killed more than 260,000 people in Somalia – half of them children under five – the world is once again failing to avert catastrophic hunger in East Africa. Today, nearly half a million people across parts of Somalia and Ethiopia are facing famine-like conditions. In Kenya, 3.5 million people are suffering extreme hunger. Urgent appeals are woefully funded, as other crises, including the war in Ukraine, are worsening the region’s escalating hunger crisis.

The number of people experiencing extreme hunger in the three countries has more than doubled since last year – from over 10 million to more than 23 million today. This is against a backdrop of crippling debt that more than tripled in under a decade – from $20.7 billion in 2012 to $65.3 billion by 2020 – sucking these countries’ resources from public services and social protection.

The report, Dangerous Delay 2: The Cost of Inaction, supported by the Jameel Observatory, examines the changes in the humanitarian aid system since 2011. It finds that despite an improved response to the 2017 East Africa drought when widespread famine was averted, the national and global responses have largely remained too slow and too limited to prevent a repeat today.

“Despite worsening warning signs over time, world leaders have responded woefully – too late and still too little – leaving millions of people facing catastrophic hunger. Starvation is a political failure”, said Gabriela Bucher, Oxfam International’s Executive Director.

Entrenched bureaucracies and self-serving political choices continue to curtail a unified global response, despite improved warning systems and efforts by local NGOs, the report finds.

G7 and other rich nations have turned inwards in response to various global crises, such as COVID-19 and more recently the Ukraine conflict, including by backtracking on their promised aid to poor countries and driving them to edge of bankruptcy with debt.

East African governments bear their own responsibility, having delayed their responses and often refused to acknowledge the scale of the crisis on their doorsteps. They have not adequately invested in agriculture or social protection systems to help people better cope with the drivers of hunger, including climatic and economic shocks.

The report sheds light on the continued failure of donors and aid agencies to prioritise local organisations at the forefront of the crisis response, which slowed down the response further, even when they were ready to act.

Climate-induced drought, compounded by conflicts forcing people out of their homes, and COVID-19 economic turmoil, has decimated people’s last ability to cope. The Ukraine conflict has also driven already soaring food prices to their highest level ever recorded, making food unattainable for millions.

Save the Children’s Regional Spokesperson for East and Southern Africa, Kijala Shako, said: “We’re seeing horrific numbers of severe malnutrition with close to 5.7 million children facing acute malnutrition through the end of this year. And with the UN warning that more than 350,000 could die if we do not act, the clock is ticking and every minute that passes is a minute too close to starvation and possible death of a child. How can we live with that if we let it happen again?”

Jane Meriwas, the director of Samburu Women Trust in Kenya, said: “The situation is devastating. Both human beings and livestock are at risk of dying, already children, pregnant mothers and elderly in some parts of Marsabit and Samburu Counties in Kenya are being reported as dying. If urgent intervention is not provided now, we are likely to witness even more death”.

Climate change has made this La Niña-induced drought in the Horn of Africa more severe and prolonged, now the worst in 40 years. The drought has eroded economic reserves, herd size, and human health and is a major factor behind the alarming numbers of people without enough to eat daily. Yet, the region is one of the least responsible for the climate crisis, emitting collectively 0.1% of global carbon emissions.

“There are no cows left. They all died. We have a few camels and goats that have survived the drought, but we are afraid we might lose them if the drought continues. We are afraid that people will start dying of famine as there is no food,” said Ahmed Mohamud, a pastoralist from Wajir, Kenya.

Just two per cent ($93.1 million) of the current $4.4bn UN appeal for Ethiopia, Kenya and Somalia has formally been funded to date. In 2017, those same countries had received $1.9 billion in emergency funding. Although donors promised $1.4 bn of aid last month, it is shameful that only $378 million of that was new money.

“People are starving not because the world lacks food or money, but for a dismal lack of political courage. Rich nations successfully, and rightly, raised over $16bn in one month to address the terrible crisis in Ukraine. They pumped over $16 trillion dollars into their economies in response to COVID-19 to support those in need. Countries can mobilize resources to prevent human suffering – but only if they choose to,” said Bucher.

“Donors, development agencies, governments and the private sector must work together with affected communities to prepare and respond to risks, rather than wait for crises to spiral out of control,” says Guyo Roba, Head of the Jameel Observatory.

Oxfam and Save the Children are calling for urgent action to tackle the catastrophic hunger crisis in East Africa:

To help save lives now, G7 and Western leaders must immediately inject money to meet the $4.4 billion UN appeal for Kenya, Ethiopia and Somalia, and ensure the funding is flexible enough to be used where it is most needed.
Donors must guarantee that at least 25 per cent of funds go to local responders at the heart of response.
Governments of Kenya, Ethiopia and Somalia must scale up social protection to help people cope with multiple shocks. They should invest at least 10 per cent of their budgets in agriculture, with a particular focus on smallholder and female farmers, as they had agreed in the African Union Malabo Declaration of 2014.
National governments must prioritize lives over politics, by acknowledging and acting on early warnings. They should be quicker to declare national emergencies, shift national resources to those most in need, and invest in response to climate related shocks.
Rich polluting nations must pay East Africa for its climate loss and damage. They must also cancel 2021-2022 debts for those countries, in order to free up resources to support people to mitigate and adapt to climate shocks.

Acting early on hunger not only saves lives but prevents economic loss. USAID estimates that every dollar invested in early response and resilience in Somalia saves three dollars by preventing income and livestock losses.

Notes to the editor

Download the latest “Dangerous Delay 2: The Cost of Inaction.” report published 18 May 2022.
Download “A Dangerous Delay: The cost of late response to early warnings in the 2011 drought in the Horn of Africa” report published in 2012.
To calculate the daily deaths, we used the crude death rate, which is (0.5-0.99) per 10,000 people in IPC3 of food insecurity as specified in The Integrated Food Security Phase Classification (IPC) Global Partners (2021), as per Technical Manual Version 3.1: Evidence and Standards for Better Food Security and Nutrition Decisions. Then, we subtracted the normal daily death rate of 0.22 per 10,000 people per day; this figure is based on data from the UN and from national, EU, and Pacific Community statistical offices.
Across the three countries, the crude death rate is at least 627-1,802 per day, 0.44-1.25 per minute, i.e., between one every 2.5 minutes and one every 48 seconds. These figures are conservative, since they are based on the crude death rate for IPC 3, and do not take into account the higher crude death rates for IPC 4 and 5.
According to IPC (see IPC Population Tracking Tool, and the FAO-ICPAC Food Security and Nutrition Working Group, 22.4 – 23.4m people across Kenya, Somalia and Ethiopia will face high levels of acute hunger (IPC3 and above), including almost half a million in famine-like conditions. This includes: 7.4 million people across Ethiopia (as per the projection for July-September 2021) – including over 400,000 living in famine-like conditions (IPC 5); 5.5-6.5 million people in South East Ethiopia (April 2022 estimate), 3.5 million people from Kenya (March-June 2022 projection); and 6 million people are from Somalia, including 81,100 at IPC5 (April-June 2022 projection).
In May-June 2021, the total number of people in IPC3+ across Kenya, Ethiopia, and Somalia was 10,2 million, according to IPC Trackking tool. This includes 5.5 million people at IPC 3 or higher in the Afar, Amhara, and Tigray Regions of Ethiopia (including 353,000 at IPC 5); 2 million in Kenya and 2.7 million in Somalia, for a total of 10.2 million. This figure does not take into account other regions of Ethiopia.
Children malnutrition figures from April 2022 Horn of Africa Drought update
According to FAO, global food prices reached an all-time high in March 2022, on average, the cost of a local food basket has increased by 23 percent across the entire Eastern Africa region in one year (Feb 2021/2022). But Ethiopia and Somalia have seen 66 and 36 percent rise in their food basket cost between Feb2021/2022. Source: WFP’s “Implications of Ukraine Conflict on Food Access and Availability in the Eastern Africa Region”, Update #2, Mar 2022
Comparative data between the 2011 famine and 2022 shows that 9 million people in Ethiopia, Kenya, and Somalia experienced acute hunger (IPC 3+), today that figure is between 22.4 and 23.4 million people, according to UNOCHA and IPC info.
The Ukraine crisis received $6.7bn (in non-military aid) from USA, and the EU Stand for Ukraine initiative was over 10bn euros to date.
In the COVID-19 emergency, governments used the budget promptly and decisively. Since 2020, countries have announced $16 trillion in fiscal actions. Source: IMF 2021
The world’s farmers produce more than enough food to feed everyone (see UN SDG news ).
Global carbon emissions are from Our World in Data .
Data on debt from the World Bank International Debt Statistics.
Data on UN humanitarian appeals and donor funding are from the UN Office for the Coordination of Humanitarian Affairs Financial Tracking Service as of 4 May 2022.