Oxfam logo
The Future is Equal
Oxfam logo in green

inequality

G7 failure to tackle hunger crisis will leave millions to starve

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

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

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

IMF must abandon demands for austerity as cost-of-living crisis drives up hunger and poverty worldwide

87 percent of the International Monetary Fund’s (IMF) COVID-19 loans are requiring developing countries that have been denied equal access to vaccines and are facing some of the world’s worst humanitarian crises to adopt tough, new austerity measures that will further exacerbate poverty and inequality.

New analysis by Oxfam finds that 13 out of the 15 IMF loan programs negotiated during the second year of the pandemic require new austerity measures such as taxes on food and fuel or spending cuts that could put vital public services at risk. The IMF is also encouraging six additional countries to adopt similar measures.

In 2020, the IMF deployed billions in emergency loans to help developing countries cope with COVID-19, often with few conditions or none at all. Recently, IMF chief Kristalina Georgieva urged Europe not to endanger its economic recovery with “the suffocating force of austerity”. Yet, over the past year, the IMF has gone back to imposing austerity measures on lower-income countries.

“This epitomizes the IMF’s double standard: it is warning rich countries against austerity while forcing poorer ones into it. The pandemic is not over for most of the world. Rising energy bills and food prices are hurting poor countries most. They need help boosting access to basic services and social protection, not harsh conditions that kick people when they are down”, said Nabil Abdo, Oxfam International’s Senior Policy Advisor.

  • Kenya and the IMF agreed a US$2.3 billion loan program in 2021, which includes a three-year public sector pay freeze and increased taxes on cooking gas and food. More than 3 million Kenyans are facing acute hunger as the driest conditions in decades spread a devastating drought across the country. Nearly half of all households in Kenya are having to borrow food or buy it on credit.
  • 9 countries including Cameroon, Senegal and Surinam are being required to introduce or increase the collection of value-added taxes (VAT), which often apply to everyday products like food and clothing, and fall disproportionately on people living in poverty.
  • Sudan, where nearly half of the population is living in poverty, has been required to scrap fuel subsidies which will hit the poorest hardest. The country was already reeling from international aid cuts, economic turmoil and rising prices for everyday basics such as food and medicine before the war in Ukraine started. Over 14 million people need humanitarian assistance (almost one in every three people) and 9.8 million are food insecure in Sudan, which imports 87 percent of its wheat from Russia and Ukraine.
  • 10 countries including Kenya and Namibia are likely to freeze or cut public sector wages and jobs, which could mean lower quality of education and fewer nurses and doctors in countries already short of healthcare staff. Namibia had fewer than six doctors per 10,000 people when COVID-19 struck.

New analysis by Oxfam and Development Finance International (DFI) also published today reveals that 43 out of 55 African Union member states face public expenditure cuts totaling US$183 billion over the next five years. If these cuts are implemented, their chances of achieving the UN’s Sustainable Development Goals will likely disappear. In 2021, an Oxfam review of IMF COVID-19 loans showed that the Fund encouraged 33 African countries to pursue austerity policies in the aftermath of the health crisis. The pandemic has not ended but these policies are already taking shape across Africa.

The analysis also shows that African governments’ failure to tackle inequality ― through support for public healthcare and education, workers’ rights and a fair tax system ― left them woefully ill-equipped to tackle the COVID-19 pandemic. The IMF has contributed to these failures by consistently pushing a policy agenda that seeks to balance national budgets through cuts to public services, increases in taxes paid by the poorest, and moves to undermine labor rights and protections. As a result, when COVID-19 struck, 52 percent of Africans lacked access to healthcare and 83 percent had no safety nets to fall back on if they lost their job or became sick.

“The IMF must suspend austerity conditions on existing loans and increase access to emergency financing. It should encourage countries to increase taxes on the wealthiest and corporations to replenish depleted coffers and shrink widening inequality. That would actually be good advice”, said Abdo.

 

Notes to editors

Download Oxfam and DFI’s “Commitment to Reducing Inequality Index: Africa”. Our analysis of the IMF’s COVID-19 loans during the first year of the pandemic is also available for download.

Oxfam estimates that over a quarter of a billion more people could crash into extreme levels of poverty in 2022 because of COVID-19, rising global inequality and the shock of food price rises supercharged by the war in Ukraine. For more information, download Oxfam’s brief “First Crisis, Then Catastrophe”.

The IMF negotiated 22 COVID-19 loans with 23 countries between 15 March 2021 and 15 March 2022. 15 are loan programs that came with a full suite of conditionality or policy requirements, six are conditionality-free emergency financing and one is a Flexible Credit Line that does not usually include conditionalities. The IMF’s USUS$1.4 billion (SDR 1,005.9 million) disbursement to Ukraine was not included in Oxfam’s analysis, as it intended to help meet urgent financing needs and mitigate the economic impact of the war.

In December 2021, IMF managing director Kristalina Georgieva told Euronews that the European Union should not put economic recovery in danger with “the suffocating force of austerity”.  The IMF’s own research shows austerity worsens poverty and inequality.

Photographs and video from East Africa are available. As many as 28 million people across East Africa at risk of extreme hunger. West Africa is facing its worst food crisis in ten years, with over 27 million people suffering from hunger.

According to Sudan’s latest household survey (2014), 44 percent of the population lives in poverty. However, this data does not reflect the impacts of the recent economic decline, high inflation and recent flooding. The IMF estimates that the ongoing economic crisis, exacerbated by COVID-19, will likely have significantly negative effects on living conditions and poverty.

According to the World Food Program, 9.8 million people in Sudan are food insecure. 14.3 million are estimated to need humanitarian assistance in 2022 — the highest in the past decade.

According to the World Bank, Namibia had 0.59 doctors per 1,000 people before the pandemic began.

Add link when available. [AT1]

“Terrifying prospect” of over a quarter of a billion more people crashing into extreme levels of poverty and suffering this year

Over a quarter of a billion more people could crash into extreme levels of poverty in 2022 because of Covid-19, rising global inequality and the shock of food price rises supercharged by the war in Ukraine, reveals a new Oxfam brief today.  

“First Crisis, Then Catastrophe”, published ahead of the World Bank and IMF Spring Meetings in Washington DC, shows that 860 million people could be living in extreme poverty — on less than US$1.90 a day — by the end of this year. This is mirrored in global hunger: the number of undernourished people could reach 827 million in 2022. 

The World Bank had projected COVID-19 and worsening inequality to add 198 million extreme poor during 2022, reversing two decades of progress. Based on research by the World Bank, Oxfam now estimates that rising global food prices alone will push 65 million more people into extreme poverty, for a total of 263 million more extreme poor this year —equivalent to the populations of the UK, France, Germany and Spain combined. 

“Without immediate radical action, we could be witnessing the most profound collapse of humanity into extreme poverty and suffering in memory,” said Oxfam International Executive Director Gabriela Bucher. “This terrifying prospect is made more sickening by the fact that trillions of dollars have been captured by a tiny group of powerful men who have no interest in interrupting this trajectory.” 

As many people struggle now to cope with sharp cost-of-living increases, having to choose between eating or heating or medical bills, the likelihood of mass starvation faces millions of people already locked in severe levels of hunger and poverty across East Africa, the Sahel, Yemen and Syria.  

The brief notes that a wave of governments is nearing a debt default and being forced to slash public spending to pay creditors and import food and fuel. The world’s poorest countries are due to pay US$43 billion in debt repayments in 2022, which could otherwise cover the costs of their food imports. Global food prices hit an all-time high in February, surpassing the peak crisis of 2011. Oil and gas giants are reporting record-breaking profits, with similar trends expected to play out in the food and beverage sector.   

People in poverty are being hit harder by these shocks. Rising food costs account for 17 percent of consumer spending in wealthy countries, but as much as 40 percent in Sub-Saharan Africa. Even within rich economies, inflation is super-charging inequality: in the US, the poorest 20 percent of families are spending 27 percent of their incomes on food, while the richest 20 percent spend only 7 percent. 

For most workers around the world, real-term wages continue to stagnate or even fall. The effects of COVID-19 have widened existing gender inequalities too — after suffering greater pandemic-related job losses, women are struggling to get back to work. In 2021, there were 13 million fewer women in employment compared to 2019, while men’s employment has already recovered to 2019 levels. 

The report also shows that entire countries are being forced deeper into poverty. COVID-19 has stretched all governments’ coffers but the economic challenges facing developing countries are greater, having been denied equitable access to vaccines and now being forced into austerity measures.  

Despite COVID-19 costs piling up and billionaire wealth rising more since COVID-19 than in the previous 14 years combined, governments — with few exceptions — have failed to increase taxes on the richest. An annual wealth tax on millionaires starting at just 2 percent, and 5 percent on billionaires, could generate US$2.52 trillion a year —enough to lift 2.3 billion people out of poverty, make enough vaccines for the world, and deliver universal healthcare and social protection for everyone living in low- and lower middle-income countries. 

“We reject any notion that governments do not have the money or means to lift all people out of poverty and hunger and ensure their health and welfare. We only see the absence of economic imagination and political will to actually do so,” Bucher said. 

“Now more than ever, with such scale of human suffering and inequality laid bare and deepened by multiple global crises, that lack of will is inexcusable and we reject it. The G20, World Bank and IMF must immediately cancel debts and increase aid to poorer countries, and together act to protect ordinary people from an avoidable catastrophe. The world is watching”. 

Oxfam is calling for urgent action to tackle the extreme inequality crisis threatening to undermine the progress made in tackling poverty during the last quarter of a century: 

  • Introduce one-off and permanent wealth taxes to fund a fair and sustainable recovery from COVID-19. Argentina adopted a one-off special levy dubbed the ‘millionaire’s tax’ that has brought in around US$2.4 billion to pay for pandemic recovery. 
  • End crisis profiteering by introducing excess profit taxes to capture the windfall profits of big corporations across all industries. Oxfam estimated that such a tax on just 32 super-profitable multinational companies could have generated US$104 billion in revenue in 2020. 
  • Cancel all debt payments for developing countries that need urgent help now. Cancelling debt would free up more than US$30 billion in vital funds in 2022 alone for 33 countries already in or at high risk of debt distress. 
  • Boost aid and pay for Ukrainian assistance and the costs of hosting refugees with new funding, rather than shift aid funds earmarked for other crises in poorer countries. 
  • Reallocate at least US$100 billion in Special Drawing Rights (SDR), without burdening countries with new debt or imposing austerity measures. The G20 promised to deliver US$100 billion in recycled SDRs but only US$36 billion has been committed to date. A new SDR issuance should also be considered and distributed based on needs rather than countries’ quota shares at the IMF.  
  • Act to protect people from rising food prices, and create a Global Fund for Social Protection to help the poorest countries provide essential income security for their populations, and maintain these services in times of severe crisis. 

 

Notes to editors 

Download Oxfam’s briefing “First Crisis, Then Catastrophe”. 

The World Bank defines extreme poverty as living on less than US$1.90 per day. 

The World Bank projected that COVID-19 will increase the number of people living in extreme poverty by 198 million people in 2022. This projection assumes that the Gini coefficient of income inequality will increase by two percent in all countries. The IMF, World Bank and OECD agree that COVID-19 is highly likely to drive up inequality. 

New Oxfam estimates, building on World Bank projections and prior research conducted by the World Bank and Center for Global Development on food price spikes, show that 65 million more people could be pushed below the US$1.90 poverty line because of the harsh increases in food prices. See “First Crisis, Then Catastrophe” for more information. 

Population of Germany (83 million), France (67 million), the UK (67 million) and Spain (47 million) from the World Bank. Total: 264 million. 

Photographs and video from East Africa are available. As many as 28 million people across East Africa at risk of extreme hunger.  

Data on debt servicing is from UNCTAD. FAO estimates food import bills for all low-income countries to be $46 billion (2021).  

The COVID-19 crisis cost women around the world at least $800 billion in lost income in 2020, equivalent to more than the combined GDP of 98 countries. 

Billionaires’ wealth has risen more since COVID-19 began than it has in the last 14 years combined. 

Download “Taxing Extreme Wealth” for more information about an annual tax on the world’s millionaires and billionaires, what it would raise and what it could pay for.   

Argentina has collected 223 billion pesos (around $2.4 billion) from its one-off pandemic wealth tax. 

Oxfam estimated that a ‘Pandemic Profits Tax’ on 32 super-profitable global companies could have generated $104 billion in revenue in 2020 to address COVID-19. Download Oxfam’s report “Power, Profits and the Pandemic” for more information. 

Some governments are contemplating raids on aid funds earmarked for other crises to pay for the new costs of Ukrainian support. Oxfam is aware that the EU has more than halved its humanitarian funding to Timor-Leste, for example, and that some donors have indicated that they will cut their aid to Burkina Faso by 70 percent, with other West African countries hearing similar news. At the same time, West Africa is facing its worst food crisis in ten years, with over 27 million people suffering from hunger. 

SDRs are distributed based on countries’ quota shares at the IMF. As such, the US$650 billion SDR issuance delivered almost US$400 billion in added reserves to the world’s richest economies, US$230 billion to middle-income countries, and US$21 billion to low-income countries. Last October, G20 countries pledged to reallocate $100 billion in SDRs to “vulnerable countries whose economies have been hard hit by the COVID-19 crisis.”  

Oxfam reacts to Pfizer’s financial results on COVID-19 vaccine sales

In response to the publication of Pfizer’s financial results on COVID-19 vaccine sales for last year and projections for its Covid-19 vaccine and antiviral pill this year, Oxfam’s Robbie Silverman said:

“Pfizer’s results today are clear evidence of how the company has used its monopoly to enrich its shareholders at the expense of almost half the world’s population who still have no access to lifesaving vaccines.

“Millions are dying from COVID because companies like Pfizer have prioritised profits over saving lives. And it’s paying off for Pfizer, raking in as much as US$1 million every hour in profit. 

“It is obscene that we have allowed pharmaceutical companies like Pfizer to put their profits before the good of humanity as the pandemic drags on. No corporations should decide who lives and who dies.”

 

Notes:

  • The latest data (from Dec 21) available shows that just one percent of Pfizer’s vaccines have been delivered to low-income countries.
  • Oxfam estimates Pfizer is making over US$1m an hour profit from the vaccine alone.
  • Pfizer and the other drugs companies are unable to produce enough vaccines for the world. Oxfam has issued a shareholder filing calling on Pfizer to study the feasibility of transferring vaccine technology and know-how so that production can urgently ramp up around the world.