Pre-Davos
report shows how 1% now own more than rest of us combined
From
Oxfam
This number
has fallen dramatically from 388 as recently as 2010 and 80 last year.
An
Economy for the 1%, shows that the wealth of the poorest half of the world's
population - that's 3.6 billion people - has fallen by a trillion dollars since
2010.
This 41 per cent drop has occurred despite the global population
increasing by around 400 million people during that period.
Meanwhile the
wealth of the richest 62 has increased by more than half a trillion dollars to
$1.76tr. Just nine of the '62' are women.
Although
world leaders have increasingly talked about the need to tackle inequality, the
gap between the richest and the rest has widened dramatically in the past 12
months. Oxfam's prediction - made ahead of last year's Davos - that the 1%
would soon own more than the rest of us by 2016, actually came true in 2015, a
year early.
As a priority, it is calling for an end to the era of tax
havens which has seen increasing use of offshore centres by rich individuals
and companies to avoid paying their fair share to society. This has denied
governments valuable resources needed to tackle poverty and inequality.
It
is three years since British Prime Minister David Cameron told Davos that he would lead a global
effort against aggressive avoidance in the UK and in poor countries, yet
promised measures to increase transparency in British Overseas Territories and
Crown Dependencies, such as the Cayman Islands and British Virgin Islands, have
not yet been implemented.
Mark
Goldring, Oxfam GB Chief Executive, said: "It is simply unacceptable that
the poorest half of the world population owns no more than a small group of the
global super-rich - so few, you could fit them all on a single coach.
"World
leaders' concern about the escalating inequality crisis has so far not
translated into concrete action to ensure that those at the bottom get their
fair share of economic growth. In a world where one in nine people go to bed
hungry every night we cannot afford to carry on giving the richest an ever
bigger slice of the cake.
"We
need to end the era of tax havens which has allowed rich individuals and
multinational companies to avoid their responsibilities to society by hiding
ever increasing amounts of money offshore.
"Tackling
the veil of secrecy surrounding the UK's network of tax havens would be a big
step towards ending extreme inequality. Three years after he made his promise
to make tax dodgers 'wake up and smell the coffee', it is time for David
Cameron to deliver."
Globally,
it is estimated that super-rich individuals have stashed a total of $7.6tr in
offshore accounts. If tax were paid on the income that this wealth generates,
an extra $190bil would be available to governments every year.
As
much as 30 percent of all African financial wealth is estimated to be held
offshore, costing an estimated $14billion in lost tax revenues every year. This
is enough money to pay for healthcare for mothers and children that could save
4 million children's lives a year and employ enough teachers to get every
African child into school.
Nine
out of ten WEF corporate partners have a presence in at least one tax haven and
it is estimated that tax dodging by multinational corporations costs developing
countries at least $100billion every year. Corporate investment in tax havens
increased almost quadrupled between 2000 and 2014.
At
the G8 in 2013, David Cameron promised that both the UK and the UK's Overseas
Territories and Crown Dependencies, would introduce public registers of
companies' owners in an effort to crack down on the use of shell companies to
avoid tax. The UK has fulfilled that promise but so far only one Overseas
Territory, Montserrat, and not a single Crown Dependency has followed suit.
Allowing
governments to collect the taxes they are owed from companies and rich
individuals will be vital if world leaders are to meet their new goal, set last
September, to eliminate extreme poverty by 2030.
Although
the number of people living in extreme poverty halved between 1990 and 2010,
the average annual income of the poorest 10 per cent has risen by less than
$3-a-year in the past quarter of a century. That equates to an increase in
individuals' daily income of less than a single cent a year.
Had
inequality within countries not grown between 1990 and 2010, an extra 200
million people would have escaped poverty.
One
of the other key trends behind rising inequality, set out in Oxfam's report is the falling share of national income
going to workers in almost all developed and most developing countries and a
widening gap between pay at the top and the bottom of the income scale. This
particularly affects women, who make up the majority of low paid workers around
the world.
By
contrast, the already wealthy have benefited from a rate of return on capital
via interest payments, dividends, etc, that has been consistently higher than
the rate of economic growth.
This advantage has been compounded by the use of
tax havens which are perhaps the most glaring example set out in the report of how the rules of the economic game have been
rewritten in a manner that has supercharged the ability of the rich and
powerful to entrench their wealth.
Action
to recover the missing billions lost to tax havens needs to be accompanied by a
commitment on the part of governments to invest in healthcare, schools and
other vital public services that make such a big difference to the lives of the
poorest people.
Governments
should also to make sure work delivers an acceptable standard of living for
those at the bottom as well as for those at the top - including moving minimum
wage rates towards a living wage and tackling the pay gap between men and
women.
Goldring
added: added: "Ending extreme poverty requires world leaders to tackle the
growing gap between the richest and the rest which has trapped hundreds of
millions of people in a life of poverty, hunger and sickness.
"It
is no longer good enough for the richest to pretend that their wealth benefits
the rest of us when the facts show that the recent explosion in the wealth of
the super-rich has come at the expense of the poorest."
