![]() |
![]() ![]() |
View previous stories | |
Top economists call for action on runaway global inequality by 200 leading economists from 67 countries Failure to tackle the widening gulf between the world’s rich and poor will entrench poverty and increase the risk of climate breakdown, a group of more than 200 leading economists have said. In a letter to the UN secretary general, Antonio Guterres, and the World Bank president, Ajay Banga, the signatories from 67 countries call on the two bodies to do more to reverse the sharpest increase in global inequality since the second world war. Reducing inequality by 2030 was one of the 17 UN sustainable development goals (SDGs) agreed by the international community in 2015. Global poverty and extreme wealth have been rising simultaneously. “The richest 10% of the global population currently takes 52% of global income, whereas the poorest half of the population earns 8.5% of it. Billions of people face the terrible hardship of high and rising food prices and hunger, whilst the number of billionaires has doubled in the last decade.” When Mr. Guterres reviewed the 2030 goals in April, he found inequality at a record high, with only 10% of countries on track to meet the target. Last October, the World Bank said progress in reducing poverty had come to a halt. Max Lawson, the head of inequality policy at Oxfam International, said: “Never has the fight to close the gap between the rich and the rest of us been more urgent. A dramatic increase in equality is the key to a better world, and to beating climate breakdown before it is too late.” Matthew Martin, the director of the campaign group Development Finance International, said: “If we don’t start measuring inequality properly now, we will never reduce it seriously by 2030.” July 2023 Open Letter to the United Nations Secretary-General and President of the World Bank - Setting Serious Goals to Combat Inequality Dear Secretary-General of the United Nations Antonio Guterres and President of the World Bank Ajay Banga, RE: Setting serious goals to combat inequality As a group of economists and leaders in the fight against extreme inequalities from around the world, we write to request your leadership towards ensuring that the United Nations Sustainable Development Goals and the World Bank back vital new strategic goals and indicators, that can redouble efforts to address rising extreme inequality. We are living through a time of extraordinarily high economic inequality. Extreme poverty and extreme wealth have risen sharply and simultaneously for the first time in 25 years. Between 2019 and 2020, global inequality grew more rapidly than at any time since WW2. The richest 10% of the global population currently takes 52% of global income, whereas the poorest half of the population earns 8.5% of it. Billions of people face the terrible hardship of high and rising food prices and hunger, whilst the number of billionaires has doubled in the last decade. We know that high inequality undermines all our social and environmental goals. The 2006 World Development Report, as well as multiple other studies, have shown that extreme inequality of the kind we are observing today has a destructive effect on society. It corrodes our politics, destroys trust, hamstrings our collective economic prosperity and weakens multilateralism. We also know that without a sharp reduction in inequality, the twin goals of ending poverty and preventing climate breakdown will be in clear conflict. In 2015, all the governments of the world made history by setting themselves a Sustainable Development Goal to reduce inequalities – “SDG10”. Yet since then, following the COVID-19 pandemic and now the global cost of living crisis inequalities have worsened, by many measures. SDG10 remains largely ignored. Equally troubling, the main SDG10 target, based on the World Bank’s Shared Prosperity goal, does not adequately measure or monitor key aspects of inequality. Evidence from household surveys shows that one in five countries showing a positive trend in Shared Prosperity simultaneously saw inequality by other measures, like the Palma Ratio, increase, including countries such as Mongolia, Chile and Vietnam. We have a critical opportunity to strengthen our resolve to reduce this deep divide and send a clear signal to people around the world that the institutions designed to serve them are serious about ending this crisis of extreme inequality. We must strengthen our existing goals. We must act this summer to secure agreement that the UN SDG 10 must also have strengthened targets and better metrics, looking at inequalities both between countries and within them by using indicators that track wealth as well as income inequality. We are pleased that the World Bank is reviewing its Shared Prosperity goal. The new leadership of the World Bank has an opportunity to strengthen this goal to assess inequalities across the entire spectrum of the income and wealth distribution. There have been significant advances in inequality data, such as more accurate estimates of top incomes, helping to enable a new generation of policy making rooted in a clear distributional analysis of the impact of policy changes. These need to be systematised and pushed further, to enable high-level inequality analysis by every government. This will be the only way to ensure broad political consensus for the transformation our economies must make to a zero-carbon future. Goals matter. Leadership matters. The Bank and UN SDGs are uniquely placed to offer the rallying call for a reduction in inequality that our divided world needs so urgently today. We ask you to seize this opportunity to back stronger goals and better metrics for both wealth and income, as well as wage shares of national income. Also, SDG10 is not a separate, standalone goal: all economic, financial, and social policies should be assessed in terms of their likely impact on this goal. This would clearly signal our collective ambition to forge a more equal world. http://equalshope.org/index.php/2023/07/17/setting-serious-goals-to-combat-inequality/ http://www.ips-journal.eu/topics/economy-and-ecology/taking-inequality-seriously-and-tackling-it-seriously-6874/ http://www.theguardian.com/inequality/2023/jul/17/top-economists-call-for-action-global-inequality-rich-poor-poverty-climate-breakdown-un-world-bank http://cic.nyu.edu/resources/president-of-namibia-chief-minister-of-sierra-leone-and-other-world-leaders-call-for-bolder-action-on-inequality-and-sdg10-at-unga/ http://www.sdg16.plus/resources/joint-statement-on-sdg-10/ * The latest World Inequality Report revealed that the richest 10 per cent of people in the world own 76 per cent of all wealth, while the poorest half have virtually none. Indeed, many are in debt, with ‘negative wealth’: http://wid.world/news-article/world-inequality-report-2022/ Visit the related web page |
|
Taxing super-profits to beat inflation, defend rights by Magdalena Sepulveda Global Initiative for Economic, Social and Cultural Rights Dec. 2022 Pandemics, wars and recessions do not exempt states from human-rights commitments. They must tax multinationals and the richest more to protect the most vulnerable. For many, it began with cancelling a doctor’s appointment, not buying clothes for their children, giving up on visiting relatives because of the cost of transport and paying only the most urgent bill. Quickly, they were forced to cut back on food, by reducing first quality and then quantity, then even skipping meals. Even though they are working and receiving a salary, today they find themselves lining up at food banks to feed their children and themselves. Everywhere, households are losing the inflation battle. Once their coping mechanisms are exhausted and nothing more can be dispensed, what remains are feelings of anguish and lack of control. No longer having a say in decisions affecting their lives, they are forced to depend on others, resulting in a loss of dignity. This is, in fact, a violation of their human rights. At the forefront of the victims of the cost-of-living crisis are, as always, the most vulnerable: children, women, the elderly, people with disabilities, minorities and migrants. In the United Kindgom, for example, 2.2 million more people have been forced this year to forgo expenditures essential to their wellbeing. The UK’s New Economics Foundation calculates that soaring costs weigh nine times more on the poorest than on the richest 5 per cent, in proportion to their income. In the United States, while 38 per cent of white households say they are facing serious financial problems, among Latino families the proportion rises to 48 per cent, hits 55 per cent for their black counterparts and peaks at 63 per cent among native Americans. Worldwide, women, especially when also single parents, are the primary victims of the price spike, which the Institute for Women’s Policy Research in the US calls ‘she-flation’. And the impact on children is devastating: a recent report by the United Nations children’s charity, UNICEF, and the World Bank calculates that, worldwide, three-quarters of households with children have experienced a drop in income since the beginning of the pandemic. In one in four households, adults have gone without food for days at a time to try to feed their children. It is obviously in developing countries—even more exposed because of the pandemic, the rise in interest rates on their debts and the volatility of capital movements—that the situation is most worrying. In sub-Saharan Africa, at least 12 per cent of the population is now acutely ‘food insecure’, where lack of access to adequate food puts a person’s life in immediate danger. Even in Brazil, a country off the UN hunger map since 2014, 33 million people now have nothing to put on their plates. Economic recovery, itself highly hypothetical, will not be enough. And the austerity programmes several states are implementing—Oxfam has calculated that three quarters of governments are planning to cut spending, with total cuts of $7.8 trillion dollars—will only make the situation worse, by reducing the resources for already very fragile public services. Along with social-protection systems, these are the most effective instruments states have to fight poverty and inequality. Equally, if governments try to replenish their coffers via indirect taxes, such as value-added tax, this is once again at the expense of the poorest. Sales taxes are not progressive and, unable to save, the poorest have the highest relative propensity to consume. Neither resort is inevitable. States can instead increase their ‘fiscal space’ by taxing companies and the super-rich more. The energy multinationals have recorded record profits: Shell reported more than $20 billion in one half-year, Total $29 billion and BP $16 billion—previously unheard-of figures. They owe this only to the political situation—in particular, the war in Ukraine—rather than any jump in their productivity. Everywhere, taxes on super-profits must be put in place, as recommended by the UN secretary-general, António Guterres, and as some countries, especially in Europe—such as the UK, Czechia and Spain—have started to do. But focusing on the energy sector is not enough, as explained by the Independent Commission for the Reform of International Corporate Taxation (of which I am a member, along with such figures as Joseph Stiglitz, Jayati Ghosh and Thomas Piketty). Pharmaceutical companies have seen their profits soar thanks to the pandemic, especially as vaccines were developed thanks to public subsidies. The food sector, where oligopolies are common, has also benefited greatly from the situation. It is by speculating on the markets of basic food products such as wheat that another sector, finance, is now making unprecedented profits. And let’s not even talk about digital companies, the big winners of the pandemic and the champions of tax-avoidance strategies. Multinationals are not phantom entities. When their profits explode, it is their principal shareholders who benefit, even if they do so discreetly. Take Cargill, which controls, along with three other companies, 70 per cent of the world’s food market. It made more than $5 billion in profit last year—the highest in its 156-year history—and is expected to do even better this year. Thanks to this windfall, the family now has 12 billionaires. There were ‘only’ eight of them before the pandemic. Indeed, 573 new billionaires emerged in the first two years of the pandemic, or one every 30 hours, according to Oxfam calculations. The total wealth of billionaires is now equivalent to 13.9 per cent of the world’s gross domestic product, three times more than in 2000. The world’s ten richest men have more wealth than the poorest 40 per cent of humanity—3.1 billion people—combined. As the world celebrates International Human Rights Day, we must remember that pandemics, wars and recessions, terrible and painful as they are, do not exempt states from meeting their human-rights commitments. Nor do they allow them to prioritise other issues. On the contrary, it is in the midst of crises that the commitment to human rights is most meaningful, as it is through social protection and public services that states succeed in protecting the livelihoods—and so the economic, social, and cultural rights—of the most vulnerable. This is also the only way to make democracy meaningful for all. * Magdalena Sepulveda is executive director of the Global Initiative for Economic, Social and Cultural Rights and a member of the Independent Commission on International Corporate Tax Reform (ICRICT). From 2008 to 2014 she was United Nations rapporteur on extreme poverty and human rights. http://www.gi-escr.org/latest-news/an-op-ed-by-our-ed-magdalena-seplveda-on-taxing-the-superprofits-to-win-the-inflation-batte-and-defend-human-rights http://socialeurope.eu/taxing-super-profits-to-beat-inflation-defend-rights http://www.gi-escr.org/latest-news/celebramos-la-convocatoria-a-la-primera-cumbre-latinoamericana-por-una-tributacin-global-incluyente-sostenible-y-equitativa http://www.gi-escr.org/private-actors-public-services http://www.gi-escr.org/publications/white-paper-loss-and-damage-the-missing-piece-international-tax-cooperation-for-new-climate-finance http://www.oxfam.org/en/press-releases/richest-1-bag-nearly-twice-much-wealth-rest-world-put-together-over-past-two-years http://www.oxfam.org/en/research/survival-richest http://inequality.org/research/extreme-wealth-tax/ http://www.wider.unu.edu/publication/1-trillion-shade http://www.icrict.com/press-release/2023/3/20/icrict-letter-to-united-nations-secretary-general-antnio-guterres http://www.icrict.com/an-emergency-tax-plan-to-confront-the-inflation-crisis Visit the related web page |
|
View more stories | |
![]() ![]() ![]() |