G20 must turn the tide on rising inequality: Oxfam
November 12, 2014—G20 leaders meeting in Brisbane, Australia this weekend (15 and 16 November) are being urged to tackle rising inequality head-on or risk leaving millions of people trapped in poverty, as new figures reveal the wealth disparity in a number of G20 countries.
Oxfam’s report ahead of the G20, Turn the Tide: Why the G20 must act on rising inequality, shows that in the past year, the total wealth in the G20 increased by US $17 trillion, but the richest one per cent of people in the G20 captured a staggering US $6.2 trillion of this wealth – 36 per cent of the increase.
With inequality rising globally and with G20 countries home to more than half the world’s poorest people, Oxfam is calling on the G20 to heed the warnings from organisations such as the IMF, the World Bank and the OECD and acknowledge that inequality is derailing poverty alleviation and threatening economic growth.
“There’s a growing consensus that inequality needs to be urgently addressed. G20 countries, including Canada, are in a position to turn the tide. The G20 needs to commit to strategies of inclusive growth, and take action to reduce inequality rather than narrowly focusing on GDP,” says Denise Byrnes, Executive Director of Oxfam Québec.
Youth are bearing the brunt of extreme economic inequality, facing high unemployment, precarious jobs and lack of access to basic social services in many countries around the world. “Canada has a role to play in promoting access to education, employment and entrepreneurship opportunities for youth in order to tackle inequality,” says Denise Byrnes.
One way Oxfam proposes to tackle inequality is to crack down on the use of tax havens and tax-dodging by multinational corporations. Oxfam calculates that poor countries miss out on US $100 billion each year because of corporate tax avoidance.
Oxfam recognizes that the G20-mandated global tax reform under way (carried out by the OECD) is a good first step. But may it not result in better outcomes for the poor as the majority of developing countries do not have a place at the negotiating table. Key issues that need to be addressed include tax competition between countries, whereby poor countries reduce their tax rate to attract foreign investment, and the question of where profits are taxed – where a country is headquartered or where it makes its profits.
For example, in 2012, the tax incentives for multinationals operating in Sierra Leone – where Ebola is currently raging – were equivalent to 59 per cent of the country’s entire budget, and more than eight times the government’s spending on health. “The Ebola crisis is a vivid example of the role of growing social and economic inequalities which are tearing through West Africa because countries didn’t have the public health infrastructure to stop it,” says Byrnes. “G20 leaders need to swiftly ensure all the personnel, equipment and funding required to halt the Ebola outbreak are made available.”
Oxfam is calling on Canada to increase the percentage of the international development budget that is specifically allocated to advance gender justice and women’s empowerment. “The G20 needs to take gender equality, women’s rights and women’s economic inequality seriously. Extreme economic inequality exacerbates gender inequality,” says Julie Delahanty, Executive Director of Oxfam Canada. In Canada, 8 out of the ten in the top 1 per cent of earners are men.
Women continue to earn 20% per cent less than their male peers for the same full-time work, are more likely to be poor, and do twice as much unpaid work at home. “Canada should commit to ending the gender pay gap, and fund public services and social programs that help lift women out of poverty, beginning with universal childcare and affordable housing. This commitment needs to go beyond the target of increasing women’s participation in the workforce that the G20 announced last week,” states Delahanty.
For further information:
Contact: Kristen Ostling, *protected email*
Turn the Tide: Why the G20 must act on rising inequality is available for download here: //www.oxfam.ca/our-work/publications/turn-tide-g20-media-briefing