Oxfam expects the world’s first trillionaire within a decade and poverty to end in 229 years! The wealth of the world’s five richest men has more than doubled from 2020, as 4.8 billion people became poorer.
The 2024 Oxfam report entitled Inequality Inc. warned, “We’re witnessing the beginnings of a decade of division” as billions cope with the “pandemic, inflation and war, while billionaires’ fortunes boom”.
“This inequality is no accident; the billionaire class is ensuring corporations deliver more wealth to them at the expense of everyone else”, noted Oxfam International’s Amitabh Behar.
Driving inequality
Summarising the report, Tanupriya Singh noted gaps between rich and poor, and between wealthy nations and developing countries had grown again for the first time in the 21st century as the super-rich became much richer.
The Global North has 69% of all wealth worldwide and 74% of billionaire riches. Oxfam notes contemporary wealth concentration began with colonialism and empire.
Since then, “neo-colonial relationships with the Global South persist, perpetuating economic imbalances and rigging the economic rules in favour of rich nations”.
The report notes, “economies across the Global South are locked into exporting primary commodities, from copper to coffee, for use by monopolistic industries in the Global North, perpetuating a colonial-style ‘extractivist’ model”.
Inequalities within rich nations have grown, with marginalised communities worse off, giving rise to rival ethno-populisms and vicious identity politics.
Seventy per cent of the world’s largest corporations have a billionaire as principal shareholder or chief executive. These firms are worth over $10 trillion, which exceeds the total output of Latin America and Africa.
The incomes of the rich have grown much faster than for most others. Hence, the top 1% of shareholders own 43% of financial assets worldwide – half in Asia, 48% in the Middle East, and 47% in Europe.
Between mid-2022 and mid-2023, 148 of the world’s largest corporations made $1.8 trillion in profits. Meanwhile, 82% of 96 large corporations’ profits went to shareholders via stock buybacks and dividends.
Only 0.4% of the world’s largest companies have agreed to pay minimum wages to those contributing to their profits. Unsurprisingly, the poorer half of the world earned only 8.5% of world income in 2022.
The wages of almost 800 million workers have not kept up with inflation. In 2022 and 2023, they lost $1.5 trillion, equivalent to an average of 25 days of lost wages per employee.
In addition to income inequality, the 2024 Oxfam Report noted workers face mounting challenges due to stressful workplace conditions.
The gap between the incomes of the ultra-rich and workers is so huge that a female health or social worker would need 1,200 years to earn what a Fortune 100 company CEO makes annually!
Besides lower wages for women, unpaid care work subsidises the world economy by at least $10.8 trillion yearly, thrice what Oxfam terms ‘tech industry’.
Monopoly power
Oxfam notes that monopoly power has worsened world inequality. Thus, a few corporations influence and even control national economies, governments, laws, and policies in their own interest.
An International Monetary Fund (IMF) study found monopoly power responsible for 76% of the fall in the labour share of US manufacturing income.
Behar noted, “Monopolies harm innovation and crush workers and smaller businesses. The world hasn’t forgotten how pharma monopolies deprived millions of people of COVID-19 vaccines, creating a racist vaccine apartheid while minting a new club of billionaires”.
Between 1995 and 2015, 60 pharmaceutical companies merged into ten Big Pharma giants. Although innovation is typically subsidised with public funds, pharmaceutical monopolies price-gouge with impunity.
Oxfam notes the Ambani fortune in India comes from monopolies in many sectors enabled by the Modi regime. Ambani’s son’s recent extravagant wedding celebrations flaunted extreme wealth concentration worldwide.
The 2021 Oxfam report estimated that “an unskilled worker would need 10,000 years to earn what Ambani made in an hour during the pandemic and three years to earn what he made in a second”.
Unsurprisingly, the 2023 Oxfam Report noted, “India’s richest 1% own around 40% of the country’s wealth, while over 200 million people continue to live in poverty”.
Fiscal subordination
Corporations have increased their value through a “sustained and highly effective war on taxation … depriving the public of critical resources”.
As many corporations increased their profits, the average corporate tax rate dropped from 23% to 17% between 1975 and 2019. Meanwhile, around a trillion dollars went into tax havens in 2022 alone.
Of course, falling corporate tax rates are also due to “the broader neoliberal agenda promoted by corporations and their wealthy owners, often alongside Global North countries and international institutions such as the World Bank”.
Meanwhile, pressures for fiscal austerity have grown as government tax revenue has declined relatively for decades. High government indebtedness with corporate tax evasion and avoidance have exacerbated austerity policies.
Underfunded public services have adversely affected consumers and employees, especially health and social protection. Higher interest rates have worsened debt crises in developing nations.
With governments fiscally constrained from sustaining public services, privatisation advocates have become more influential, gaining greater control of public resources by various means.
Private corporations profit from discounted public asset sales, public-private partnerships and government contracts to deliver public policies and programmes.
“Major development agencies and institutions… have found common ground with investors by embracing approaches that ‘de-risk’ such arrangements by shifting financial risk from the private to the public sector”, the report states.
Access to essential public services should be universal. Insisting on private profit-making considerations deprives marginalised communities of access, worsening inequalities.
Jomo Kwame Sundaram is a prominent Malaysian economist. He is senior adviser at the Khazanah Research Institute, visiting fellow at the Initiative for Policy Dialogue, Columbia University, and adjunct professor at the International Islamic University.
Siti Maisarah Zainurin will join a Malaysian government research institute after completing work at Khazanah Research Institute.
