The alarming increase in global inequality
The growing gap between the world’s richest and poorest continues to widen at an alarming rate. According to a study by Oxfam International, the richest are expanding their fortunes at a rate of 2.5 billion euros a day, while the poorest half of the world’s population sees their wealth shrinking.
Oxfam’s report, “Survival of the richest“, released on the opening day of the World Economic Forum in Davos, details that the richest 1% have cornered almost two-thirds of the wealth generated in the last two years, almost twice as much as the remaining 99% of the population. This sharp increase in inequality is a cause for concern, as it exacerbates social problems such as poverty and economic instability.
Moreover, this concentration of wealth in the hands of a few individuals can stifle economic growth and lead to a lack of competition at a delicate time when the world is suffering from the accumulation of multiple crises. While millions of people face runaway inflation that has pushed up the prices of even basic commodities and made it difficult to cope with high energy costs, multi-billionaire fortunes are increasing their capital exponentially.
The study also highlights that the COVID-19 pandemic has exacerbated inequality, as the richest 1% have seen their wealth increase by more than 2.8 trillion euros since the pandemic began, while the poorest half of the population has seen its wealth fall by 11%.
The law is in place, the catch is in place
One of the main factors contributing to this trend is the popularity of tax havens and other mechanisms that allow the wealthy to evade taxes and keep their wealth hidden from the taxman. Oxfam International estimates that corporations and wealthy individuals hide at least 7 trillion euros in tax havens, money that could be used to fund public services and reduce poverty.
These practices allow the rich to accumulate wealth and avoid paying their fair share, further exacerbating inequality. To tackle this problem, Oxfam is urging governments to take a range of measures, including closing tax havens and introducing progressive tax systems that redistribute wealth.
In addition, the organisation says governments should invest in education and training programmes to provide people with opportunities to improve their skills and increase their earning potential. Finally, it calls on governments to ensure that economic recovery plans in the wake of the pandemic prioritise the reduction of inequality and the creation of a more equitable society.
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