Oxfam, an international charity organization, has called for immediate action to address the widening global inequality caused by the COVID-19 pandemic. In a report released ahead of the annual gathering of the global elite at the World Economic Forum, the charity revealed that almost two-thirds of the new wealth amassed since the start of the pandemic has gone to the richest 1%.
According to the report, the best-off individuals have pocketed a staggering $26tn (£21tn) in new wealth up to the end of 2021. That represents 63% of the total new wealth, with the remaining 37% going to the remaining 99% of people. Oxfam stated that for the first time in a quarter of a century, the rise in extreme wealth was being accompanied by an increase in extreme poverty, and called for new taxes to be levied on the super-rich.
The charity organization pointed out that policies introduced to combat the economic impact of Covid 19 – such as cuts in interest rates and the money creation process known as quantitative easing – boosted the value of property and shares, which tend to be owned by richer people. This has led to an increase in the wealth of the already wealthy, while the rest of the population struggled to make ends meet.
The report stated that for every $1 of new global wealth earned by a person in the bottom 90% in the past two years, each billionaire gained roughly $1.7m. Despite small falls in 2022, the combined fortune of billionaires had increased by $2.7bn a day. This pandemic gain came after a decade when both the number and wealth of billionaires had doubled.
Danny Sriskandarajah, the chief executive of Oxfam GB, said: “The current economic reality is an affront to basic human values. Extreme poverty is increasing for the first time in 25 years and close to a billion people are going hungry but for billionaires, every day is a bonanza.” He added, “Multiple crises have pushed millions to the brink while our leaders fail to grasp the nettle – governments must stop acting for the vested interests of the few.”
The report also highlighted how the extreme concentrations of wealth led to weaker growth, corrupted politics and the media, corroded democracy and led to political polarisation. Oxfam also pointed out that the super-rich were key contributors to the climate crisis, emitting a million times more carbon than the average person. They were also twice as likely to invest in polluting industries, compared with the average investor.
In light of these findings, Oxfam called on governments to introduce immediate one-off wealth levies on the richest 1%, together with windfall taxes to clamp down on profiteering during the global cost of living crisis. Subsequently, there should be a permanent increase in taxes on the rich, with higher rates for multimillionaires and billionaires.
The charity organization also highlighted the ways in which the current economic system is unjust, citing examples such as how food and energy companies had more than doubled their profits in 2022, paying out $257bn to wealthy shareholders at a time when more than 800 million people were going hungry. It also pointed out that only 4 cents in every dollar of tax revenue came from wealth taxes and half the world’s billionaires lived in countries with no inheritance tax on money they give to their children.
Oxfam estimated that a tax of up to 5% on the world’s multimillionaires and billionaires could raise $1.7tn a year, enough to lift 2 billion people out of poverty and fund a global plan to end hunger. In a foreword to the report, Colombia’s finance minister, José Antonio O