Rise in inequality could push 250M more into extreme poverty: Oxfam

As the gap between the rich and poor around the globe is spiraling out of control, it is affecting the lives of hundreds of millions of people who are being pushed into extreme poverty.

In the last two and a half decades, there had been a steady decline in extreme poverty, but progress “has now ground to a halt,” according to Anthony Kamande, Oxfam’s global inequality research coordinator.

Government responses to the Covid-19 pandemic, especially in poorer countries “have undermined hard-won gains in the fight against poverty,” he said.

For the first time in 25 years, extreme wealth and extreme poverty “have sharply increased simultaneously,” he said.

The pandemic pushed 90 million people into extreme poverty in 2020, an increase of 12 percent compared to 2019, said the researcher. 

In 2022, nearly 670 million people were estimated to be living in extreme poverty, out of which over 410 million are in Sub-Saharan Africa alone, said Kamande. 

He estimated that those inflicted by poverty live on “less than $2.15 per day.”

“The result of this is that we are experiencing preventable deaths and massive suffering, hunger is on the rise, human development is declining, and we are far off from achieving the SDGs (Sustainable Development Goals), including one on ending extreme hunger by 2030,” he added.

Oxfam warned that on top of the economic crisis caused by Covid-19, skyrocketing food prices and energy costs caused by the war in Ukraine could push a quarter of a billion more people into extreme poverty.

It called for urgent international action, including cancelling debt repayments for poorer countries.

Oxfam’s international executive director, Gabriela Bucher, also called for immediate radical action, as without it, “we could be witnessing the most profound collapse of humanity into extreme poverty and suffering in memory.”

‘The winner takes it all’

“The winner-takes-it-all economic model” is massively rewarding for the already rich people, he said, adding wealth is increasingly being transferred from the poor to the rich.

Since 2020, the richest 1 percent have captured almost two-thirds of all new wealth, which is nearly twice as much money as the bottom 99 percent of the world’s population, according to Kamande.

He estimated that billionaire fortunes are increasing by $2.7 billion a day, even as inflation outpaces the wages of “at least 1.7 billion workers.”

In 2022, food and energy companies more than doubled their profits, paying out $257 billion to wealthy shareholders, “while over 800 million people went to bed hungry,” he said.

“Now, amid a cost-of-living crisis, it is clear that the world cannot continue on this trajectory,” added Kamande.

 ‘Unfair’ tax system

“The trickle-down neoliberal economic model” is continuing to “trick” millions into poverty, he argued.

Oxfam urged that the wealthiest individuals and companies that profit from Covid-19 and the Ukraine war crisis must pay more taxes.

The charity also called on the Group of 20 to assign $100 billion of an existing austerity fund for poor countries to shield the poorest from inflation through subsidies and cutting taxes on goods and services.

Making the rich pay their “fair share of taxes” would go a long way in raising resources for tackling poverty and inequality, it said.

“For example, a progressive annual wealth tax at 2 percent, 3 percent, and 5 percent on the world’s multi-millionaires and billionaires would raise $1.7 trillion annually."

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