Oxfam to G20:  Take Action on Global Extreme Inequality

Ignoring rising inequality around the world risks trapping millions in poverty and stunting economic growth. (Photo: United Nations Photo/flickr/cc)

Oxfam to G20: Take Action on Global Extreme Inequality

As wealth gap widens even in rich countries, aid agency calls on G20 leaders to address crisis

Ignoring rising inequality around the world risks trapping millions in poverty and stunting economic growth, Oxfam said on Tuesday.

In a report released before the upcoming G20 summit in Brisbane, Australia, the aid agency called on world leaders to address the crisis by investing in public services and cracking down on tax havens for wealthy corporations, which costs poor countries $100 billion annually.

Reducing income inequality could lift millions out of poverty in developing countries like Kenya, India, and Indonesia, according to the report, titled Turn the Tide: The G20 Must Act on Rising Inequality, Starting With Fairer Global Tax Reform (pdf). "Inequality hinders growth, corrupts politics, stifles opportunity and fuels instability," it states.

In the last year, total wealth in the G20 has increased by $17 trillion, but 36 percent of it--$6.2 trillion--belongs to the richest one percent of people on the planet, Oxfam said. Even as wealthy countries gather more and more wealth, over half of the world's poor live in G20 countries--those considered to be economic global leaders.

Those nations have pledged to raise the level of their output by at least two percent above the current five-year level projection, but Oxfam Australia chief Helen Szoke toldAgence France Presse that promises of economic jump-starts and job creation are meaningless without "inclusive growth"--economic activity that benefits every sector of society.

"The widening gap between rich and poor is increasing... so inequality is becoming more pronounced," Szoke said. "Inequality in and of itself is problematic for those people who are left behind but we also know that you can't actually achieve growth unless you address this issue of inequality."

According to the report, "if G20 countries do not move to strategies that promote inclusive growth, there is growing evidence that they risk damaging the prospects for sustainable economic growth, not to mention ignoring the injustice of social and economic inequality."

One current example of the consequences of wealth inequality: the Ebola crisis. Without a stable health infrastructure, countries in West Africa are unable to stop the virus from spreading rapidly. As Dr. Margaret Chan, head of the World Health Organization, explained in a speech at a September conference, "The rich get the best care. The poor are left to die... Ebola has been, historically, geographically confined to poor African nations. The R&D incentive is virtually nonexistent. A profit-driven industry does not invest in products for markets that cannot pay."

It is the obligation of wealthy countries to actively fight the crisis, Oxfam says in its report. "As major players on the world economic and political stages, G20 leaders have a crucial role to play in the global efforts to combat Ebola in West Africa, both in terms of mobilizing an extraordinary outlay of resources, effort and political will, and in the longer term, providing greater funding for health systems in some of the world's poorest countries to ensure these types of crises cannot take hold again," it states.

"The G20 cannot ignore Ebola because Ebola is the symbol of what happens when there is stark social and economic inequality where you don't have the social protections and public infrastructure to deal with what is a containable disease," Szoke said. "When Ebola has occurred in other countries like Uganda it has been able to be contained."

Closing the inequality gap will also require G20 countries to acknowledge the gender gap, which are intrinsically linked, the report states. Recognizing unpaid care of family members as work and guaranteeing equal political representation and fair living wages in the workplace is "a welcome first step."

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