August 6, 2021

1% of the richest will soon own half of the world’s wealth

© UNEP

Ahead of the annual meeting of the World Economic Forum in Davos, the NGO Oxfam calculated that in 2016, the cumulative wealth of 1% of the richest people in the world will exceed that of 99% of the population, unless they slow down the current trend which is towards a significant increase in inequalities.

The international development organization Oxfam, whose executive director, Winnie Byanyima, will co-chair the 2015 edition of Davos, today highlights that the explosion of inequalities is hampering the fight against poverty in the world, while one person in nine are hungry and over a billion people live on less than $ 1.25 a day.

The study “Insatiable wealth: always more for those who already have everything”, published by Oxfam, shows that the share of world heritage held by the richest 1% has increased from 44% in 2009 to 48% in 2014, and will exceed 50% in 2016. In 2014, members of this international elite had an average of $ 2.7 million per adult.

In addition, a large part (46%) of the world’s wealth, shared by the remaining 52%, still belongs to 1/5 of the richest population. Finally, 80% of the world’s population share only 5.5% of the world’s heritage with an average wealth of $ 3,851 per adult, 700 times less than the average wealth of the richest 1%.

« The status quo comes at a cost. If business continues as if nothing had happened for the elites, our inability to reduce inequalities could delay the fight against poverty by decades. Poor populations suffer doubly from rising inequalities: not only does their proportional share of the economic pie shrink, but as extreme inequality hurts growth, the pie itself becomes smaller. »A souligné Winnie Byanyima.

Lynn Forester de Rothschild, CEO of EL Rothschild and President of the Coalition for Inclusive Capitalism, said that “ Oxfam’s report is just the latest in a long list of evidence that inequalities have reached scandalous extremes and continue to rise. It is time that the big names of modern capitalism, as well as our political leaders, set out to change the system so that it becomes more equitable, more sustainable and more open to all.. »

Last year, Oxfam created a stir in Davos by revealing that the richest 85 people have as much as the poorest half of the world’s population. Today only 80 have as many as 3.5 billion people, which is a dramatic drop, considering that this figure stood at 388 in 2010. In nominal terms, the wealth of the 80 richest people in the world doubled between 2009 and 2014.

The 10 richest people in the world

The 10 richest billionaires (2013 ranking) and the evolution of their wealth between March 2013 and March 2014.
Billionaire Wealth in billions of dollars (2014) Change in wealth from March 2013 to March 2014 Source of wealth Nationality Sex
Warren Buffet 58,2 + 9 % Berkshire United States H
Michael Bloomberg 33 + 22 % Bloomberg LP United States H
Carl Icahn 24,5 + 23 % Debt acquisition United States H
Prince Alwaleed Bin Talal Alsaud 20,4 + 2 % Investments Saudi Arabia H
George Soros 23 + 20 % Hedge funds United States H
Joseph Safra 16 + 1 % Bank Brazil H
Luis Carlos Sarmiento 14,2 + 2% Bank Colombia H
Mikhail Prokhorov 10,9 – 16 % Investments Russia H
Alexey Mordashov 10,5 – 18 % Investments Russia H
Abigail Johnson 17,3 + 36 % Wealth management United States F

Oxfam’s study sheds light on how extreme wealth is passed down from generation to generation and how elites mobilize their considerable resources to ensure that international rules favor their interests. More than a third of the 1,645 billionaires identified by Forbes have inherited some or all of their wealth.

How to fight against growing inequalities?

Oxfam calls on states to adopt a seven point plan to tackle inequality:

  1. Put a brake on tax evasion companies and large fortunes
  2. Invest in free and the universality of public services such as health and education
  3. Equitably distribute the tax burden, alleviating it on the side of labor and consumption while taxing more capital and wealth
  4. Introduce a minimum wage and work towards a decent wage for all workers
  5. Introduce legislation in favor ofequal pay and promote economic policies ensuring the equitable treatment of women
  6. Set up a sufficient social protection for the poorest, in particular the guarantee of a minimum income
  7. Adopt the common goal of combating international inequalities.

Wealthy people lobbying to protect their interests

The most successful multinationals in the finance and insurance industries and the pharmaceutical and healthcare industries are making huge profits. They manage large resources that they use to reward their owners and investors, thereby increasing their personal wealth. These resources can also be used to exert economic and political influence. These companies, for example, explicitly use their resources to lobby governments directly, especially on issues and policies affecting their business interests.

Thus, 20% of billionaires have interests in the finance and insurance sector, and the nominal wealth of this group increased by 11% in twelve months, from March 2013 to March 2014. In 2013, these sectors had spent 550 million dollars to lobby politicians in Washington and Brussels. In the 2012 US election alone, the financial sector funded campaigns to the tune of $ 571 million.

The entire net wealth of billionaires with interests in the pharmaceutical sector and health increased by 47%. They too had spent $ 500 million lobbying politicians in Washington and Brussels in 2013.

Oxfam fears that the lobbying power of these sectors could be a major obstacle to reforming the international tax system and impose intellectual property rules that prevent the poorest from accessing life-saving medicines.

Data from the International Monetary Fund, in particular, increasingly clearly establishes that extreme inequalities are detrimental to those at the bottom of the ladder, but also to economic growth.

Author

Oxfam


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