Since 2015, the richest 1 percent on Earth has owned more wealth than the rest. This in a nutshell is the reason why rights group Oxfam has chosen to title its report ‘An economy for the 99 percent’. This year too, the Oxfam report focusing on income inequality has been released ahead of the World Economic Forum (WEF) annual meet at Davos. As in earlier years, the rich and powerful from across the world will attend this summit — while the have-nots, kept a safe distance away by police in riot gear, will be holding protest meets to highlight their condition. But Oxfam already sees a change in the script, warning of a revolt brewing in rich countries. Drawing parallels from Britain’s shock exit from the European Union, Dold Trump grabbing the US presidency with a massive anti-establishment vote, and an upsurge of xenophobia and populism across Europe — Oxfam believes that the vast rich-poor gap (and growing ever larger) is not something more and more people are willing to tolerate any longer. It is their discontent with mainstream politics that is upsetting the status quo around the world, the report argues. The degree of growing income inequality is reflected in the fact that 8 men now own as much wealth as 3.6 billion or half the world’s population. In fact, after Oxfam factored in data from countries like Chi and India, it had to revise its own calculation. Last year the Oxfam report had said 62 persons had as much wealth as half the world’s population. It now says that ‘the poorest half of the world has less wealth than had been previously thought’. In wanbe countries like Chi, India, Indonesia, Bangladesh and Sri Lanka, their richest 10 percent of population have seen more than 15 percent growth in income, while their poorest 10 percent have seen their share of income fall by more than 15 percent.
The Oxfam report has several interesting observations about India. The degree of inequality is higher in India with her richest 1 percent owning 58 percent of her total wealth. This country has a high number of multi-generatiol billioires, who in turn will transfer wealth to their heirs in the next two decades. Between 1988 and 2011, incomes of the poorest 10% Indians rose by approximately Rs 2,000, the rate of increase being 1% each year; in the same period, incomes of the richest 10% Indians rose by almost Rs 40,000, the annual rate of increase being 25%. Among the poor, the condition of women is far worse. India suffers from huge gender wage disparity, with men earning 30 percent or more than women in similar jobs. What is more, this gender wage disparity works at both high and low income ends in India, with women forming as much as 60 percent of the lowest paid wage labour, but only 15 percent of the highest wage-earners. Indian corporations are fast catching up with rich Western countries in seeking to maximise returns to shareholders. “In India, as profits have been rising for the 100 largest listed corporations, the share of net profits going to dividends has also increased steadily over the last decade, reaching 34 percent in 2014/15, with around 12 private corporations paying more than 50 percent of their profits as dividends,” the report says. Overall, the Oxfam report has given the clarion call that it is high time ‘to build a human economy that benefits everyone, not just the privileged few’. It has called for higher taxes on rich individuals and corporations; to keep big business from growing ever closer with politics, it has suggested that lobby groups be publicly registered, and that stronger rules be enforced to prevent conflicts of interest. It remains to be seen how the Davos summit takes note of rising inequality, even though its theme this year is ‘Responsive and Responsible Leadership’, which organizers say has been chosen as a response to the ‘backlash against globalization’. In India, considering the neo-liberal tendencies of both UPA and NDA regimes, it will be a long haul before a government gets around to introduce an inheritance tax, hike wealth tax rates, or elimite tax exemptions for corporates. Ongoing efforts by the Central government to widen the tax base (and thereby generate more funds for public welfare) is laudable, but mollycoddling of the rich at the expense of the poor will heighten inequality further. The implications for the country’s politics can only be ominous, if developments elsewhere are any indication.