A world without poverty is becoming more of a utopia than a realistic aspiration. Because at this step we would have to wait about 230 years before we see that all the citizens of the planet live without suffering hardships.
As every year, days before the start of the Davos Economic Forum, the non-governmental organization Oxfam presents the analysis on the global economy, which aims to be a counterpoint to the dominant narrative of the elites who gather in the town every year Switzerland to discuss the business agenda. Once again, a marked divergence is created in the two views. Because while the Davos Forum is concerned with geopolitics and disinformation (Global Risk Report, published this week) and barely takes into account other factors such as inflation or debt, Oxfam points to inequality.
According to this study, the wealth in real terms of 4.8 billion people (more than half of the world’s population, which exceeds 8 billion) has decreased compared to 2019. Global inequality, i.e. the gap between the global North and South, has grown for the first time in 25 years.
The wealth of billionaires has increased by three trillion euros (34%) since the beginning of this decade, a fortune that is growing at a rate three times greater than the rate of inflation. Instead, the rise in prices meant that “the wages of almost 800 million people in 52 countries have not been able to keep up with inflation and have lost 1.3 trillion euros in the last two years, which is equivalent to almost a month’s salary lost for each worker”.
After examining the evolution of poverty with World Bank data (with the threshold of six dollars a day, in this case) between 2015 and 2019, the researchers conclude that, at this rate, it would take 230 years to eradicate poverty. On the opposite front, as a result of this concentration of income, since 2020 the combined wealth of the five richest people in the world has doubled. “It’s a wonderful world for a small minority,” concludes the Oxfam study.
Companies are making more and more money, which in itself would be good news. The analysis of the largest companies in the world (oil companies, luxury sector and financial sector) shows an increase of 89% in the earnings of the years 2021 and 2022, compared to the average of the period 2017-2020.
The most recent data for the first six months of 2023 show that last year is on track to break all records as the most profitable for large companies. Together, 148 of the world’s largest companies earned nearly $1.8 trillion in profits between June 2022 and June 2023.
Without wanting to criminalize wealth, Iñigo Macías, Oxfam-Intermón researcher, believes that “a more equitable distribution would be appropriate, instead of opting to redistribute dividends or buy back shares at the expense of the remuneration of work”. According to this organization’s estimates from the last available fiscal year, for every $100 in profits, $82 was returned to shareholders.
There is no great progress in taxation either. Since 1980, corporate income tax rates have more than halved in OECD countries, starting at 48% in 1980 and falling to just 23.1% in 2022. The effective rate has lowered even further, as a result of tax avoidance or even tax evasion.
In 2022, close to a trillion dollars in profits were moved to tax havens (or low-tax territories) (which represents 35% of business profits earned abroad). But it is likely that all this will not be discussed at the Davos Forum. Once more.
