Inequality rises across the G20 as economic growth fails to trickle down to poorest
Inequality has increased in 14 of the 18 G20 countries since 1990 as economic growth has too often failed to benefit poor people, according to new figures in a report published by Oxfam today as G20 finance ministers meet in Mexico.
Too many governments and policy makers have put economic growth first and the interests of poor people second, allowing their incomes to fall further behind those at the top and leaving them to bear the costs of economic growth such as environmental degradation.
Anger about inequality has been a key driving force behind the Occupy protests that swept around the world last year. Protests have taken place in more than 80 countries amid anger that the top 1 per cent is capturing a disproportionate share of the economic cake. Just last week a panel of experts assembled by the World Economic Forum identified severe income inequality as the biggest threat facing the world.
Left behind by the G20? presents a new analysis of inequality in G20 countries which shows that inequality increased fastest in Russia, China, Japan and South Africa over the period 1990-2010. It predicts that more than a million more people will be pushed into poverty in South Africa during the next decade unless rapidly growing inequality is addressed. Inequality also increased in rich countries such as Canada, the UK and Germany.
South Korea and the emerging economies
South Korea is the only rich country that has succeeded in reducing inequality during the last two decades. Of the emerging economies only Brazil, Argentina and Mexico have done so, though inequality remains high and further progress is needed.
Oxfam will present the report to the Mexican President at the World Economic Forum in Davos next week. Mexico is this year’s G20 chair.
Caroline Pearce, co-author of the report, said: “This analysis explodes once and for all the complacent assumption that governments can wait for economic growth to trickle–down to the poorest.
“The fact is poor people missed out on their fair share of the prosperity of the boom years and have been hit hardest by the crisis that followed."
“If the G20 wants to tackle poverty it needs to go do more than promote growth – it needs to adopt policies that boost the incomes of the poor and protect them from environmental degradation.
“Contrary to popular myth, a rising economic tide does not necessarily lift all boats and can in fact sink some of them.”
Half the world’s poorest people live within the G20, making it a key battleground in the fight against global poverty. The G20 is formally committed to promoting inclusive and sustainable growth.
The report finds that reducing inequality is not only the right thing to do; it also makes sound economic sense. While rising inequality has in the past been viewed as an inevitable result of economic progress, the report identifies a growing body of evidence, including from the International Monetary Fund, which shows that inequality acts as a brake on growth.
In Brazil between 1999 and 2009, nearly 12 million people escaped absolute poverty (income less than $1.25-a-day) bringing the proportion of people living in poverty from about one in nine to fewer than one in 25 thanks to economic growth and reductions in income inequality. Reducing inequality at a similar rate over the next decade would reduce poverty by a further 80 per cent.
Pearce said: “The contrasting fortunes of poor people in South Africa and Brazil – two countries with similar growth rates - show the crucial role governments play in reducing poverty and inequality.”
The report lists five key policies governments can adopt to reduce inequality and recommends that the mix of policies should be tailored to the national context. The five are: redistributive transfers; universal health and education; progressive taxation; removal of barriers to equal rights and opportunities for women; and land reform.
Read the report: Left behind by the G20?
Blog: Left behind by the G20: It’s time to tackle inequality
Our Health & Education For All Blog
Thx for speaking up for women: @MarsGlobal,#Mondelez & @Nestle have now moved from words 2 action http://t.co/laFtaWajFI #BehindTheBrands1 day 17 hours ago
UN agency and Slow Food group partner to boost livelihoods of small farmers http://t.co/l0YMT9yyk8 @SlowFoodHQ1 day 23 hours ago
RT @oxfamgbpress: Oxfam very relieved that Cyclone #Mahasen did not cause damage to vulnerable communities in Myanmar http://t.co/t2VwONPjs02 days 21 min ago
RT @annamac33: The #ArmsTreaty can create a safer future for millions. Urge the US to sign! http://t.co/HRlNC8BcO32 days 1 hour ago
#FF Oxfam Global Ambassadors @KristinDavis @GaelGarciaB @driverminnie @liviafirth @baabamaal @HelenLMirren @BoseOfficial2 days 1 hour ago
#FF Oxfam Global Ambassadors @AnnieLennox @djimonhounsou @angeliquekidjo @firthcom @coldplay @RahulBose1 http://t.co/rXOrgldjlt2 days 1 hour ago
Thanks for speaking up for women! @MarsGlobal #Mondelez & @Nestle have moved from words to action http://t.co/pMvtbhesPh #BehindTheBrands2 days 3 hours ago
#FF the Oxfams! @IntermonOxfam @OxfamIndia @OxfamJapan @oxfamnovib @OxfamQuebec @Oxfam_mcm @OxfamItalia @oxfam_sol @oxfamfrance2 days 4 hours ago
#FF the Oxfams! @OxfamIreland @oxfamcanada @OxfamAustralia @Oxfam_DE @OxfamAmerica @oxfamgb @oxfamnz @oxfamhongkong @oxfammexico2 days 4 hours ago
Dismal levels of investment in agriculture a primary reason 1 in 8 people in the world are hungry http://t.co/orbRUxuVQo #govspendwatch2 days 18 hours ago
'A Jungle of Humanity - and Disorder', an interactive feature from @nytimes http://t.co/DxmATtGICV #SyriaCrisis #Zaatari2 days 20 hours ago
RT @benphillips76 How to Start Development’s Gutenberg Revolution http://t.co/DbieZs9UBZ #govspendwatch2 days 21 hours ago
Social protection, #genderequality & #climatechange crucial to tackling inequality http://t.co/mKqSIBcceM via @guardian #govspendwatch2 days 23 hours ago
RT @louis_belanger Starting to see Syrian refugees all over #Beirut On promenade, on Hamra, outside grocery stores, in parking lots #Syria2 days 23 hours ago
Are governments meeting their #MDG spending targets? Read the blog http://t.co/3bF1lhH8AX #govspendwatch #MDGs3 days 17 min ago