Inequality and the future of global development - University of Manchester, GDI Launch - 2016

Global Development Institute: Oxfam's Winnie Byanyima on inequality

On February 17 2016, Winnie Byanyima returned to her alma mater, the University of Manchester, to deliver the keynote public lecture at the launch event of the Global Development Institute (GDI). Winnie's talk was titled 'inequality and the future of global development'.

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REMARKS AS DELIVERED

Manchester has a proud history of radicalism.

It was here that tens of thousands of unarmed men and women marched in 1819 to demand greater freedom only to be charged by the army and hundreds killed in the massacre of Peterloo. It was also tens of thousands of ordinary working people in Manchester who signed petitions and joined the campaign for the abolition of slavery.  This is a city that has always known whose side it is on.

I arrived at this University as a refugee from the brutal dictatorship of Idi Amin in Uganda. I was an angry girl, having to leave my family, my friends and the university where I had just started. But it was my experience here in Manchester that gave me the opportunity to turn my anger into activism.

Upon arriving, I joined other students in various societies. We organized. We protested. We got involved in fierce intellectual debates. We supported the anti-apartheid struggle and the decolonization struggles in Africa at that time. I was particularly active in the movements to support the liberation of Zimbabwe and Namibia. And I made lifelong friends here.

It was here in Manchester that I was also exposed to global feminist thought. And I was active in the international society and through that got very attracted to the anti-dictatorship struggles that were going in Latin America at the time.

I was studying Aeronautical engineering as you have been told and I spent many, many hours in the John Rylands library. But if I’m to tell you the truth - I was not sitting in the engineering or fluid mechanics section! I was in the Africa section, reading African history, politics, social anthropology. That’s where I used to sit.

Manchester grew me into an activist. I developed skills here that lasted with me until today.

So I am very glad to be back here. And I feel deeply honoured to have been asked to speak at the opening of this very important institute.

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I have been asked to talk about inequality, and the future of global development. Some of you may have read our recent report which we published a few weeks ago, showing that the world’s 62 richest billionaires now have more wealth than the poorest 50% of the world put together – that’s 3.6 billion people. The wealth of these 62 individuals has gone up by half a trillion dollars in just five years. 1% of people now own more wealth than the other 99% combined.

A global economy has been created that works for the few at the expense of the many. Far from trickling down, income and wealth are flowing upwards at a frightening rate. Such obscene levels of inequality make no moral or economic sense, especially when we know that almost a billion people are still going to bed hungry at night. These are the challenges we must confront.

Just after I got back from Davos in January, at the World Economic Forum, I spoke with a colleague of mine at Oxfam who had himself just come back from Myanmar. He had been interviewing young women who work in factories producing clothes for high street brands like Primark, H&M and GAP. These women are members of labour rights organisations with which Oxfam works. They work six days a week, sometimes seven, sometimes working up to 23 hours a day, they earn less than $4 a day for their labour. They struggle to make ends meet. They frequently fall into debt.  If they get sick they don’t get paid, and if they get pregnant they lose their job.

I mentioned before how 62 billionaires have more wealth than the bottom half of the world combined. Well, 4 of those 62 have made their money primarily out of the garment industry, including the head of Zara and H&M.  It is an industry within which big firms are consistently using their dominant position to insist on poverty wages for those at the bottom of their supply chains. Between 2001 and 2011, 10 years, wages for garment workers in most of the world’s 15 leading apparel-exporting countries actually fell in real terms. And I don’t have to tell you that the reward at the top of these companies skyrocketed.

90% of garment workers in Myanmar are women. 53 of the 62 richest people on earth are men, including all four of those who made their billions in high street fashion.  Across the world, women are the ones who are in the worst paid and most precarious jobs.  Countries where the gap between the poor and the rich is more extreme are also countries where the gap between women and men is greater. What is clear then is that the fight for gender equality and the fight against economic inequality are sister struggles.  

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When we released our report this year on inequality, one of the criticisms levelled at Oxfam was that we are ‘anti-capitalist’. We are told: the multi-billionaire heads of the high street fashion houses and the young women Oxfam met in Myanmar last week sewing clothes are all part of a huge global success story, and Oxfam is being churlish to say otherwise.

In one way they are right.  Those young women are living above the globally agreed extreme poverty line of $1.90 a day, so they are officially no longer counted as poor.  But their lives are still unacceptably tough and miserable.  

Is this what success looks like? What kind of a world are we thriving for?

I was asked here to speak about the future of global development.

We know, we agree, that there has been remarkable progress in the past 20 years in reducing the number of people who live below that extreme poverty line. The first of the Sustainable Development Goals, agreed just a few months ago in New York, is to end extreme poverty – using this same measure – by 2030 of $1.90. If we achieve that, it will certainly be a remarkable feat. But can that be enough? Can it?

I don’t think so. When my colleague met with those garment workers in Myanmar, they were spending their one day off every week learning about unionisation, and what other workers like them had achieved through collective activism in nearby countries like Thailand and Bangladesh. For them, $4 a day is not enough – not enough to have any real choices, or to be rid of the fear of debt. These women aren’t asking for a life of super yachts and private jets. But they are demanding for a life of dignity and freedom. These women must be at the heart of our vision of the future of global development.

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We owe it to these women, and to many millions more like them, to do better. We need to create a Human Economy that works for people, rather than the other way round, people working for the economy. We need a Human Economy, rather than an Economy for the 1%.  It’s that idea of a Human Economy that I want to talk a little more about.

The Human Economy will require big ideas. New ideas. I don’t think those ideas will come from the CEO’s who I met in Davos and the big politicians. Many of them are good people with good intentions, but it is hard for them to see a new path. It is exciting to hear the head of the World Bank, for example, talking about the dangers of inequality and the urgent need to tackle it. I believe that Jim Kim is a man of real integrity. And yet the same World Bank continues to promote policies which can only further fuel the wildfire of inequality that is spreading across the globe – polices such as privatization and user fees in schools. These risk denying millions of poor children, especially girls, from having an education they need and deserve.

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And every child, every girl that is excluded from school because school is not free is a criminal waste of a future.

Let me tell you about my own background when I was growing up in Uganda. There was a girl in my class called Agnes – she was the cleverest girl in my year, always finishing at the top of our class despite often having to miss school because she had to care for a sick family member, or because she had to collect water, or because she had to harvest crops, many reasons. Agnes was a girl, Agnes was a refugee from Rwanda, Agnes was poor. And those three factors intersected to mean that she never had a fair chance in life. She did well in our primary school leaving exams despite all the obstacles in her way, but she never made it through secondary school. She couldn’t afford it.

I am saddened when I think of where Agnes probably is now – still very poor, still working very hard to look after her family, still with no options for her life. And I am haunted by how unfair this is for her, but also for the rest of us. Just think what we are all missing because we never get to see everything that someone like Agnes could have achieved. Think of the talent, the innovation, the creativity that we are missing out on.  Think of how many scientists or engineers are pounding maize or fetching water as we speak.  Think of how many doctors, teachers are herding goats or digging the dry earth?  Imagine a fairer world where we could harness that talent, and every child had a chance. Imagine what we could achieve.

Our vision for the future of global development must include finding radical new ideas to tackle this grotesque inequality of opportunity, and this short sighted squandering of our greatest asset – the brains and talents of humanity.

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So where can we look for the big new ideas? One answer will be universities. We must not underestimate the power of academia. It was the work done in universities and think tanks that laid the foundations for the rise of neo-liberalism – what the governor of the Bank of England calls ‘market fundamentalism’, the ideology of which has come to dominate the world so totally in the past 30 or 40 years, creating untold wealth for the few, whilst driving levels of inequality that hadn’t been seen in a hundred years. Such a seismic shift would not have been possible without academics laying the groundwork. Universities must again be ready to play their part to take the world in a new direction – but a better direction this time.

The Human Economy for Oxfam is one in which governments act on behalf of the majority, and not in the interests of a tiny but powerful elite. In which people are valued equally, and not disregarded on the basis of their gender or colour or caste.

In which we ask how the economy can work better for women, and not the other way round. In which businesses show as much concern for their workers, their customers and the communities within which they exist as they do for their shareholders and boards. It’s an economy where the astonishing advances of technology become something to be welcomed and celebrated by all, rather than something to be feared because it will mean job losses for workers and more wealth for those who own the machines. I would like to say a little more now about each of those three areas: government, business and technology.

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On government, we know that poverty and extreme inequality are not natural falling down from the clouds like rain.  Extreme and widening inequality is a failure of government.  It’s the product of political and economic choices. Almost four decades ago, governments – prompted by the market fundamentalists – began the process of economic liberalisation and deregulation and it continues today.  As governments took more of a back seat, a privileged few – particularly those who had ready access to capital - were able to push ahead, driving today’s inequality crisis.  In giving economic freedom to those at the top, it is as if government has forgotten about the freedoms of all the rest.  It is as if the teacher has retreated to the classroom, and left the bullies in charge of the playground; that’s how it feels.

At the same time across the world we have seen a narrowing of democratic space in country after country, as governments clamp down on hard won democratic freedoms of the majority.  These two forces are linked.  Extreme inequality and democracy cannot co-exist for long. There has to be a choice made: either greater equality, or less democracy.  Government after government is making the wrong decision on this.

Accountable, democratic government is the most powerful equalising force that humanity has ever invented.  It is at the heart of the Human Economy. That’s why we must fight for Governments to be accountable to their citizens and not the vested interests of big business or the super rich. Governments must be bold in standing up to those interests, and in using all the tools available to them – including taxation and public spending – to actively tackle economic and social inequalities.

There are examples we can look at for inspiration here. Take Brazil. Brazil is one of the few countries in the world where the incomes of the poorest 50% actually has been growing at a faster rate than the income of the richest 10% in recent years. True, there is still a long way to go in that country, but it is encouraging to see the positive impact of some very sensible and actually not very radical government policies – such as, a higher minimum wage, more progressive taxation, increased investment in essential public services and social protection programmes.  Nothing is more powerful in fighting inequality than universal healthcare or education. Think of the power of the National Health Service, giving everyone in Britain, rich or poor, the freedom from fear of sickness – an amazing institution. You know sometimes I want to jump out of my office and join those junior doctors who are striking to defend the National Health Service!

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International development has focussed very much on aid.

Aid will remain important for many countries for a long time to come – especially for fragile and conflict affected states. But ultimately, governments in poorer countries must be able to mobilize their own resources, and be able to account before their own citizens how they spend those resources. First, for this to be possible, citizens everywhere must pressure their governments to reject global trade agreements that risk making companies more powerful than governments. And citizens must push governments to radically reform global tax rules that are making it so easy for the richest individuals and the biggest multinationals to avoid paying their fair share of tax in the countries where they operate – because this is only shifting the burden of taxation further onto those least able to afford it.

Multinationals are blackmailing governments to give them ludicrous tax breaks, with the threat of taking their operations elsewhere if governments don’t concede. This is driving a race to the bottom on tax, much like the race to the bottom that we’re also seeing on wages, on workers’ rights and environmental sustainability. It’s estimated that poor countries are losing at least $170 billion every year because of tax avoidance–just the legal ways that companies can avoid paying their fair share- this is more than the total amount that these same countries are receiving in aid.  We are seeing a huge groundswell of public anger against tax dodging, and also some progress against it- we must keep up the fight, against the Googles, the Starbucks and the billionaires who are paying lower tax rates than their secretaries or cleaners. We must continue fighting!

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So on business, responsible businesses must have a central role to play in our vision for a Human Economy.

Many have pointed out that the private sector must invest in order to achieve the Sustainable Development Goals, but it is also sensible to identify which goals are most appropriate for the private sector to invest in. Of course, a goal like sustainable energy makes sense, but there are goals which must truly remain publicly funded – universal health for example. Experience shows that the only way of ensuring decent public services for all is when governments take responsibility for delivering them, and for citizens to hold those governments accountable for how they deliver.  The role of the private sector here is primarily to ensure that they pay their taxes.

We are often accused Oxfam, of being ‘anti-business’. This is not true. We work with many private sector actors to find innovative ways to help those in need. A great deal of our work is with communities around the world evolving, helping them to develop their own businesses and gain access to markets.

Let me give you an example. In east and central Africa we enjoy eating cassava leaves and the Diaspora, our people when they leave Africa they still want to eat cassava leaves which are not there in Europe and America. So in Rwanda we worked with one very enterprising man who had realised that if he could find a way to dry these leaves and make them non-perishable, he could export them to Diaspora communities around the world and create a business for himself. Oxfam helped him to source and buy a bespoke processing plant. The business man then made an agreement with women farmers groups to buy cassava leaves from them at a fair price.

Now, more than 2000 women farmers in this area in Rwanda have increased their incomes and are keeping their children in school. One of them told me when I met her recently very proudly: “I don’t have to ask my husband for soap and body cream”. She can afford it.  And the businessman has become a wealthy exporter to Europe, to Canada, to USA and even Australia, exporting cassava leaves.

So we are not ‘anti-business’. What we are against is the kind of business that puts profit above all other considerations and, as a result, decides to pay poverty wages because you can get away with it. Decides to stash money in tax havens rather than contribute to the society on which the business depends. Or businesses that decide to cut corners rather than ensure sustainability of the environment. Or businesses that actively lobby for the opportunity to abuse their workers and destroy the planet. They put billions of dollars to lobby the European Union, the Congress in America to push for higher profits, to damage the world and keep wages down.  We are certainly “anti” these kinds of businesses! And we bash them and we don’t regret.

But we also invest in thinking creatively about different ways of running the private sector companies. Where workers could have more of a controlling interest for example.

So this could mean for example, these are some of the ideas: creating more democratic decision making processes within companies. If you take an example of a country like Germany, pay ratios in that country haven’t spiralled upwards in the way they have done here in the UK or the US – and that’s because employee representation on remuneration committees prevents that from happening. Employees sit on remuneration committees – so more democratic decision-making.

But we could take it even further: employee-ownership models are on the rise in many countries. These cut the distance between decision-makers and those impacted by the decisions. At Oxfam, we are proud of our role in supporting co-operatives such as Amul in India, which is the largest milk brand – and is jointly-owned by 3.6 million Indian dairy farmers, the largest milk brand.

These are businesses that, when successful, automatically share value and profits with workers and farmers – rather than with shareholders who are often remote from the reality of the business or the community within which it exists. So there are new ways, there are other ways to do business. The current model is not a fixture in time. We can change models of business and we think creatively about that. 

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Third: technology.

As new technologies continue to be developed, the question of who controls them, who stands to profit from them becomes ever more important.  Technological progress is at the heart of the Human Economy.  Technology has incredible power to liberate.  I think of the power of electricity, grinding cereal, or pumping water, releasing women from countless hours of backbreaking work and allowing children to stay in school.

We must build societies in which the arrival of new technology brings hope and the promise of shorter working hours, less back-breaking labour, better quality of life. But right now, most countries are far from that. We’ve been doing a lot of work with tea pickers in Assam, in India. With a little support from us, they have been successful in driving up wages and their working conditions. But now their bosses have said to them, that if wages go up any more they might decide to invest in machines that can take the place of the tea pickers almost entirely. Whole communities would become jobless, with no realistic prospect of finding alternative employment without moving into the cities in the slums hundreds of miles away.

Our Human Economy must strike a careful balance when it comes to the interests of innovators and the public interest. Of course, it’s right that there should be fair reward for those who pioneer new technologies –they invest significant sums and take risks in the process. That’s why there’s copyright law and intellectual property protection. But there must be limits to it. Such patents can create monopolies, allowing their owners to accumulate vast wealth that is wildly disproportionate to the investment they’ve made.

When it comes to access to medicines, an area we’ve worked on again at Oxfam, the imbalance can too often be akin to a death sentence. The current R&D system is skewed towards rewarding innovation at the expense of people’s health, and it undermines the human right to health.

We saw an extreme example just a few months ago when an American former hedge-fund manager bought the patent for a drug called Daraprim, which treats a life-threatening parasitic infection. The new owner bumped up the price overnight from $13.50 to $750 a tablet, instantly ensuring that it could not be available, or it could only be available for the rich. Martin Shkreli, the CEO of Turing that bought the drug, he said and I want to quote him, when he was challenged about this: “No-one wants to say it. No-one is proud of it. But this is a capitalist society, capitalist system and capitalist rules”. This was his answer.  We also saw this in the unaffordable prices of HIV treatment a few years ago and we see it now in the medicine to treat hepatitis C, which costs $1,000 a day. $1,000 a day! How rich must you be?

This is completely unacceptable. Nor is this only a problem for developing countries: new cancer medicines are now reaching the market at prices that are unaffordable whether in Europe or in the US.

So the current global R&D model has failed patients all over the world.  Pharmaceutical companies justify their high prices by the need to recover their R&D costs – yet the actual R&D cost is kept secret and the companies ignore the fact that a lot of research is often done by public money in universities and research institutions. There is a real issue there.

So one of our greatest campaigns was standing with others to face down pharmaceutical companies to ensure generic companies could compete to reduce the price of HIV medicines. From $10,000 per patient per year to around $100 today. Because of that campaign, millions of people are alive today.

In a human economy, we need a new approach entirely. We must separate the financing of R&D from the pricing of medicines. It can’t be left to the Pharma industry to cater only for those who can afford to pay high prices – practically deciding who lives and who dies.

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And finally the Human Economy must be one that lives within the boundaries of the planet.  Oxfam has demonstrated that whilst the poorest people live in the areas hardest hit by climate change, the poorest half of the population are responsible for only 10% of global emissions. It isn’t the most vulnerable and the poorest people who have caused this climate crisis. Take my peasant uncle in his village in Uganda. It will take him 180 years to register the same emissions as an average American would in one year. 180 years!  Our broken economic system is not only failing to deliver for the majority, it is destroying the planet for our children and our grandchildren. 

We have the ability to live within our planetary boundaries, with the technology we have.  That is why for Oxfam the fight against extreme inequality and the fight against climate change are joint struggles and against the same enemy: a dangerous, destructive economic system that has to change, and change fast.

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So these are just some of the questions that an institute such as the Global Development Institute might seek to answer when defining a Human Economy, instead of the economy we are living in now. How do we create a more human economy which works for women as well as men? How do we make sure that governments are accountable and act in the interests of their citizens, rather than the multinational corporations and the super rich? How can we support and grow the kinds of businesses that will contribute positively to societies within which they exist? How can we ensure that technologies make life better for the worlds poorest, rather than leaving them still further behind? How can we ensure that inequalities of wealth do not translate into inequality of access to life-saving medicines?  How can we preserve and protect the planet for future generations? How can we create a world in which both extreme poverty and extreme wealth belong to the history books, and become relics of a bygone age?

In defining the Human Economy we need big, bold, new ideas.  We will be ridiculed as naive, envious, seditious or all of that! See that as a badge of honour, at least I do.  Once upon a time, the idea of workers only working an 8 or 10 hour day seemed impossibly radical. The idea of having a two day weekend was out of the question. Paid holidays? Not a chance! And yet most of us now take these for granted. So those garment workers in Myanmar are doing all they can to make such ideas for themselves true and we must support them in that.

Manchester University has a great history of radical thought, as Professor Hulme has reminded us. It has a history of supporting the struggles of the oppressed. I had my opportunity here to support the anti-apartheid struggle, an opportunity I hadn’t had in my country Uganda. But here with university students we were picketing and asking the university to take its money out of Barclays bank.

Manchester University has a history of supporting the struggles of the oppressed, once again. The question you must ask yourselves now is what does success look like for you? For what it’s worth, I think the success of this institute will be measured, at least in part, by whether or not the work and ideas that you produce resonate, resonate with and feel relevant to the struggle of those garment workers I talked about, and to the millions of others like them. Who are sitting below or just above the so-called poverty line and who have the odds stacked against them. But who are also determined to imagine a more equal world and a better future. 

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