The world is facing an “inequality crisis”. Fourteen per cent of the global population living in 46 countries are facing serious impediments which are directly hampering their ability to progress economically and graduate from the least developed country category. This was observed by the World leaders at the fifth United Nations Conference on the Least Developed Countries held in Doha on 6 March. The double shock of the COVID-19 pandemic in consecutive two years( 2020, 2021) followed by the Russian invasion of Ukraine has been accompanied by an uptick in income and social inequalities, according to the Editorial of the ICC Bangladesh quarterly News Bulletin (Jan-Mar’23) published today.
Millions are still reeling from the continuing impact of COVID-19, which has already killed over 20 million people. Poverty has increased for the first time in 25 years, according to the OXFAM report “Survival of the Richest” published on the opening day of the World Economic Forum in Davos on 16 January.
The very richest have become dramatically richer and corporate profits have hit record high, driving an explosion of inequality. The richest one per cent grabbed nearly two-thirds of all new wealth worth $42 trillion created since 2020. A billionaire gained roughly $1.7 million for every $1 of new global wealth earned by a person in the bottom 90 per cent. Billionaire fortunes have increased by $2.7 billion a day. This comes on top of a decade of historic gains —the number and wealth of billionaires having doubled over the last ten years, the Report added.
In 2022, the World Bank announced that we will fail to meet the goal of ending extreme poverty by 2030, and that ‘global progress in reducing extreme poverty has come to a halt,’ amid what it said was likely to be the largest increase in inequality and the largest setback in addressing poverty since World War II. The IMF is forecasting that a third of the global economy will be in recession in 2023. For the first time, the UNDP has found that human development is falling in nine out of 10 countries.
The lessons learned from these crises, and their interaction with inequality and exclusion will be critical to better prepare for the future. While disasters created by people and generated by nature have increasingly become a daily reality for many in different parts of the world, policies at the global, regional, and national levels, have yet to catch up with this new reality.
Given the situation, it is almost certain that the goal to end extreme poverty by 2030 will not be achievable. At least 1.7 billion workers now live in countries where inflation is outstripping wages. Millions are struggling to find food, pay their bills or heat their homes and tens of millions more people are facing hunger. Climate breakdown is crippling economies and people are forced to leave their homes due to droughts, cyclones and floods.
According to new analysis by the Fight Inequality Alliance, Institute for Policy Studies, Oxfam and the Patriotic Millionaires, an annual wealth tax of up to 5 percent on the world’s multi-millionaires and billionaires could raise $1.7 trillion a year. This is enough to lift 2 billion people out of poverty, fully fund the shortfalls on existing humanitarian appeals, deliver a 10-year plan to end hunger, support poorer countries being ravaged by climate impacts, and deliver universal healthcare and social protection for everyone living in low- and lower middle-income countries.
Our leaders need to adopt policies for new economic processes and structures to create a fairer, more equal world and to save our planet.