Collapse of humanity into extreme inequality

By Dr. Santosh Kumar Mohapatra*

Oxfam International is a movement of people, who are working to end discrimination and seeks to create a free and just society. It produces an Inequality report each year ahead of the World Economic Forum’s Davos Agenda based on Forbes’ Annual World’s Billionaires List, the Global Wealth Report of Credit Suisse, World Inequality report released by the World Inequality Lab.

The term inequality refers to a condition of being unequal, or of being given an unequal share of treatment, status, or opportunity. People are often aware of inequalities in social status, human rights, education, job availability, and income opportunities. A continued perception of racial, social, and wealth inequality and discrimination continue to plague society, causing discontent, anger, and even fear.

In order words, term inequality refers generally to a condition of unevenness, or to unfair treatment, which takes many forms in society. Individuals experience a sense of inequality in many areas of their lives, from being treated unfairly because of their race, gender, sexual orientation, or another trait, to feeling despondent about a lack of educational opportunities and high-paying jobs.

Last year, it has presented its inequality report titled “The Inequality Virus” on 25 January 2021. In that report it had warned that the coronavirus pandemic has the potential to lead to an increase in inequality in almost every country at once.

For year 2022, in its report titled ‘Inequality Kills’ released on 17 January 2022, the first day of the World Economic Forum’s online Davos Agenda summit, non-profit Oxfam International said inequality is contributing to the death of at least 21,000 people each day, or one person every four seconds. This is a conservative finding based on deaths globally from lack of access to healthcare, gender-based violence, hunger, and climate breakdown.


According to a report, in the first two years of the COVID-19 pandemic (From March 2020 to November 2021) the wealth of the 10 richest men has doubled to $1.5 trillion (over ₹111 lakh crore) at a rate of $1.3 billion (₹9,000 crores) a day, while the incomes of 99% of humanity are worse off and over 16 crore people were forced into poverty even as the world’s ten richest men saw their fortune more than double.

According to Oxfam, billionaires’ wealth has risen more since COVID-19 began than it has in the last 14 years. At USD 5 trillion, this is the biggest surge in billionaire wealth since records began. The world’s ten richest men saw their fortunes grow at a rate of $15,000 per second during the first two years of the pandemic and if these ten men were to lose 99.999% of their wealth tomorrow, they would still be richer than 99% of all the people on this planet. According to Oxfam International’s Executive Director Gabriela Bucher, they now have six times more wealth than the poorest 3.1 billion people.

Wealth has surged globally during the pandemic as the value of everything from stock prices to crypto and commodities has jumped. The world’s 500 richest people added more than $1 trillion to their net worth last year, according to the Bloomberg Billionaires Index.

Similarly, Forbes 2022 World’s Billionaires list (i.e. 36th Billionaires List) found that the planet’s 2,668 billionaires are worth $12.7 trillion.

The World Inequality Report 2022 presents the most up-to-date and complete data on the various facets of inequality worldwide as of 2021: global wealth, income, gender, and ecological inequality. The analysis is based on several years’ work by more than one hundred researchers from around the world and will be published by the World Inequality Lab. The data is available in the most complete database on economic inequality, the World Inequality Database. The study has been coordinated by economists Lucas Chancel, Thomas Piketty, Emmanuel Saez, and Gabriel Zucman.

The World Inequality Report 2022 highlighted that income and wealth inequalities have been on the rise globally since the 1980s. In 2021, after three decades of trade and financial globalization, global inequalities remain extremely pronounced.

National average income levels are poor predictors of inequality: among high-income countries, some are very unequal (such as the US), while others are relatively equal (e.g., Sweden). The same is true among low- and middle-income countries, with some exhibiting extreme inequality (e.g., Brazil and India), somewhat high levels (e.g., China), and moderate to relatively low levels (e.g., Malaysia, Uruguay).

Similarly, global inequalities seem to be about as great today as they were at the peak of Western imperialism in the early 20th century. An average adult individual earns $23,380 per year in 2021, and the average adult owns $102,600. These averages mask wide disparities both between and within countries.

The richest 10% of the global population currently takes 52% of global income, whereas the poorest half of the population earns 8.5% of it. On an average, an individual from the top 10% of the global income distribution earns $122,100 per year, whereas an individual from the poorest half of the global income distribution makes $3,920 per year.

The picture is shoddier when it comes to wealth inequalities. Global wealth inequalities are even more pronounced than income inequalities. The poorest half of the global population barely owns any wealth at all, possessing just 2% of the total. In contrast, the richest 10% of the global population own 76% of all wealth. On average, the poorest half of the population owns $4,100, and the top 10% own $771,300.

The wealth of the richest individuals on earth has grown at 6 to 9 percent per year since 1995, whereas average wealth has grown at 3.2 percent per year. Since 1995, the share of global wealth possessed by billionaires has risen from 1 percent to over 3 percent. This increase was exacerbated during the COVID pandemic. In fact, 2020 marked the steepest increase in global billionaires’ share of wealth on record.

First Crisis, Then Catastrophe.

“First Crisis, Then Catastrophe”, published by Oxfam International on 12 April 2022 shows that 86 crore people could be living in extreme poverty — on less than $1.90 a day — by the end of this year. This is mirrored in global hunger: the number of undernourished people could reach 82.7 crores in 2022.

The World Bank had projected COVID-19 and worsening inequality to add 19.8 crores of extreme poor during 2022, reversing two decades of progress. Based on research by the World Bank, New Oxfam estimates show that due to the combined impact of COVID-19, inequality, and food and energy price inflation – are accelerated by the war in Ukraine, a total of 26.3 crores more extreme poor this year —equivalent to the populations of the UK, France, Germany, and Spain combined.

The rising global food prices alone will push 6.5 crores more people into extreme poverty. Poorer countries face looming debt crises and the purchasing power of wages is depressed, while corporate profits soar and billionaire wealth reaches unprecedented levels.

According to Oxfam International executive director Gabriela Bucher, “Without immediate radical action, we could be witnessing the most profound collapse of humanity into extreme poverty and suffering in memory.” “This terrifying prospect is made more sickening by the fact that trillions of dollars have been captured by a tiny group of powerful men who have no interest in interrupting this trajectory.”

As many people struggle now to cope with sharp cost-of-living increases, having to choose between eating or heating or medical bills, the likelihood of mass starvation faces millions of people already locked in severe levels of hunger and poverty across East Africa, the Sahel, Yemen, and Syria.

The brief notes that a wave of governments is nearing a debt default and being forced to slash public spending to pay creditors and import food and fuel. The world’s poorest countries are due to pay $43 billion in debt repayments in 2022, which could otherwise cover the costs of their food imports. Global food prices hit an all-time high in February, surpassing the peak crisis of 2011. Oil and gas giants are reporting record-breaking profits, with similar trends expected to play out in the food and beverage sector.

People  in poverty are being hit harder by these shocks. Rising food costs account for 17 percent of consumer spending in wealthy countries, but as much as 40 percent in Sub-Saharan Africa. Even within rich economies, inflation is super-charging inequality: in the US, the poorest 20 percent of families are spending 27 percent of their incomes on food, while the richest 20 percent spend only 7 percent.

For most workers around the world, real-term wages continue to stagnate or even fall. The effects of COVID-19 have widened existing gender inequalities too — after suffering greater pandemic-related job losses, women are struggling to get back to work. In 2021, there were 1.3 crores fewer women in employment compared to 2019, while men’s employment has already recovered to 2019 levels.

The report also shows that entire countries are being forced deeper into poverty. COVID-19 has stretched all governments’ coffers but the economic challenges facing developing countries are greater, having been denied equitable access to vaccines and now being forced into austerity measures.

Despite COVID-19 costs piling up and billionaire wealth rising more since COVID-19 than in the previous 14 years combined, governments — with few exceptions — have failed to increase taxes on the richest.

Oxfam International rejects any notion that governments do not have the money or means to lift all people out of poverty and hunger and ensure their health and welfare. We only see the absence of economic imagination and political will to actually do so.

“Now more than ever, with such scale of human suffering and inequality laid bare and deepened by multiple global crises, that lack of will is inexcusable and we reject it. The G20, World Bank, and IMF must immediately cancel debts and increase aid to poorer countries, and together act to protect ordinary people from an avoidable catastrophe. The world is watching”.

Oxfam is calling for urgent action to tackle the extreme inequality crisis threatening to undermine the progress made in tackling poverty during the last quarter of a century.

According to Oxfam, an annual wealth tax on millionaires starting at just 2 percent, and 5 percent on billionaires, could generate $2.52 trillion a year —enough to lift 230 crore people out of poverty, make enough vaccines for the world, and deliver universal healthcare and social protection for everyone living in low and lower-middle-income countries.

Oxfam suggests:

Introduce one-off and permanent wealth taxes to fund a fair and sustainable recovery from COVID-19. Argentina adopted a one-off special levy dubbed the ‘millionaire’s tax’ that has brought in around $2.4 billion to pay for pandemic recovery.

(1) ending crisis of profiteering by introducing excess profit taxes to capture the windfall profits of big corporations across all industries. Oxfam estimated that such a tax on just 32 super-profitable multinational companies could have generated $104 billion in revenue in 2020.

(2) to cancel all debt payments for developing countries that need urgent help now. Canceling debt would free up more than $30 billion in vital funds in 2022 alone for 33 countries already in or at high risk of debt distress.

(3) Boost aid and pay for Ukrainian assistance and the costs of hosting refugees with new funding, rather than shift aid funds earmarked for other crises in poorer countries.

(4)  Reallocate at least $100 billion in Special Drawing Rights (SDR), without burdening countries with new debt or imposing austerity measures. The G20 promised to deliver $100 billion in recycled SDRs but only $36 billion has been committed to date. A new SDR issuance should also be considered and distributed based on needs rather than countries’ quota shares at the IMF.

(5) Act to protect people from rising food prices, and create a Global Fund for Social Protection to help the poorest countries provide essential income security for their populations, and maintain these services in times of severe crisis.

(6)  There is a need for a global economic rescue plan. G20 leaders, the IMF, and World Bank, together with all leaders, must act. They must protect people from the crisis’ harsh impacts, expand cash transfers and control food prices, reject austerity, and tax and invest progressively.

(7) Rich countries must urgently cancel unpayable debt payments from poorer countries; reallocate IMF Special Drawing Rights to lower-income countries, and increase additional aid. The IMF and World Bank must participate in debt relief efforts, and increase concessional financing, and the IMF must refrain from promoting austerity.

In reality, the situation is more precarious in India. It is the second most unequal country after Brazil in the world. Indian Prime Minister Narendra Modi has not once touched upon the issue of widening income and wealth inequality in the eight years of his rule.

In his Independence Day Speech in 2019, Modi said, “Let us never see wealth creators with suspicion. Only when wealth is created, wealth will be distributed.” But the empirical fact is that national wealth has not been evenly distributed and in fact, left to the market, can never be automatically distributed. India’s social development indices are a testament to the unequal income and wealth distribution.

When it comes to paying tax, there is one rule for the super-rich and big companies and another for ordinary people. While the most powerful get away with paying little or nothing, ordinary citizens are left to foot the bill for government spending.





The author is an Odisha-based eminent columnist/economist and social thinker. He can be reached through e-mail at [email protected]

DISCLAIMER: The views expressed in the article are solely those of the author and do not in any way represent the views of Sambad English.




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