CEO Blog

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Did you hear the one about 62 billionaires with the same wealth as half the world?

 
When one talks about 62 billionaires on a bus with the same wealth as the poorest half of the global population, it may sound like the start of a surreal joke – a bad one, with no punchlines and no laughs, except for the privileged few. 
 
That’s because the world has become a much more unequal place and the speed of the runaway inequality bus is accelerating. 
 
Although world leaders have increasingly talked about the need to tackle inequality, and in September agreed a global goal to reduce it, the gap between the richest and the rest has widened dramatically in the past 12 months. 
 
We now have a world where 62 people – so few they would fit on a single coach – own as much as the poorest half of the world’s population. This number has fallen from 80 last year and 388 as recently as 2010.
 
 
Above: Faith is a banana farmer in Zambia, where she struggles to make ends meet. Zambia is among the top ten fastest growing economies in the world, yet despite economic growth, inequality is getting worse and most of the population are not seeing the benefits of this economic development. The number of people living below the $1.25 poverty line grew from 65 percent in 2003 to 74.5 percent in 2014. Photo: Abbie Trayler-Smith/Oxfam
 
The wealth of the richest 62 has increased by more than half a trillion dollars to $1.76 trillion (approximately €1.62/£1.22tr.). Meanwhile, the wealth of the poorer half of the world has fallen dramatically by 41% since 2010, despite the global population increasing by around 400 million people during that period.
 
These shocking statistics are highlighted in a new Oxfam report, An Economy for the 1%, which has been published ahead of this week’s annual gathering of the world’s financial and political elites at the World Economic Forum in Davos, Switzerland.
 
Oxfam’s prediction – made ahead of last year’s Davos – that the 1% would soon own more than the rest of us by 2016, actually came true in 2015, a year earlier than expected.
 
 
 
Above: Faith outside her house. Faith lives with her husband Jackson and six children (her two daughters, granddaughter, two nephews, and niece) in Chiawa, Zambia. It’s a rural area with few transport links, health centres, and employment opportunities. One of the reasons inequality in Zambia is so bad is because global tax rules allow multinational mining companies to generate vast profits from their operations in the country, whilst paying very little tax. Lost revenue is desperately needed to improve infrastructure and invest in public services. Oxfam’s research has shown that this is one of the most effective ways of tackling extreme inequality. Photo: Abbie Trayler-Smith/Oxfam
 
Poorer people are paying the price of rapidly increasing inequality. Far from trickling down, income and wealth are instead being sucked upwards at an alarming rate. 
 
Rather than an economy that works for the prosperity of all, we have instead created a global economy for the 1%. Ordinary working families are up against odds that are impossible to beat. The big winners are those at the top and our economic system is heavily skewed in their favour. 
 
Power and privilege allows the richest individuals and companies to write the rules of the economic game to avoid paying their fair share to society. An elaborate system of tax loopholes and an industry of wealth managers ensures that vast wealth stays untaxed, far from the reach of ordinary citizens and their governments. 
 
This potential tax revenue is needed to pay for vital services like schools and hospitals; the services which play a vital role in tackling inequality and escaping poverty. It means governments keep putting their hands in the pockets of ordinary taxpayers to pay for the shortfall – many of whom can least afford it.
 
 
Above: “I only manage through survival. It’s just survival,” says Barbara Chinyeu, an Oxfam-supported banana farmer in Zambia, pictured with her children 10-year-old Gertrude and Edward, aged 5. Barbara is a widow who risks her life every day by gathering water in a crocodile-infested river so she can to irrigate her crops and feed her two children. Photo: Abbie Trayler-Smith/Oxfam
 
Oxfam analysed more than 200 companies, including the world’s biggest and the World Economic Forum’s strategic partners, and has found that 9 out of 10 companies analysed have a presence in at least one of 10 jurisdictions classified by the report as the most aggressive for tax avoidance, a list that includes Ireland.
 
It is estimated that tax dodging by multinational corporations costs developing countries at least $100billion every year. Globally, it is estimated that a total of $7.6tr of individuals’ wealth sits offshore (i.e. is deposited in low-tax jurisdictions) – a twelfth of the total. If tax were paid on the income that this wealth generates, an extra $190billion would be available to governments every year.
 
Just consider how that money could help the vulnerable poor in a country such as Malawi, for example. 
 
Video below: Hear a nurse and teacher in Malawi speak about their daily challenges to help patients and pupils.
 
 

Inequality in Malawi: Health & Education

Because despite growing wealth among the urban elite over the past seven years, Malawi – one of the world’s poorest countries with seriously under-resourced health and education systems – has also seen inequality increase. 
 
As well as a crackdown on tax dodging Oxfam is urging world leaders to increase investment in public services and act to boost the income of the lowest paid. 
 
The new Oxfam report shows how women globally are disproportionately affected by inequality – of the current ‘62’, 53 are men and just nine are women. The majority of low paid workers around the world are women. 
 
Oxfam Ireland is also calling on our politicians to do more to end the gender pay gap that sees that sees women earn less than men (almost 14% in the Republic of Ireland; 12.5% in Northern Ireland).
 
It is time our politicians take note and reject this broken economic model. We cannot continue to allow hundreds of millions of people to go hungry while resources that could be used to help them are sucked up by those at the top.
 
Inequality is not inevitable. Inequality is the result of policy choices. We need our leaders to tell the 1% that the 99% and particularly those struggling to make ends meet here and overseas have had enough.
 
 
Above: Barbara carries water to her house. Photo: Abbie Trayler-Smith/Oxfam
 
Oxfam is calling for urgent action – a crackdown on tax dodging, increased investment in public services and action to boost the income of the lowest paid – to tackle the inequality crisis and reverse the dramatic fall in wealth of the poorest half of the world. 
 
Allowing governments to collect the taxes they are owed from companies and rich individuals will be vital if world leaders are to meet their new goal, set last September, to eliminate extreme poverty by 2030. 
 
As a priority, Oxfam is calling for an end to tax dodging which has seen increasing use of offshore centres by rich individuals and companies to avoid paying their fair share to society. This has denied governments valuable resources needed to tackle poverty and inequality. 
 
With 2016 being an election year throughout Ireland, north and south, Oxfam is calling on election candidates to prioritise inequality and inviting voters to join its campaign calling on politicians to tackle tax dodging, roll out universal access to healthcare and end the gender pay gap in their respective new programmes for government.
 
 
Jim Clarken is Chief Executive of Oxfam Ireland. Follow him on Twitter here.
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Budget 2016 lost opportunity for real tax transparency

The Irish government’s final budget is a lost opportunity for real tax transparency needed to ensure a fair recovery for all.
 
We need to wipe out the secrecy that facilitates corporate tax dodging. Corporate tax dodging means governments keep putting their hands in the pockets of ordinary taxpayers to pay for the shortfall – many of whom can least afford it.
 
Minister Noonan announced today that Ireland will be one of the first countries to require companies operating here to declare to tax authorities how much tax they pay and where in line with new OECD recommendations. However, Ireland’s tax authorities will not have to share the information or force companies to publish their reports.
 
The government has moved in the right direction with measures announced today but missed the opportunity to show real leadership by ensuring companies publish their results so citizens are aware of exactly what they earn where, what they owe where and what they actually pay in tax.
 
18,000 people petitioned Minister Noonan last week asking him to make tax fair as part of Oxfam’s campaign against inequality. By dodging their tax liabilities, big businesses are constraining the ability of governments worldwide to tackle inequality and provide critical services. Ordinary people in rich and poor countries alike lose out as a result of tax havens, tax competition and a lack of transparent data on financial activities.
 
We recognise the government’s efforts over the past two years to deliver this action plan.  But this tax package must mark the beginning, not the end of global tax reform.  We need reforms that genuinely create an international tax system which works in the interests of the majority – not the few.
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Allowing children to drown in our seas is an affront to the humanity of the European people

The tragic and profoundly inhumane situation faced by refugees across Europe must end. The Irish and UK Governments must act immediately to meet our obligations under international law and demonstrate humanitarian leadership in Europe. Accepting 600 people into Ireland and only 216 Syrian refugees into the UK while children’s bodies wash up on the shores of the Mediterranean is an absolute affront to the decency and kindness of the public. We cannot stand by and watch this crisis unfold while pictures of such incredible suffering flood our screens. Saving lives must be the first priority for Irish, UK and EU migration policy.

Resettling refugees will not solve this crisis but it could save thousands of lives. We cannot pretend this is not our responsibility – this challenge has to be taken on by everybody, and we can’t wait for Europe – which has abjectly failed to decide on an appropriate, human rights-based response. The governments’ efforts must be increased with urgency. An Taoiseach must immediately convene an emergency meeting of the Dáíl to decide on Ireland’s response. This is a clear time for Ireland to lead by example and not shirk behind excuses such as we have heard from leading politicians across Europe over the last month. We must act now to show our solidarity with people desperately fleeing for their lives – in the same way that solidarity was shown to people from Ireland, north and south, when we fled death and devastation in our own country.”

In Italy, Oxfam is responding to the needs of vulnerable refugees who have been rescued from the waters of the Mediterranean. We also provide immediate and life-saving assistance to those affected by the conflict within Syria and the surrounding region. We have seen first-hand the terrible circumstances which force people to risk their own lives, and the lives of their children, by getting into the water on unsafe boats. The only solution to this appalling situation is political. World leaders, particularly the members of the UN Security Council, must immediately take action to secure peace and end the mass violations of international humanitarian law.”

The consequences of inaction in the face of this crisis will be far reaching and tragic. Europe absolutely has the ability to absorb refugees beyond current levels. This must be the starting point which guides the decisions which will be made at the EU ministerial meeting on September 14th. Europe has a responsibility to protect the vulnerable and respect the rights and human dignity of refugees arriving at its borders. There’s an urgent need for a unified position in Europe, where each member state makes the effort required to provide safe haven. We call on the Irish and UK Governments to increase the numbers of refugees we are accepting, and to join the Common European Asylum Policy as the first step in a credible response to this unprecedented humanitarian emergency.

Europe must offer safe and legal routes for refugees to seek protection rather than fortify our borders, and our governments’ roles will be crucial in ensuring safe passage for desperate people.

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Nepal now facing a double disaster

Just over two weeks since a devastating earthquake struck Nepal, there has been a second major quake.

Our teams there are rapidly assessing the situation. They include Dubliner Colm Byrne, who experienced the quake in Chautara (approx. 40km from the epicentre). 

Chautara is in the Sindhupalchowk province, the region worst affected by the first earthquake on April 25. Colm says people were afraid of the aftershocks and landslides that could follow.

“It was very powerful,” Colm says. “The ground was shaking and buildings were collapsing. I’ve also seen people being carried on stretchers.”

Oxfam is helping over 60,000 people over seven districts in Nepal, delivering clean water, emergency toilets, shelter, food assistance and hygiene kits. Reaching communities in the country’s rural districts has been challenging and initial reports suggest fresh landslides have cut off some areas.

Colm and his colleagues were fortunate not to have been beside buildings when the earthquake struck at around 12:35 Nepali time (approx. 07:50 Irish time). They were very shaken but immediately got back to work. Their concern is for those thousands of families who must now cope with what is a double disaster.

It was already a race against time to reach people before the monsoon season arrived at the beginning of June. It’s now more vital than ever for us to be able to reach as many people as possible.

“People are shocked and scared by what’s happened. They are too afraid to sleep in their homes so one of things Oxfam is trying to do is to provide spaces for people to sleep outdoors,” Colm says.

“One of the big challenges is that this is a hugely mountainous country with very few large, flat open air spaces where people can gather safely. We’ve just done an assessment this afternoon to find alternative locations.

“Whilst we don’t yet know the full extent of this second major earthquake, we do know that the people of Nepal will need much more support to help them put their lives back together.”

Thousands of you have already generously donated to this crisis and your money is helping to provide immediate aid to those in desperate need. If you haven't done so already, you can donate here, in your local Oxfam shop or by calling 1850 30 40 55.

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By 2016 the top 1% will be richer than the rest of the world combined

High up in the Alps, world leaders will later this week make their annual pilgrimage to the Swiss resort of Davos for the World Economic Forum annual meeting.
 
The threat posed by growing inequality – one acknowledged by a diversity of attendees – will again be one of the main talking points at the invite-only event where politicians rub shoulders with business leaders, social entrepreneurs, technology innovator, philanthropists, media and NGOs. 
 
The summit last year identified economic inequality as a major risk to human progress, while Oxfam reported that just 85 people owned as much wealth as the poorest 50 per cent – or 3.5 billion people. 
 
Our new research paper published today shows that shows inequality is getting even worse – the exclusive club has now shrunk to just 80 people, a dramatic fall from 388 people in 2010.
 
 
Other key findings from the report – entitled Wealth: Having it all and wanting more – include: 
 
  • The richest 1 per cent have seen their share of global wealth increase from 44 per cent in 2009 to 48 per cent in 2014 
  • At this rate the richest 1% will own more than 50 per cent of global wealth in 2016. 
  • Almost all of the remaining 52% of global wealth is owned by the richest 20%. 
  • This leaves just 5.5%  of the global wealth for the remaining 80% of people in the world
  • The wealth of the richest 80 people doubled in cash terms between 2009-14.
  • More than a third of the 1,645 billionaires listed by Forbes inherited some or all of their riches.
 
This explosion in inequality is holding back the fight against global poverty at a time when 1 in 9 people do not have enough to eat and more than a billion people still live on less than $1.25 (€1.07/82p)-a-day. 
 
Inequality is not inevitable – it is the result of policy choices. There are solutions, ones we will be highlighting at the Davos meeting, which Oxfam International Executive Director Winnie Byanyima will co-chair.
 
 
Above: A twice-weekly vegetable market in the town of Bara Gaon, India. Inequality is rising at a time when 1 in 9 people do not have enough to eat and more than a billion people still live on less than $1.25 (€1.07/82p)-a-day. Photo: Tom Pietrasik / Oxfam
 
We propose a seven-point plan to tackle inequality:
 
  • Clamp down on tax dodging by corporations and rich individuals 
  • Invest in universal, free public services such as health and education
  • Share the tax burden fairly, shifting taxation from labour and consumption towards capital and wealth
  • Introduce minimum wages and move towards a living wage for all workers
  • Introduce equal pay legislation and promote economic policies to give women a fair deal
  • Ensure adequate safety-nets for the poorest, including a minimum income guarantee
  • Agree a global goal to tackle inequality.
 
 
Above: Zambia is one of the world’s fastest-growing economies yet Barbara Chinyeu is living in poverty, like three-quarters of the population. While Barbara struggles to grow vegetables to support her family and walks four hours every day just to collect water, multinational mining companies make huge amounts of money in her country. These giant corporations use international tax rules to avoid paying their fair share, meaning that families like Barbara’s lose out. "We are better off if we are all at the same level... If we were all equal, we could all have control of our own affairs." Photo: Abbie Trayler-Smith / Oxfam
 
Imagine the impact this could have. Cleaning up the toxic global tax system, to take one example, would give governments all over the world the vital revenues they have been deprived to invest in public services like health and education that can both help to fight poverty and reduce inequality. 
 
For example, the EU could receive an annual boost of €120/£100 billion in public money if Europe clamped down on tax dodging. €120/£100 billion is almost twice the annual global aid budget and this much cash could save the lives of 350,000 children under the age of five every year.
 
2015 presents a historic opportunity for world leaders to set a roadmap to eradicate extreme poverty and improve prospects for all citizens with the clock ticking for major decisions on the new UN development goals later this year. 
 
If we get it right, this generation can solve one of the major global challenges of our time and help people escape the stranglehold which keeps them in poverty.

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