Inequality

  • The widening gap between the world’s richest and poorest people is tearing societies apart. Too many still toil in extreme poverty. In contrast, wealth is increasingly concentrated in the hands of a few, who can use it to capture disproportionate power to shape the future. The widening gap between the richest and poorest is damaging economies and pushing more people into poverty. There are practical ways to close the gap.

Poorest people get less than one cent per day to protect themselves from impacts of climate crisis

Leaders must heed climate strikes and give vulnerable people the tools to survive.

Cyclone survivors walk through floods
Survivors of Cyclone Idai in Mozambique face water and electricity shortages while at risk of waterbourne diseases carried in contaminated flood water. Photo: Sergio Zimba/Oxfam

People living in the poorest countries receive less than one cent per day – to protect themselves from the devastating impacts of the climate crisis, Oxfam estimates in a new report. People are facing mounting human and financial costs from climate-related disasters they did least to create.

Climate adaptation pledges from wealthier nations are overstated and notoriously opaque.

Winnie Byanyima, Oxfam’s Executive Director, said: 'Wealthy governments are failing to live up to their promise to help poor nations adapt to the climate crisis. The poorest and most indebted nations on earth have done the least to cause this crisis but are being left to foot the bill. To avoid a downward spiral of ever more frequent humanitarian crises we need more funds for adaptation in the hands of the poorest communities. This should be genuine assistance – not loans that need to be paid back.'

In the last year, the drought in the Horn of Africa has left more than 15 million people needing humanitarian aid. Repeated cyclones have left 2.6 million people in need of assistance. Substantial levels of climate finance provided on an annual basis would allow countries to reduce the impact of climate shocks by, for example, diversifying crops, conserving water or investing in better weather monitoring systems.

High levels of debt in countries like Somalia and Mozambique further exacerbate the impacts of climate shocks by squeezing the resources available for them to become more resilient to future climate shocks and to develop in a low-carbon way. Somalia’s debt stands at 75 per cent of its GDP and any climate finance provided in the form of loans risks pushing them deeper into debt. Oxfam estimates that around two-thirds of climate finance is provided in the form of loans that need to be repaid.

Oxfam is calling on wealthier nations to make ambitious emissions reductions and ensure more climate finance is directed towards adaptation in the least developed countries. This should include meeting their 2020 climate finance commitment and doubling their pledges to the Green Climate Fund compared with the previous round.

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Oxfam report: The power of education to fight inequality

school in santa cruz nicaragua
School in Santa Cruz, Nicaragua. Photo: William Vest-Lillesø

Inequality is reaching new extremes. Significant increases in inequality of both income and wealth are leading to larger gaps between rich and poor, men and women.

This is creating serious obstacles to overcoming poverty and exclusion, and stopping us from beating poverty. With women substantially over-represented in the ranks of the poorest, this is also reinforcing gender inequality, blocking progress on women’s rights. These inequalities threaten to pull our societies apart, and unravel the social contract between state and citizen, by undermining social cohesion and eroding democratic institutions.

But inequality is not inevitable. It is a political choice. It is the result of deliberate policy choices made by governments and international organizations. Conversely, it is now broadly agreed by most global policy makers that extreme inequality is also avoidable, and that concrete steps can be taken to reduce inequality.

Good-quality education can be liberating for individuals, and it can act as a leveller and equalizer within society. This report will show the unparalleled power of education to level the playing field, to help close the growing divides, and bring us closer together.

Find the report and the summary at Oxfam.org

Bangladesh: Transformative tailoring for Rohingya women

Elderly lady smiles
Credit: Caroline Leal/Oxfam

Gender dynamics in the largest refugee settlement in the world

“You have come to this country as a guest,” Shompa, 60 years old, says to Caroline Leal from Oxfam as she sits in Shompa’s shelter in Camp 22 in the Unchiprang camp in the Cox’s Bazar district of Bangladesh. “Well, so have I. And, just like you, I want to return home.”

It’s been two years since over 700,000 Rohingya, a stateless Muslim minority in Myanmar, fled their home to Bangladesh. Their exodus to seek safety began on August 25, 2017 after violence broke out in Myanmar’s Rakhine State.

Bangladesh is now the host of the largest refugee settlement in the world. More than half the Rohingya refugees are women, and 60 percent of the female population are under 18 years of age.

Although Shompa is safe from the violence she was subjected to in Myanmar, she and thousands of Rohingya women still continue to face huge challenges in the refugee settlements. Gender dynamics, trauma endured in Myanmar and pre-existing cultural and social norms are proving to be major factors for women to overcome.

“When fleeing our home, it was too dangerous to grab any belongings. We had no choice but to escape to Bangladesh with only the clothes on our back,” Shompa said.

This is particularly problematic for Rohingya women in the camp as the community’s traditional practice of purdah, which is the screening of women from men or strangers, is still observed. The lack of proper clothing has greatly affected the ability of Rohingya refugee women to move freely around the camps.

Back in Rakhine, women did not need a burqa to access latrines and water points, as these were close to their homes and they lived with their relatives. But the reality in Camp 22 is different.

“When I needed to go outdoors, I had to see if there were any men around,” Shompa said. “Because of this [lack of proper clothing], I often couldn’t go outside.”

Working directly with Rohingya women and members of the host community in the district of Cox’s Bazar, Oxfam decided to help address this challenge. Through Oxfam’s protection and sustainable livelihoods program, a project was designed which involves the distribution of nine different fabrics along with tailoring vouchers. These vouchers can be used at local shops in the host community, and mean that Rohingya women are able to have garments that are culturally appropriate.

A common thread

Refugee man tailors clothes
Credit: Caroline Leal/Oxfam

A short drive away from Camp 22, the small town of Chakmaara is filled with shops and tuk-tuks. On the second floor of the plaza, Noor Mohammed, a local tailor, fills out orders inside his brightly painted shop. Fabric, buttons and thread fill every corner.

“On my own, I couldn’t complete all of the orders! I had six tailors working but had to hire five more,” Mohammed said.

Mohammed is one of the local vendors participating in Oxfam’s tailoring voucher program.

The impact of the Rohingya refugee camps on a host community that is already one of the poorest in Bangladesh is undeniable.

“Since the construction of the camps, the cost of daily life and goods has risen significantly,” says Mohammed. “One kilogram of potatoes usually cost six Taka (approximately $0.10 CAD). Today, it’s around 22 Taka.”

Cost increases are also affecting businesses. Before the influx, business owners like Mohammed averaged a monthly profit of 5000 Taka (approximately $77 CAD). That average has been cut by more than half, hovering around 2000 Taka.

Since the launch of the tailoring voucher program, Mohammed’s business has prospered. In the past three months alone, he and his team have made 1,400 garments.

“Thanks to this program, my business has greatly flourished,” he says.

Hand shows clothing
Credit: Caroline Leal/Oxfam

A humanitarian response working for women

A couple of shelters down from Shompa’s, Ayesha, 18, lives after fleeing the violence of Myanmar with her husband, their young son, and her parents. Her husband lives 50 kilometres away in the Balukhali camp, working at the mosque.

Life is difficult for a single woman in the camp. Ayesha collects firewood and heavy buckets of water from a nearby water point twice daily. She has participated in Oxfam’s tailoring voucher program

“For me, it’s a matter of safety,” she says. “I feel heard.”

Ayesha isn’t alone in her sentiment. According to a recent survey done on the Rohingya response by Oxfam, 95 percent of women feel safer and more comfortable going outside their home thanks to the tailoring voucher program.

Designing programs for women, with women, is putting power back in their hands in times of crisis. Listening to what Shompa and Ayesha want is the way to ensure humanitarian responses work for women.

Oxfam bag with tailored clothes
Credit: Caroline Leal/Oxfam

Ring the alarm

Oxfam’s tailoring program is helping women like Shompa and Ayesha, but it won’t fix the problems that forced them to flee to Bangladesh in the first place.

The ongoing violence and persecution against Rohingya people in their home country, Myanmar, must be stopped. Two years after the crisis made international headlines, Rohingya people in Myanmar still don’t have basic rights - including freedom of movement, access to citizenship, healthcare and education.   Ultimately the Rohingya people need an end to their persecution. They need durable solutions. They need a future, now.

This is why, alongside the humanitarian assistance Oxfam is providing on the ground, Oxfam is calling on Myanmar authorities to end the violence and ensure that Rohingya people in Myanmar can enjoy their rights.

Because, ultimately, what is it that Shompa wants?

“Justice,” she declares. “All I want is to go back home with recognition and justice.”

West Africa: Extreme inequality in numbers

Disheveled boy carries plates
Northern Ghana has poverty levels two to three times higher than the national average. The region is covered by dry savannah land and lacks key infrastructure such as roads and markets. Credit: Adam Patterson/Oxfam

West Africa has had an impressive economic growth in the past two decades. In 2018, the region was home to six of the top 10 fastest growing economies in Africa: Cote d’Ivoire, Senegal, Ghana, Burkina Faso, Benin and Niger.

However, for the majority of countries, the benefits of this unprecedented economic growth went to a tiny few. Today, inequality has reached extreme levels in the region. The rich have grown richer while the poor have become even poorer. The region has also the least public health care coverage and the least populations with access to water and decent education.

Let’s look at the numbers

1% Compared to other regions on the continent, West Africa has the greatest number of countries with more than 30 percent of the population living on less than $1.90 (€1.72/£1.48) a day. The top one percent West Africans own more than everyone else combined in the region.

$1.25 Five of Nigeria’s richest men have a combined wealth of US$29.9 billion (€27.1 billion/£23.2 billion) – more than the country’s entire national budget for 2017. However, about 60 percent of its citizens live on less than US$1.25 (€1.13/£0.97) a day, the threshold for absolute poverty.

1 M In Ghana, West Africa’s second biggest economy, one of the richest men earns more in a month than one of the poorest women could earn in 1,000 years. In the decade ending in 2016, the country added 1,000 US dollar millionaires while nearly one million more people were added to the poverty pool.

Girl smiles in mothers arms
West Africa has high rates of child marriage. Niger, Mali and Nigeria are home to the highest number of children married before 18 years in Africa. Credit: Laeïla Adjovi/Oxfam

$9.6 BN West Africa countries lose an estimated $9.6 billion (€8.7 billion/£7.5 billion) each year through corporate tax incentives offered to multinational companies. This would be enough to build about 100 modern and well-equipped hospitals each year in the region.

70% Inequality is also rife in the provision of public services such as education. Women from rich families in Mali are 15 times more likely to have received a secondary education than women from poor families. An estimated 70 percent of the poorest girls in Niger have never attended primary school.

3.5% In Nigeria, women constitute between 60 percent and 79 percent of the rural labour force but they are 10 times less likely to own their own land than men. They represent only 3.5 percent of the population owning farmland in the country. This level of inequality has negative impacts on women, including making them more vulnerable to gender-based violence.

How committed are West African governments to reducing inequality?

While a small but growing group becomes fantastically rich, a clear majority of West Africa’s citizens are denied the most essential elements of a dignified life like access to quality education, healthcare and decent jobs. Yet the West African governments are much less committed to reducing inequality than all other regions of the African continent.

The Oxfam’s Commitment to Reducing Inequality Index (CRII) regional report, which ranks countries according to their commitment to tackle inequality, reveals that the West African’s governments are exacerbating inequality by underfunding public services, such as healthcare and education, while under-taxing corporations and the wealthy.

Without radically increasing their commitment to reduce inequality, this crisis is likely to worsen. It’s time for West African governments to act decisively. Unless they significantly close the gap between the richest and the rest, ending extreme poverty will remain a dream.

5 steps governments can take to prevent another Mauritius Leaks scandal

A 5-point plan to stop big corporations cheating poor countries out of billions of dollars in tax revenue, was published by Oxfam today in the wake of the Mauritius Leaks.

When multinational corporations and the super-rich use tax havens to dodge paying their fair share, it is ordinary people, and especially the poorest, who pay the price. The Mauritius Leaks show that tax havens continue not only to exist but to prosper, despite government promises to rein in tax dodging. Oxfam’s plan lists five steps governments can take to tackle tax avoidance and end the era of tax havens.

Jim Clarken, Oxfam Ireland’s Chief Executive, said: “Politicians could put a stop to tax scandals if they wanted to. Oxfam has listed five concrete solutions that would prevent another Mauritius Leaks scandal and ensure multinational corporations pay their fair share of tax wherever they do business. Developing countries can revise or void their tax treaties and introduce withholding taxes to better protect their tax revenue, and all governments – rich and poor – agree to set a global minimum effective tax rate on corporate profits.

“There is no time to waste. Developing countries lose an estimated $100 billion a year in tax revenue as a result of tax dodging by multinational corporations, and even more as a result of damaging tax competition between countries. This money is desperately needed to end hunger, tackle the climate crisis, and ensure all children have the chance of an education.”

Oxfam’s 5-point plan to build a fairer global tax system calls on governments to:

(1) Agree new global tax rules in the negotiations led by the OECD under the mandate of the G20 to ensure fair taxation of big corporations. This should include the introduction of a global minimum effective tax rate set at an ambitious level and applied at a country-by-country basis without exception. This would put a stop to the damaging tax competition between countries and remove the incentive for profit shifting – effectively putting tax havens out of business.

(2) Developing countries should not give away their taxing rights. Many treaties result in multinational companies not paying certain types of tax at all in any country. Rich countries have a responsibility in ensuring fair taxation with their investments and the projects they finance. Governments of developing countries can protect their tax base from erosion by revising or voiding their tax treaties, introducing withholding taxes and implementing strong tax anti-abuse rules.

(3) End corporate tax secrecy by ensuring all multinational companies publish financial reports for every country where they operate. The current OECD initiative on country-by-country reporting falls well short of the mark as it does not cover all multinational corporations and it does not require companies to make their financial reports publicly available. This means poor countries are unable to access the information to identify tax cheats. Stronger European proposals on public country-by-country reporting were due to be agreed this year but are being blocked by EU member states such as Ireland, Germany, and Luxembourg.

(4) Agree a global blacklist of tax havens based on comprehensive objective criteria and take strong countermeasures including sanctions to limit their use. Governments have yet to agree an objective global list of tax havens. A farcical OECD-G20 blacklist published in July 2017 features only Trinidad and Tobago. The more comprehensive European Union list omits European tax havens such as Ireland and the Netherlands.

(5) Strengthen global tax governance by creating a global tax body where all countries can work together on an equal footing to ensure the tax system works for everyone. The new round of global tax negotiations (BEPS 2.0) is a historic opportunity to put a stop to damaging tax competition and corporate tax avoidance, and to build a fairer tax system that works for the benefit of all people and not just a fortunate few. Even if the new round of global tax negotiations (BEPS 2.0) delivers positive results, a more inclusive tax body is required to oversee the global governance of international tax matters and strengthen international tax cooperation

ENDS

Oxfam experts are available for interview. Please contact:

Phillip Graham: phillip.graham@oxfam.org / +44 (0) 7841 102535

Alice Dawson-Lyons: alice.dawsonlyons@oxfam.org / +353 (0) 83 198 1869

NOTES TO EDITORS:

Download Oxfam's 5-point plan here.

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