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The top 4 questions you asked about the new Oxfam inequality report

Our new report about the state of inequality in the world reveals how our economy is delivering unimaginable rewards for those at the top, while tens of millions of people are still in poverty.

As soon as we published it, we started to receive lots of great comments and questions. Here are some of the most interesting questions we’ve been asked, and our answers to them.

  1. “Poverty is going down globally. People are living longer, healthier lives. Why should we care if a few people are also getting really rich?”

It’s absolutely true – and absolutely brilliant – that extreme poverty has declined very significantly over the past 25 years. In fact, the number of people living in extreme poverty – which is defined as anyone living on less than $1.90 a day – has more than halved. However, that doesn’t mean we can now put our feet up, or even carry on along the same path that we’ve been going down.

Over this same time period, inequality has been increasing within most countries, and is now at dangerously high levels. There’s a great deal of evidence to show that extreme inequality leads to very negative social, political and economic impacts and stands in the way of the fight against poverty globally. The majority of extreme poverty is now in middle-income countries.

The rise of extreme economic inequality is also a serious blow to the fight against gender inequality. Women feel the impact of inequality, and are more likely to live in poverty than men.

  1. “Oxfam is a charity – why are you talking about politics?”

Ending poverty is Oxfam’s reason for being – but we know that we can’t achieve our goal unless we work with others to tackle the structural issues that push people into poverty and keep them trapped there. This means addressing really big challenges such as economic inequality, gender discrimination and climate change. And these problems are all fundamentally about power.

To understand their causes and to find solutions, we have to look at who has been making the big decisions, whose interests they have been acting in and whose voices have been excluded. In particular, women’s voices and the perspective of women need to be heard, and acted on. We also have to look at who has the responsibility and the ability to put things right – and very often that means challenging governments to make better decisions.

  1. “Oxfam keeps criticizing big companies. Are you anti-business?”

We’ve been asked this a few times over the years, but it simply isn’t true. Much of Oxfam’s work involves actively supporting and developing enterprises in communities around the world. We have productive partnerships with many companies, large and small.

What we are against is the kind of business model that maximizes profits by paying poverty wages, endangering workers, trashing the planet, or aggressively dodging tax. We are happy to be seen as anti those kinds of business.

We want to see companies showing that there is a different way of doing business – that profit is not the only thing that matters to them. We want to see governments regulating against bad business practices, and actively supporting more positive ones.

  1. “Oxfam talks as though the economic pie cannot grow, and so it’s just a question of sharing that pie out more equally. But that’s obviously not true. If the economy grows, there will be more for everyone. And billionaires are the real wealth creators, driving that economic growth, so why shouldn’t they be rewarded for that?”

Of course, economic growth can bring benefits with it – but at the moment, we see that those benefits are mostly going to those at the top. 82% of the wealth created in the world last year went to the top 1%. We need both governments and businesses to take action to ensure growth benefits everyone – and particularly those at the bottom, of which women make up the largest percentage. Across the world, women consistently earn less than men and are usually in the lowest paid and least secure forms of work.

While inclusive economic growth is going to play a really important role in ending poverty in many countries, we also know that we have to tackle inequality at the same time, or we’ll destroy the planet that we all depend upon. With current levels of inequality, our global economy would need to grow 175 times bigger before everyone was able to earn $5 a day. That’s obviously completely unsustainable. We have to find a different and better route to shared prosperity.

We are asking people to help spread the word and to join the movement to fight inequality and beat poverty.

Watch how kids make things fair

How Kids Make Things Fair - 2 Min

EU must ensure tax haven blacklist is not a whitewash

The EU should resist political pressure and ensure its upcoming blacklist of tax havens objectively reflects the criteria it has itself set if it is serious about fighting tax avoidance, Oxfam said today.

The international organisation said that an honest appraisal of the role that different states play in facilitating tax dodging is crucial if European countries are to effectively tackle a problem that deprives them and poor countries of vital funds that could be used to fight poverty.

Oxfam’s new report, Blacklist or Whitewash?, names the 35 countries that should feature according to the EU’s definition of a tax haven, including six that are linked to the UK: the British Virgin Islands, Cayman Islands, Bermuda, Jersey, Gibraltar and Anguilla.

The EU has excluded member states from its blacklist. Oxfam is also urging the EU to act to reform the tax systems of countries like Ireland, Luxembourg, the Netherlands and Malta, which it found met the criteria for being tax havens.

The EU is expected to publish its blacklist next Tuesday after analysing 92 countries and jurisdictions against criteria including financial secrecy and facilitating profit shifting – but political pressure from inside and outside the EU means some of the world’s most notorious tax havens, such as Switzerland, may be left out.

Jim Clarken, Oxfam Ireland’s Chief Executive, said: “If the EU is serious about preventing tax havens from engaging in harmful practices that affect us all then it should stand up to political and corporate pressure and create a genuine blacklist, not a whitewash.”

Last year more than 300 top economists, including Nobel Prize winner Angus Deaton, warned there is no economic justification for tax havens and urged world leaders to take on the powerful vested interests that benefit from the status quo.

Oxfam is calling on the UK government to take responsibility for its own offshore backyard by requiring Britain’s overseas territories and crown dependencies to publish registers revealing the real owner of companies registered there. None has yet complied with the UK government’s request to do this, first made by David Cameron in 2013. Private registers are not an adequate substitute as they would not be open to full scrutiny, especially by authorities in poor countries.

Oxfam’s report highlights how multinationals are able to use the UK’s overseas territories to shift profits through interest payments on artificial loans between their subsidiaries. Income from interest represented 73 percent of GDP in the Cayman Islands and 40 percent of GDP in Bermuda.

Clarken added: "People are fed up with double standards that mean some companies and wealthy individuals can funnel money through tax havens to avoid paying their fair share of tax, while ordinary people in the UK and overseas are struggling to get by. With growing cross party consensus on this, the Government should not delay further action to end tax secrecy in UK-linked tax havens and to require UK-based multinationals to publish their tax payments in every country they operate."

The EU’s tax haven blacklist is being drafted in secret, which makes scrutiny impossible. Malta has publicly lobbied for an empty list and the Swiss government has announced it does not expect Switzerland to be included.

Oxfam believes the EU’s blacklist criteria are a step in the right direction but should be extended to address other harmful tax practices such as the race to the bottom on corporate tax rates.

To learn more about Oxfam Ireland’s tax justice campaign go to https://www.oxfamireland.org/tax

ENDS

For more information or interviews please contact: Phillip Graham, Oxfam Ireland on phillip.graham@oxfamireland.org / 07841 102535.

NOTES TO EDITORS

The report, Blacklist or Whitewash?, is published online.

Oxfam applied the EU’s own criteria to the 92 countries screened by the EU, and the 28 EU member states. According to Oxfam’s analysis, at least 35 non-EU countries should be included in the EU tax haven blacklist: Albania, Anguilla, Antigua and Barbuda, Aruba, Bahamas, Bahrain, Bermuda, Bosnia and Herzegovina, British Virgin Islands, Cook Islands, Cayman Islands, Curaçao, Faroe Islands, Former Yugoslav Republic of Macedonia, Gibraltar, Greenland, Guam, Hong Kong, Jersey, Marshall Islands, Mauritius, Montenegro, Nauru, New Caledonia, Niue, Oman, Palau, Serbia, Singapore, Switzerland, Taiwan, Trinidad and Tobago, United Arab Emirates, US Virgin Islands, Vanuatu. And four EU member states: Ireland, Luxembourg, the Netherlands and Malta.

Oxfam’s new briefing paper Ending the Tax Scandals sets out five policy measures the UK Government needs to take in order to tackle tax avoidance.

Bermuda topped Oxfam’s list of the world’s 15 worst corporate tax havens, published last year, which also named three other UK-linked territories – the Cayman Islands, Jersey and the British Virgin Islands.

A recent YouGov poll found that almost three quarters of the public think the government should be doing more to tackle corporate tax dodging. There is cross party support for doing more to tackle tax avoidance, including greater transparency for companies and in UK-linked tax havens.

In May 2016, top economists wrote to world leaders to say that tax havens have no economic justification.

EU blacklisting criteria puts Ireland’s tax haven status beyond doubt

·         More royalties sent out of Ireland than rest of EU combined, equivalent to 26% of GDP in 2015

·         New Oxfam report urges EU to tackle tax avoidance within member states

Tuesday, 28th November 2017

A new report published by Oxfam today has identified Ireland as one of four EU countries which would be blacklisted1 as a tax haven if the EU were to apply its own criteria to member states.

The EU is currently drafting a blacklist for tax havens, analysing 92 non–EU countries and jurisdictions against a set of three criteria, which include tax transparency and policies that facilitate large-scale profit shifting. However, this process excludes EU member states, meaning that they will not be assessed.

For the first time, Oxfam has applied the EU’s own criteria to 92 countries worldwide as well as to the 28 EU member states. According to the analysis, at least 35 non-EU countries should be included in the EU tax haven blacklist.

Furthermore, four EU member states: Ireland, Luxembourg, the Netherlands and Malta also met the criteria for being listed as a tax haven.

Ireland fails to meet the second criterion on fair taxation and the facilitation of tax avoidance. For example, the report establishes that royalties sent out of Ireland were equivalent to 26% of the country’s gross domestic product in 2015. That is more royalties than are sent out of the rest of the EU combined, and makes Ireland the world’s number one royalties provider2.

Jim Clarken, Oxfam Ireland Chief Executive, said: “As Ireland fails the EU’s blacklisting criteria, it is clear that the Government has questions to answer with regard to its stated commitment to tackling tax avoidance. In the past, the case has been made that because Ireland’s tax arrangements fulfilled OECD standards there was no substantiation that Ireland matched the conditions associated with tax haven status. The OECD’s blacklisting process has been called into question due to the fact that it only listed one country Trinidad and Tobago as a tax haven.

“The analysis in this report uses the very measurements the EU is currently applying to 92 non-EU states to assess whether they should be blacklisted as tax havens. Sadly, this analysis places Ireland in an elite club with four other EU countries; Malta, Luxembourg and the Netherlands.”

The report, Blacklist or Whitewash: What a real EU blacklist of tax havens should look like, shows how financial flows are often completely out of proportion with the tax havens’ real economic activity. In the British Virgin Islands, foreign direct investment amounts to 90,000% of the country’s GDP. For the Cayman Islands, it represents 5,400% of the GDP, for Malta 650% and for Luxembourg approximately 400%.

Oxfam is concerned that, regardless of these clear findings, EU governments will come up with a weak or even empty blacklist. The blacklist is being drafted in secret, which makes public scrutiny impossible. The Maltese EU presidency has publicly advocated for an empty blacklist. Also, following a meeting with EU finance ministers, the Swiss government has openly declared it does not expect the country to be blacklisted.

Oxfam is also urging the EU to put rules in place to reform the tax systems of EU countries like Ireland, Luxembourg, the Netherlands and Malta which meet the EU’s criteria for being listed as a tax haven.

Mr Clarken continued: “An ambitious and objective list of tax havens with strong countermeasures is a concrete and powerful way to clamp down on tax avoidance which deprives countries of hundreds of billions of dollars, fueling poverty and inequality. If the EU is serious about preventing tax havens from engaging in harmful practices that affect us all then it should stand up to political and corporate pressure and create a genuine blacklist, not a whitewash.”

ENDS

CONTACT: For more information or interviews, please contact Alice Dawson, Oxfam Ireland, on +353 (0) 83 198 1869 or at alice.dawson@oxfamireland.org

1.     Blacklist: Establish a “blacklist” of countries that refuse to adhere to international taxation rules. Listed countries should face stiff penalties.

Oxfam applied the EU’s own criteria to the 92 countries screened by the EU, and the 28 EU member states. According to Oxfam’s analysis, at least 35 non-EU countries should be included in the EU tax haven blacklist: Albania, Anguilla, Antigua and Barbuda, Aruba, Bahamas, Bahrain, Bermuda, Bosnia and Herzegovina, British Virgin Islands, Cook Islands, Cayman Islands, Curaçao, Faroe Islands, Former Yugoslav Republic of Macedonia, Gibraltar, Greenland, Guam, Hong Kong, Jersey, Marshall Islands, Mauritius, Montenegro, Nauru, New Caledonia, Niue, Oman, Palau, Serbia, Singapore, Switzerland, Taiwan, Trinidad and Tobago, United Arab Emirates, US Virgin Islands, Vanuatu. And four EU member states, Ireland, Luxembourg, the Netherlands and Malta

2.     Passive income such as royalties for Intellectual Property (IP), which companies are known to use to avoid tax. High levels of these payments far above normal economic activity indicates that the jurisdiction is facilitating tax avoidance.

Notes to editors:

·          Read the full Oxfam report: https://oxfam.box.com/v/EUBlacklistReport

·          An interactive map shows the 39 countries listed in the report and explains why they fail to meet the EU’s blacklisting criteria: https://public.tableau.com/profile/oxfam.eu.office#!/vizhome/ShadowEUtaxhavenblacklist_0/ShadowEUtaxhavenblacklist-map

·          The EU committed to a blacklist process in the wake of scandals like the Panama Papers and Lux Leaks that showed how tax havens let the super-rich get away with billions in unpaid taxes. EU finance ministers are expected to publish the EU blacklist on 5 December at their meeting in Brussels.

·          The EU’s listing process uses three sets of criteria to identify tax havens: transparency, fair taxation, and participation in international fora on tax.

·          The EU’s blacklisting negotiations have taken place behind closed doors and countries participating in the talks have refused to answer questions. The process has been in the hands of one of Brussels’ most secretive working bodies, the so-called Code of Conduct Group, which insists on its work being confidential.

·          Last June the OECD released its own backlist, but the result was farcical and ended up naming only one country, Trinidad and Tobago.

·          Tax dodging costs developing countries $170 billion a year: $70 billion through tax dodging by super-rich individuals and $100 billion through corporate tax dodging. $100 billion is enough money to provide an education for 124 million children and prevent the deaths of almost eight million mothers, babies and children a year.

·          Switzerland, which fails the EU’s criteria on fair taxation according to Oxfam’s analysis, has already declared they expect not to appear on the EU blacklist. This illustrates the risk that major tax havens might escape blacklisting due to political and economic pressure.

·          Following the Paradise Papers, Oxfam released a 5-point plan outlining steps governments should take to prevent further scandals on a global scale. This includes establishing a global blacklist of tax havens that naming countries such as Ireland and the Netherlands that have been key players in the Paradise Papers scandal. 

World Humanitarian Day: Meet Michelle and Samson

This World Humanitarian Day, meet two inspirational aid workers, supporting people in need through our programmes in Nigeria.
 

Meet Michelle

Michelle Farrington is Oxfam’s specialist in public health during emergencies and is currently working in Rann in North-eastern Nigeria. Last year there was a cholera outbreak in Rann and so Michelle and the team are there helping to make sure that doesn’t happen again. 

Michelle writes: “For the last five months, I have been planning for a possible cholera outbreak in Rann, in North-eastern Nigeria.

Rann is particularly vulnerable to outbreaks: previously a town of approximately 35,000 people, it has now swollen to a population of over 70,000 because of people forced to flee their homes. Rann is already flooded which means people will be cut off from the rest of Nigeria with no access by road when the rainy season is in full swing. This means that NGOs like Oxfam will be unable to bring any supplies – of food, medicine, water treatment chemicals, construction materials for latrines and shelter – into Rann for at least four months.

Preparing for a cholera outbreak involves thinking through worst case scenarios and making a plan to ensure the items we would in case of an outbreak are present - safe water, sanitation and information for people affected. I have been working with colleagues to get supplies to Rann so that the items we need to respond are already in place before the town becomes inaccessible to trucks. We have built over 300 latrines (toilets) for people living in temporary settlements and we are starting to treat water at each water point as a precautionary measure.

It’s not only in Rann that we have been doing these kind of activities; preparing for cholera outbreaks has been happening in all of the places where Oxfam works in North-eastern Nigeria.

We have trained community volunteers in the signs and symptoms of cholera, and taught them how to work with their neighbours and communities to take preventative steps against spreading the disease. The same volunteers will help Oxfam mobilise communities in case an outbreak does happen, and will provide a vital source of communication between Oxfam and communities so we can adapt our response rapidly. 

It has been difficult, especially in Rann. Due to security concerns, Oxfam teams can only access Rann via helicopter three times a week, but everyone has been working hard to ensure we are prepared should a cholera outbreak occur. 

Michelle's vlog from Nigeria

Meet Samson

Like Michelle, Samson is a fellow humanitarian aid worker in Nigeria. Samson works in the government-run Farm Centre camp in Maiduguri, Borno State, Nigeria. It is a camp established by displaced people themselves when they moved into empty unfinished buildings the government was building for government workers. There are also people living in makeshift shelters, especially those who have arrived more recently. Oxfam is providing water, latrines and sanitation in the camp. 

Samson's passion for humanity

What is Oxfam doing in Nigeria?

With the help of people like Michelle and Samson, Oxfam has been working in north eastern Nigeria since 2015, and over the last year we have expanded our response so that now we are working in eight different locations across Borno and Adamawa states. Some of the areas that we work in – Madagali and Rann – suffered from cholera outbreaks last year, whereas others are already facing outbreaks of other water and sanitation diseases.

Oxfam is also responding to the hunger crisis in north-east Nigeria where over 4 million people are in desperate need of food. So far, Oxfam has helped about 300,000 people affected by the crisis by providing emergency food and cash as well as clean water, sanitation and building showers and toilets. 

Fatem and Khalil: One Syrian family’s journey to Europe

The majority of Syrian refugees who have reached Europe have had to take dangerous, sometimes fatal, journeys across land and sea. But this is a different story, one which shows that there are other ways of providing sanctuary to those fleeing the horrors of war.

Fatem recalls the fear she felt when war broke out in her hometown of Raqqa. “We were living in the heart of the conflict,” she says. “Every time we kissed each other goodnight we thought it could be the last time.” Her husband Khalil couldn’t work after the fighting started. Money became so tight that Fatem, who was expecting their first child, couldn’t even see a doctor. But the final straw came after the birth of their baby boy, Ahmed, and the couple realised that there was no milk in the shops to feed him. ”That was the moment when we clearly realised we couldn’t stay in Syria any more,” says Khalil. He decided to go to Lebanon to find a job and a home – his young family would then follow him. The most precious thing he took with him was a photo album showing happy memories – their wedding, their parents and their beautiful house. 

Fatem, and her husband Khalil and their two children arrive in Rome. Photo: Pablo Tosco / Oxfam

Khalil had to sleep on the streets on his first night in Lebanon. It was a sign – nothing in this country would be easy. For four years the family struggled to make ends meet in their adopted home, a small country with the highest number of refugees per capita in the world, and a place where 70 percent of Syrian refugees live below the poverty line. For Khalil, finding work as an electrician, plumber and painter was difficult, so he still had to borrow money to feed his family, which had grown with the birth of baby Mohamed. Their home was a small, dark room in a town in Mount Lebanon, an hour from Beirut. It was cold and the children often got sick.

One day, Khalil learned from a neighbour that there was a way of travelling to Italy, safely and legally, with a humanitarian visa. After much research, the family met with the Italian organisations working on the “Humanitarian Corridors” programme, an initiative which aims to prevent both dangerous journeys across the Mediterranean and human trafficking. At first, Fatem was sceptical –she never thought they would be selected. But after a couple of interviews they got the good news.

Khalil and Fatem couldn’t sleep the night before their flight to Italy. They’d been counting down the days for months, their suitcases waiting in a corner of their tiny home. Torn by their situation, they shed tears of joy and sadness. They were leaving behind those with whom they had spent the past four years – their cousin’s family, who had welcomed them into their home during their first month in Lebanon, and their neighbours, most of whom were Syrian, and who’d also fled their homeland. Above all, they were moving further away from Syria.

The journey took 24 hours, starting in Beirut and ending in the Tuscan town of Cecina. When they arrived, two social workers from Oxfam brought them to their new temporary home – a flat with a garden. The family learned that they would get money for six months to buy food, medicine and other essentials. They would have WiFi in the apartment and get Italian language lessons. And they would receive help in applying for asylum and looking for work. At the end of the six months, the family would be considered self-sufficient.

“I never imagined we would end up living in Italy. I thought the war would only last for two or three years, but the situation just gets worse,” says Khalil, as he tunes into an Arabic television channel to get the latest news from Syria. “I hope people in Europe don’t think we are terrorists or extremists. We are here because we are running away from them, from the conflict.”

Fatem adds: “We want a future for our children. That is why we are willing to learn a new language and adapt to different customs.” When asked if they would like to go back to Syria when the war ends – if they would like this story to end where it began – Fatem replies: “Of course we will go back. But if a long time passes and my children feel established here, we will only go back to visit. The stability of our family comes first.”

A Story of Hope

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