Policy and Advocacy

Survival of the Richest: How billionaires are amassing eye-watering wealth amid crisis

Ten years ago, Oxfam first sounded the alarm at the World Economic Forum, about extreme levels of inequality. Since then, billionaires have almost doubled their wealth and astoundingly since 2020, the richest 1% have snatched-up almost twice as much as the rest of the world combined.

Hundreds of millions are facing impossible rises in the cost of living, and millions are reeling from the pandemic which has already killed over 20 million people. These crises all have winners. The very richest have become dramatically richer and corporate profits have hit record highs, driving an explosion of inequality.

The very existence of billionaires and record profits while poverty and inequality are both on the rise damning proof of a failing economic system. As a starting point toward reducing extreme inequality, the world should aim to dramatically reduce the wealth and number of billionaires between now and 2030, both by increasing taxes on the top 1% and adopting other billionaire-busting policies.

Food

To better understand the rise in energy and food prices, we need to look beyond the logic of supply and demand. Growing evidence points to corporate profits as a significant driver of inflation. Not only are companies passing increased input costs onto consumers, but they are also capitalizing on the crisis, using it as a smokescreen to charge even higher prices.

Oxfam’s analysis of 95 food and energy corporations found that they made $306 billion in windfall profits in 2022; 84% of this being paid to their shareholders, making the already rich, even richer. Governments could raise vital revenue to help fight inequality by implementing one-off taxes on excessive profits and wealth during crises.

Energy

The traditional explanation for soaring inflation is that it occurs when demand exceeds supply and pushes up prices, but this logic only partly explains the rising cost of energy and food. The invasion of Ukraine by Russia did lead to reduced gas supply which contributed to an increase in the global price of energy. In the case of food, prices were already rising sharply long before the war, and the interruption of grain supplies from Ukraine made this problem worse.

Food and energy corporations have maintained high prices without the threat of being undercut by competition, and as prices on their end fall, these savings are being passed to their shareholders rather than consumers. This greed-flation led to food and energy companies more than doubling their profits in 2022, paying out $257 billion to wealthy shareholders, while over 800 million people go to bed hungry every night.

Cost of Living Crisis

One constant of the last two-and-a-half decades has been the steady decline in extreme poverty. This progress has now ground to a halt as extreme wealth and extreme poverty have increased simultaneously for the first time in 25 years. 


There historically have been progressive measures to curb excessive wealth and power of the super-rich during global crisis by increasing taxation of the richest. We can learn from Costa Rica that increased its top rate of income tax by 10 percentage points, from 15% to 25%, and Bolivia and Argentina introduced wealth and solidarity taxes on their richest citizens. This spirit of solidarity boosts public spending and to fight inequality and limit suffering of ordinary citizens

Wages

When economic crisis hits, ordinary working people are first in line for pay cuts and job losses. In 2020, COVID-19 sparked lockdowns and an unprecedented global economic slowdown. This led to working-hour losses approximately four times greater than during the global financial crisis of 2008, with women and racialized groups being the hardest hit.

Oxfam analysis shows that at least 1.7 billion workers worldwide will have seen a real-terms pay cut in 2022, making it more challenging to feed their families or keep the lights and heating on. We urgently need greater taxation of the ultra-rich and corporations as a measure to fight inflation and inequality.

Tax

Oxfam is calling on governments to take immediate measures to increase taxation on the richest, including permanent increases to tax on their incomes and capital, one-off taxes to end crisis profiteering, and taxes on their wealth that are high enough to significantly reduce inequality. It’s time to fight inequality by taxing the rich.

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On Trial for Saving Lives: Drop the Charges Against Humanitarians

Seán Binder, Sara Mardini and Nassos Karakitsos will go on trial next Tuesday 10th January 2023 on the Greek island of Lesvos where they are charged with serious crimes including forgery, trafficking and espionage. They were on Lesvos to save lives but now face 25 years in prison. “If they are found guilty it could amount to criminalisation of search and rescue work,” said Mary Lawlor, UN Special Rapporteur on the situation of human rights defenders.

Seán grew up on the south coast of Ireland where he trained in search and rescue. Sara was a professional swimmer and is also trained in search and rescue. They each decided to use their skills and experience to join humanitarian efforts on Lesvos island where people fleeing to Europe were at risk of drowning. On Lesvos, they worked with Emergency Response Center International (ERCI), a registered NGO conducting rescue missions, giving people essentials like blankets and accompanying people in solidarity on their arrival in Europe. The organisation regularly cooperated with Greek authorities on missions in Greek waters and on Lesvos , making it all the more shocking when Sara and Seán were both arrested in August 2018 and accused of being part of a criminal organisation.

They were held in pre-trial detention for 106 days before being released on bail in December 2018. Four years later the trial is still hanging over them.

 

"All of these errors suggest that our right to a fair trial is being undermined. That’s why I'm here asking for respect of our rights and indeed respect for the rule of law ”- (Seán Binder December 2022)

 

Legal experts and human rights organisations all around Europe have sounded the alarm about this trial. Procedural flaws include: factual errors including claims that some of the accused participated in rescue missions on dates when they were not actually in Greece, indictments were not translated into a language the accused could understand, indictments were issued without clearly stating what offences individuals were charged with, and Sara Mardini was not allowed to enter Greece to be present at her own trial in 2021 although the right to be present at one’s own trial is protected in international ,European and Greek law.

After analysing the case, Human Rights watch called the accusations “baseless” and called on Greek judicial authorities to drop the charges.  

 

“Dragging the case on for year on year so that prosecution is effectively a form of persecution” - (Seán Binder, December 2022)

 

If one thinks back to August 2018, and all the things that have happened in the world since then it is shocking to imagine passing this length of time with the possibility of imprisonment hanging over one’s head. The first trial hearing was in November 2021, but it brought no closure or certainty as it was adjourned because the prosecution had filed the case before the wrong court, which held that it was not competent to try the case. The case was referred to the Appeals Court of the Northern Aegean, also on Lesvos and it is there that the trial begins on Tuesday 10th January 2023. But even then only one portion of the charges will be addressed. The charges have been broken into misdemeanour and felony charges and the latter, the more serious charges that carry a longer sentence, are not the ones for which they will be tried in January. It is unacceptable for these humanitarians to be left with such serious charges hanging over them and all charges should be dropped.

 

“A guilty verdict, which could put them in prison for 25 years, would set a dangerous precedent of making criminals of people who support the rights of migrants and refugees across Greece and the European Union. It would lead to more deaths at sea and could see others put behind bars for human rights work.” - (Mary Lawlor, UN Special Rapporteur on the situation of human rights defenders.)

 

Unfortunately, cases like this are not isolated, nor are they even uncommon nor restricted to Greece.

Oxfam and our partners the Greek Council for Refugees have raised concerns that the criminalisation of refugees and those who support them is part of a broader policy of deterrence. Last year a number of cases were acquitted in Greek courts showing the criminalisation to be unlawful but the consequences on the refugees’ personal and family life were horrendous.

Chios: acquittal of a young Syrian man accused of providing water and food to refugees

On 4 June 2022, a 23 year old Syrian man was arrested for providing water and food to 11 newly arrived asylum seekers who had landed on the coast of Chios. The young man was accused of “facilitating the illegal residence of third-country nationals in Greek territory and complicating the investigations by the Greek authorities”. On 16 June 2022, the Criminal Court of Chios acquitted the man.

Samos: acquittal of father over son’s death on boat journey to Greece

In November 2020, a boat carrying 24 people began to sink as it approached the Greek island of Samos. The Greek coast guard were called but did not arrive until the next morning. Tragically, a six year old child drowned. His father, a 26 year old who had fled Afghanistan, was then charged with endangering his child’s life and faced 10 years in prison. On 18 May 2022, the Criminal Court of Samos acquitted the father.

Seán has said that as bad as it was to have been in pre-trial detention for over 100 days “it isn’t as bad as some of the experiences that others have had who are in prison and are not unfortunately listened to”. Humanitarians doing rescue work are criminalised, people arriving on boats are criminalised, lawyers assisting asylum seekers are criminalised. The UN special rapporteur on the situation of human rights defenders, Mary Lawlor, carried out an official country visit to Greece in June 2022 and reported that human rights defenders face criminalisation, smear campaigns and live in fear because of “their legitimate, peaceful work for the rights of refugees, asylum seekers and migrants.”

At stake in this case is the freedom and life chances of people who came to Greece to help and never dreamed that for this act they could face prison. At stake in this case is the rule of law within the EU, the right to cross a border looking for refuge (The EU Charter of Fundamental Rights is legally binding on all EU member states and Article 18 guarantees the right to ask for asylum), the future of search and rescue and humanitarianism in Europe. 

Join us to show solidarity with the humanitarians – Monday 9th at 6.30pm.

Together we will hear from activists and advocates on the ground in Greece, compile messages of solidarity and participate in a photo mosaic of solidarity demanding the charges be dropped. 

Join us on zoom here

This short but very important event is being organised by Oxfam Ireland and Comhlámh. Come show your support and send a message of solidarity to humanitarians: Join us on zoom: https://us06web.zoom.us/j/89494316916

#DropTheCharges

#FreeHumanitarians

You can send a message of support to Seán here: 

https://www.frontlinedefenders.org/en/profile/sean-binder

You can read more here:

 

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Reflections on Global Health Inequalities

 

The Irish Global Health Network hosted a global health conference online and in Trinity College Dublin on the 26th and 27th of October. The first conference session opened with stark

 statistics on global health inequity from Oxfam CEO Jim Clarken:

  • In low Income countries there are less than 4.5 healthcare workers per 1000 population, in Ireland there are 16 per 1000. 

  • 81% of people have received at least one COVID-19 vaccine dose compared to 19% in low-income countries.

Dr. Pieternella Pieterse of DCU followed by providing a striking example of global health inequality: approximately 50% of healthcare workers in Sierra Leone are unsalaried. This is in part because a huge proportion of Sierra Leone’s national income goes on repaying debt to the IMF and other bodies. This highlights the need to heed Oxfam Ireland’s call for debt cancellation for countries like Sierra Leone.

At the conference Irish Times journalist Sally Hayden described the horrific conditions for people on the move in Libya brought about by EU migration policies: ‘‘In one detention centre, one person was dying every two weeks of starvation or tuberculosis”. She discussed this in the context of her new book My Fourth Time, We Drowned which explores the shocking experience of people seeking refugee and how this suffering is in ways facilitated by the EU, the UNHCR, the IOM and numerous NGOs. Overall, she called on us as citizens of the EU to demand more of our leaders in this area.

Robbie Lawlor of Access to Medicines Ireland also led a rallying call for us all to be more radical in order to address the climate crisis. Climate change and health was a common thread through-out the conference. Dr. Julian Eaton highlighted the huge climate anxiety experienced by young people and how we need to address this by taking radical steps to address climate change, not by pathologising the issue. Professor Karyn Morrisey launched the Lancet Countdown on health and climate change. Climate change has increased the frequency of heat waves leading to an additional 98 million people experiencing food insecurity in 2020. We were told about how governments and companies continue to prioritise fossil fuel interests to the detriment of people's health and wellbeing. However, Karyn discussed how there is some hope; decarbonisation is occurring but governments must be held accountable to ensure they meet the Paris commitments, at a minimum.

The other crisis that featured prominently though-out the conference was the COVID-19 pandemic. James Larkin, Oxfam Ireland’s Health and Vaccine Inequity Coordinator presented about our forthcoming report analysing the Irish government’s response to global COVID-19 vaccine inequity. This primarily focussed on the failures of the EU and Ireland in terms of waiving intellectual property rights for COVID-19 vaccines, medicines and diagnostics. Dr. Mike Ryan summed up the issue as follows: “If we don’t waive intellectual property rights during a once in a generation pandemic that’s killing millions of people, then when will we?”

Through-out the conference the efforts of coalitions and advocates to address these issues shone through, these included the People’s Vaccine Alliance, Access to Medicines Ireland, Women in Global Health, Comhlámh, Irish Doctors for the Environment and the Irish Global Health Network.

 

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Minister Donohoe Must Prioritise Poorest and Most Vulnerable at IMF and World Bank Meetings This Week

Austerity won’t help poor countries recover, especially if crippled by debt – Oxfam

87 per cent of International Monetary Fund’s (IMF) Covid-19 loans require developing countries to adopt tough austerity measures. This is despite the fact that a deadly combination of Covid-19, conflict and climate, further exacerbated by the war in Ukraine, is pushing millions more people into poverty, hunger and destitution.

Ahead of his attendance at the Annual Meetings of the IMF and World Bank Group this week, Oxfam Ireland is urging Minister for Finance Paschal Donohoe to prioritise protecting the world’s poorest and vulnerable.

Michael McCarthy Flynn, Head of Policy and Advocacy at Oxfam Ireland, said: “This will be one of Minister Donohoe’s last meetings as Finance Minister on the global stage and it’s crucial that he does not miss this opportunity to champion the needs of those most impacted by the economic fallout of Covid-19 and the global cost of living crisis, fuelled by the war in Ukraine.

“In the toughest of times, austerity measures are the worst possible solution. Instead of supporting recovery, they actually see a scaling down of essential social protection services for women, children, the elderly and those most vulnerable. For the world’s poorest, they’re not just disastrous – they’re deadly.

“Ireland and the EU have recognised that austerity policies are counterproductive, but yet they support their imposition on poorer countries. This undermines our support to poorer countries, including through our overseas development assistance programme.”

According to research from civil society organisations working to #EndAusterity, 85% of the world’s population will live in the grip of austerity measures by 2023. This trend is likely to continue until at least 2025, when 75 per cent of the global population (129 countries) could still be living under these conditions. 

Austerity doesn’t just dismantle social protection programmes - common measures include public spending cuts, the introduction of or increase in regressive consumption taxes such as VAT; cutting or capping the wages and number of teachers, health and local civil servants and eliminating subsidies; privatising or commercialising public services such as energy, water and public transport; and reducing pensions and workers’ rights.

Ultimately, austerity measures are implemented to reduce fiscal deficits in order for the country to keep paying back and servicing debt. In January this year, the World Bank estimated that 33 countries were already “in” or at “high” risk of debt distress.

McCarthy Flynn continued: “Poorer countries will not be able to recover from the economic fallout of the pandemic and the current global cost of living and food crisis if they are crippled by debt. At the Annual Meetings, Ireland must call for initiatives to cancel all debt payments in 2022 and 2023, including to multilateral institutions such as the IMF and the World Bank for all low and lower-middle-income countries that require it.

“Cancelling debt payments is the fastest and most effective way to keep money in countries that desperately need it and free up resources to tackle poverty, hunger, inequality and the devastating impact of the climate crisis.

“Ireland could also set an example on the world stage and show leadership by reallocating 100% of its $4.69 billion allocation of IMF Special Drawing Rights (SDRs) to countries most in need.”

Oxfam research shows that G20 countries’ commitment to reallocate $100 billion of their SDRs issued to help countries deal with the Covid-19 pandemic has only resulted in pledges of $36 billion to poorer countries to date.  

At the Annual Meetings of the IMF and World Bank Group, Oxfam Ireland is urging Ireland to call for the IMF to:

  • Help countries restructure their debts and support the cancellation of all low- and middle-income countries’ debt payments owed during the pandemic, and, where necessary, after the pandemic as well.
  • Work with donors to maximise aid flows and ensure budget commitments on overseas development aid and humanitarian appeals are upheld.
  • Encourage and support countries to make increases in social spending a permanent measure and establish the basis for securing quality, universal free public services and universal social protection.
  • Do all it can to maximize re-allocation of the IMF Special Drawing Rights (SDRs) issued in 2021 from high- to lower-income countries, in ways which minimise debt and conditionality. The IMF should issue a further $650bn SDRs, reallocated to target low- and middle-income countries to enhance their ability to spend progressively.
  • Ireland should re-allocate 100% of its $4.69 billion allocation of IMF SDRs to countries most in need. It has yet to re-allocate any.

ENDS

CONTACT:

Alice Dawson Lyons | alice.dawsonlyons@oxfam.org | +353 (0) 83 198 1869
Clare Cronin | clare.cronin@oxfam.org | +353 (0) 87 195 2551

NOTES TO THE EDITOR

  • Oxfam spokespeople are available for comment and interview
  • Oxfam is part of the #EndAusterity coalition. To read their report, End Austerity: A global report on budget cuts and harmful social reforms, click here.
  • On Special Drawing Rights (SDRs):
    • SDRs are an easily accessible form of finance or cash for countries struggling to respond to multiple global shocks.
    • $650 billion-worth of Special Drawing Rights (SDR) were issued by the IMF in August 2021, as an easily accessible form of finance or cash for countries struggling with the global crisis. However, these were distributed according to quotas rather than needs, in line with IMF rules. This means that $400 billion went to high-income countries, $230 billion to middle-income countries, and just $21 billion to low-income countries, despite the tremendous needs of low-income countries.
    • Ireland has received $4.69 billion in Special Drawing Rights (SDRs) and Oxfam is calling on the Government to set an example by reallocating 100% of its allocation of IMF Special Drawing Rights (SDRs) to countries most in need. This could be done bilaterally, through conversion into hard currency, to low and middle-income countries in Africa and Asia which are most food insecure, or else multilaterally through a vehicle which strictly avoids conditionality and is concessional. Although barriers have been advanced to the reallocation of SDRs, such as to the ‘lending’ of them by the European Central Bank, we believe that what is most absent is the political will to effectively reallocate these much-needed emergency funds. This is where Ireland can provide global leadership.
    • Data on countries at risk of debt distress and can be found here- https://www.worldbank.org/en/news/press-release/2022/02/15/greater-transparency-on-hidden-and-distressed-debt-can-reduce-global-financial-risks-and-support-recovery

Addressing Inequality and Cost of Living at Home and Abroad Must Be the Focus of Budget 2023

It seems strange to say, in these worrying times, that the subject of tax can be inspiring.

But it can - and should be - as Billy Bragg’s 1986 album Talking with the Taxman About Poetry showed - a reference that may be lost on many of the younger Oxfam activists.

In the closing discussion of the Irish Commission on Taxation and Welfare’s public meeting earlier this year, Professor Niamh Moloney (the Commission’s chairperson) and Gavin Kelly (chair of the UK’s Resolution Foundation) referenced the setting up of the Beveridge Commission in Britain, that seminal moment when a welfare state and national health service which became the envy of the world was created.

‘The thing about the Beveridge report,’ they said (I’m paraphrasing here) ‘is that they didn’t ask what it cost. They just realised this was what needed to be done – and they found a way to pay for it.’

A more refreshing, inspirational moment in policy-making is hard to imagine – ‘this is what we need to do, now let’s use our collective powers to do it’. - poetry, as Billy Bragg said.

Budget 2023 presents use with an opportunity to create a similar seminal moment.

Oxfam has led the world in calling for urgent measures to tackle the crisis of inequality. At the start of this year, before Russia invaded Ukraine, we showed that billionaire wealth globally had grown to the greatest levels since records began, that it accelerated alarmingly during the COVID-19 pandemic, and that it has approached levels not seen since the Gilded Age – much more Edith Wharton than Billy Bragg.

Extreme wealth in Ireland has increased in a similar fashion –Irish billionaires have seen their wealth increase by over 50% since the start of the pandemic. Surely, we’re not going back a century?

 

Wealth Tax

As a result, Oxfam Ireland called for a national conversation about a wealth tax in Ireland and we proposed a moderate tax schedule: 1.5% above net-wealth thresholds of €5 million and 2% above net-wealth thresholds of €50 million, in current prices. Oxfam Ireland proposes, as a nation, we should consider the model of wealth tax put forward in our submission to the Commission on Taxation and Welfare here.

Our view is that now is the right time to introduce these taxes in Ireland to build new, greener and more effective social contracts to face a global hunger crisis, spiralling levels of inequality, the cost-of-living crisis and an environmental emergency.  

This tax would be complementary to other capital taxes and could yield at least €5 billion per year at low rates - 1.5% and 2% - above net-wealth thresholds of €5 million and €50 million respectively.

As an example of what our wealth tax could fund every year, €5 billion would cover the entirety of the contributions proposed by Social Justice Ireland in Budget 2023 for Housing (€1,442.3m), Health, Disability and Carers (€1,436m), Pensions and Older People (€1,025.7m) and Children and Families, incl. Direct Provision (€749.7m) along with our proposed €233 million contribution to Official Development Aid (ODA) for Budget 2023 on a path to reach the target of 0.7% GNI over the course of the next seven years, while leaving a further EUR113 million that could be allocated to (additional) international climate finance.

Technically and politically, there has never been a better time to introduce wealth taxes, through leveraging modern information technology - and we would not be going it alone but as part of a growing international movement throughout Europe and America.

Windfall Tax

In addition to a wealth tax, Oxfam Ireland proposes a windfall tax on the excess profits of large companies in sectors of the economy that are benefiting from fortunate circumstances resulting from the pandemic and rising prices. We are witnessing record profits across multiple sectors, not just in the energy sector- shipping and logistics, arms producers, pharmaceuticals, IT and food producers and many others are benefitting from the multiple crises that we find ourselves in. These companies have also benefited from public policy measures such as quantitative easing during the COVID-pandemic that helped maintain and bolster profits. The IMF has recommended a broad-based windfall tax to help build social solidarity.

The recent remarks of the UN Secretary General highlighted that the largest global oil and gas companies made close to $100bn in combined profits in the first three months of 2022. In August Bord Gáis’s operating profits increased by 74% in the first half of this year to nearly €40 million over the same period in 2021. While our analysis from May of five of the best-known Irish energy companies showed they had a combined rise of 50% rise in profits or €280 million in total even before the Russian invasion of Ukraine.

But it is not just the energy sector that is making excess profits. Corporations and the billionaire dynasties who control so much of our food system are seeing their profits soar. Billionaires involved in the food and agribusiness sector globally have seen their collective wealth increase by $382bn (45%) over the past two years. There have been 62 food billionaires created in the last two years. In Ireland, five of the biggest Irish food companies have had a total profit rise of €174 million in just one year - in the last year of recorded profits. Similar levels of excess profits are being made in other sectors. As a result Spain has recently imposed a windfall tax on banks as well as utilities.

We propose that the windfall tax would be levied on excess profits well above average company profits for the year’s 2017-2020, the accounting years before the pandemic began.  Regulators should be tasked with imposing fines or other relevant measures to prevent windfall taxes being passed on to consumers, as is the case with the Spanish and Italian model of windfall taxes.

We call for a more effective and comprehensive form of windfall tax than that under consideration by the Irish Government, according to Minister for Finance, Paschal Donohue, speaking in the Dáil in April. Minister Donohue said that a 10% tax on the taxable profits of all energy companies in Ireland could yield in the region of €60 million per annum. However, this estimate was based on taxable profit levels in 2020 - which are likely to be much lower than current levels.

Global Asset Registry

Oxfam Ireland fully endorses the Independent Commission for the Reform of International Corporate Taxation (ICRIT)’s public campaign in 2022 for a Global Asset Registry (GAR). A Global Asset Registry (GAR) has been endorsed by ICRIT’s commissioners in an open letter to G20 finance ministers and has been described as:

 “an international network of asset registries that listed all different forms of wealth: from assets including property, yachts, jets and jewellery; to bank accounts, cryptocurrency assets and safe deposit boxes; as well as trusts and other legal arrangements; and even intangible assets such as intellectual property and trademarks.”

This would give an opportunity for Irish-based corporations, Irish high net-wealth individuals and the Irish state to definitively and publicly disassociate themselves from and repudiate the wealth of oligarchs and illicit financial flows.  Budget 2023 needs to include a commitment to support the formation of the Global Asset Registry (GAR) as part of its oversight of this area.

  • Introduce a Wealth Tax and a Windfall Tax to fund measures to help address inequality and poverty in Ireland and globally.

  • Support the creation of a Global Asset Registry, a publicly accessible registry of wealth holdings around the world.

For more details of how Budget 2023 can contribute to addressing inequality, ending poverty and creating a more sustainable world please see our pre-budget submission

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