Abdul Bari Masoud for MuslimMirror.com
New Delhi: India is hitting the global headlines for many reasons, but one of them is for being one of the most unequal countries in the world with a very high and sharply rising concentration of income and wealth as India’s richest 1 percent now holds a huge 58 percent of the country’s total wealth. While just eight men own the same wealth as the poorest half of the world.
This was revealed in a study done by the rights group Oxfam today to mark the annual meeting of political and business leaders in Davos.
According to the Oxfam report titled ‘An economy for the 99 percent’, in India, the richest 1 percent of Indians has 58 per cent of total Indian wealth. Fifty-seven billionaires have the same amount of wealth as the bottom 70 percent of India. The CEO of India’s top information firm earns 416 times the salary of a typical employee in his company.
The 50-page Report stated there are 84 billionaires in India, with a collective wealth of USD 248 billion, led by Mukesh Ambani (USD 19.3 billion), Dilip Shanghvi (USD 16.7 billion) and Azim Premji (USD 15 billion). The total Indian wealth in the country stood at USD 3.1 trillion.
It says new estimates show that eight men own the same wealth as the 3.6 billion people who make up the poorest half of humanity. As growth benefits the richest, the rest of society – especially the poorest – suffers.
The study also shows that the gap between rich and poor is far greater than had been feared. It details how big business and the super-rich are fuelling the inequality crisis by dodging taxes, driving down wages and using their power to influence politics. It calls for a fundamental change in the way we manage our economies so that they work for all people and not just a fortunate few.
New and better data on the distribution of global wealth – particularly in India and China – indicates that the poorest half of the world has less wealth than had been previously thought. Had this new data been available last year, it would have shown that nine billionaires owned the same wealth as the poorest half of the planet, and not 62, as Oxfam calculated at the time.
The total global wealth in the year was USD 255.7 trillion, of which about USD 6.5 trillion was held by billionaires, led by Bill Gates (USD 75 billion), Amancio Ortega (USD 67 billion) and Warren Buffett (USD 60.8 billion).
The report outlines how the super-rich uses a network of tax havens to avoid paying their fair share of tax and an army of wealth managers to secure returns on their investments that would not be available to ordinary savers. Contrary to popular belief, many of the super-rich are not ‘self-made’. Oxfam analysis shows that half the world’s billionaires have inherited their wealth or accumulated it through the use of crony connections with government.
Nisha Agrawal, CEO of Oxfam India said India is one of the unequal countries in the world with a very high and sharply rising concentration of income and wealth.
The study also said that the CEO of India’s top information firm earns 416 times the salary of a typical employee in his company. It also demonstrates how big business and the super-rich use their money and connections to ensure government policy works for them.
Agrawal added “The Indian tax structure looks reasonably progressive on paper, but in practice, much of the progressive tax is not collected. The Budget for 2017-18 provides a major opportunity to reverse that and to put in place policies that will raise more taxes in a more progressive way and to spend those on basic education and basic healthcare to create an equal opportunity country.”
Winnie Byanyima, Executive Director of Oxfam International, said:
“It is obscene for so much wealth to be held in the hands of so few when 1 in 10 people survive on less than $2 a day. Inequality is trapping hundreds of millions in poverty; it is fracturing our societies and undermining democracy.”
Oxfam’s report shows how our broken economies are funneling wealth to rich elite at the expense of the poorest in society, the majority of whom are women. The richest are accumulating wealth at such an astonishing rate that the world could see its first trillionaire in just 25 years. To put this figure in perspective – you would need to spend $1 million every day for 2738 years to spend $1 trillion.
Public anger with inequality is already creating political shockwaves across the globe. Inequality has been cited as a significant factor in the election of Donald Trump in the US, the election of President Duterte in the Philippines, and Brexit in the UK.
Seven out of 10 people live in a country that has seen a rise in inequality in the last 30 years. Between 1988 and 2011 the incomes of the poorest 10 percent increased by an average of just $65 per year, while the incomes of the richest 1 percent grew by an average of $11,800 a year – 182 times as much.
‘An Economy for the 99 percent’ also reveals how big business and the super-rich are fuelling the inequality crisis. It shows how big corporations are dodging taxes, driving down wages for their workers and the prices paid to producers, and investing less in their business in order to maximize returns to their wealthy shareholders.
Byanyima said: “The millions of people who have been left behind by our broken economies need solutions, not scapegoats. That is why Oxfam is setting out a new common sense approach to managing our economies so that they work for the majority and not just the fortunate few.”
“Governments are not helpless in the face of technological change and market forces. If politicians stop obsessing with GDP and focus on delivering for all their citizens and not just a wealthy few, a better future is possible for everyone.”
It is four years since the World Economic Forum identified rising economic inequality as a major threat to social stability, 1 and three years since the World Bank twinned its goal for ending poverty with the need for shared prosperity.2 Since then, and despite world leaders signing up to a global goal to reduce inequality, the gap between the rich and the rest has widened. This cannot continue.
As President Obama told the UN General Assembly in his departing speech in September 2016: ‘A world where 1% of humanity controls as much wealth as the bottom 99% will never be stable.’
Oxfam said it is time to build a human economy that benefits everyone, not just the privileged few. It said that since 2015, the richest 1 percent has owned more wealth than the rest of the planet.