“Public policies need to be implemented so as to reduce extreme wealth and the financial secrecy that allows tax evasion.”
Oxfam´s director for Latin America and the Caribbean
Oxfam warns that in spite of the advances made in the last decade, Latin America and the Caribbean remains the region of highest wealth inequality in the world. Its elites continue to accumulate extreme wealth and excessive power.
Oxfam´s briefing report Latin America and the Caribbean: kingdom of the elites, presented today at the World Economic Forum in Panama City, states that in spite of the documented decrease in inequality in the last 10 years, Latin America and the Caribbean is still the world´s most iniquitous region. Some of its countries have income disparities only comparable to nations in Sub-Saharan Africa and Southeast Asia.
The briefing states that while the richest people in Latin America receive almost 50% (on average) of the region´s total income, the poorest only receive 5%. In other words, while 164 million people live in poverty (66 million of them in extreme poverty), 113 Latin Americans are on the list of the world´s billionaires (65 Brazilians, 16 Mexicans, 12 Chileans, 8 Peruvians, 5 Argentineans, 4 Colombians and 3 Venezuelans).
The expected annual income for 2014 of those 113 people is equal to the public budget of El Salvador, Guatemala and Nicaragua put together. That same income is equal to the public health expenditure of 9 Latin-American countries. Mexican Carlos Slim – the richest person in the region, and the world´s second billionaire-, could pay the salaries of 440,000 Mexicans with his annual income alone.
Political and economic power in the hands of the few
These numbers are the expression and the result of a global phenomenon: the rich rule. Oxfam previously revealed that wealthy elites distribute political power among themselves to manipulate market rules, ultimately undermining democracy and creating a world in which the 85 richest people have the same wealth as 3.5 billion people -the poorest half of the planet.
“Latin America and the Caribbean have to face up to the social imbalance brought about by inequality. This disparity allows wealthy elites to have inappropriate levels of political influence that robs ordinary citzens of the revenue generated by natural resources, generates unfair fiscal policies, encourages corrupt practices, and defies the lawful authority of governments”, said Francoise Vanni, Oxfam´s director for Latin America and the Caribbean.
Extreme wealth and financial secrecy need to be addressed
“Citizens around the world, including people from Latin America, have expressed their concern over the growing accumulation of wealth in the hands of the few. Oxfam urgently calls upon the countries of Latin America and the Caribbean to implement public policies that reduce extreme wealth and the financial secrecy that allows tax evasion”, said Vanni during the presentation of the briefing note in Panama City.
The World Economic Forum has identified widening income inequality as the second most significant issue likely to exert pressure on the world in the next 12 to 18 months. In its report Outlook on the Global Agenda 2014, published in November 2013, the organization warned that inequality is affecting social stability and “threatening security on a global scale”.
Oxfam calls on the economic and political leaders assembled at the World Economic Forum on Latin America, to assume their responsibility in overcoming inequality, ending poverty, and to stop the excessive influence of the elites over political decisions. To achieve this, they must adopt measures which include banning the use of wealth to obtain political favours, support progressive fiscal policies over wealth and income, invest in universal health and education, and establish the global objective to end extreme inequality as part of the post-2015 development goals.
Wealthy elites have co-opted political power to rig the rules of the economic game, undermining democracy and creating a world where the 85 richest people own the wealth of half of the world’s population, worldwide development organization Oxfam warns in a report published today.
The World Bank and International Monetary Fund need to ditch the ‘trickle down’ economics of the past and lead the fight against inequality if they are serious about the new target to end extreme poverty by 2030.