Oxfam New Report- Highlights

April 16, 2022

According to a new report by Oxfam, more than a quarter of a billion people in 2022 will be pushed into poverty. The report also said that the financial crisis across the world will be driven by the rise in prices due to the Russia-Ukraine crisis and also due to the COVID-19-related economic crisis.

Overview:

The Russia-Ukraine crisis along with COVID-19 is widening the gap across the world between the rich and the poor.
Since the beginning of the pandemic, around 3.3 billion people across the world are living below the poverty line, while every 26 hours a new person becomes a billionaire.
The estimates of the Oxfam report are based on the projections of the World Bank along with earlier research done by the World Bank and the Center for Global Development.
This report has been released ahead of the spring meetings of the International Monetary Fund and the World Bank.

Key Highlights of the Report

In 2022, COVID-19, a rise in food prices, and inequality could push 263 million more people into extreme poverty. This will result in a total of 860 million people across the world living below the USD 1.90-a-day mark. This will cause extraordinary damage reversing the decades of progress made in the fight against poverty. Due to the pandemic, people lost their jobs and savings, while food prices rose more than during the 2011 crisis. In comparison, the billionaires are minting money, as they are exploiting the inflationary environment to boost their profits at the expense of the consumers. The oil companies around the world are making huge profits as energy prices are rising.

Fortunes of the 10 richest people in the world

According to the report, the 10 richest people in the world doubled their income during the pandemic. Also, during the same period, 2,744 small billionaires witnessed an unprecedented rise in their fortunes in comparison to the last 14 years.

Uneven increase in poverty

This increase in poverty is spread unevenly across the world. In sub-Saharan African nations, 40 percent of consumer spending is on food costs while in the advanced economies, the figure is half. The developing nations are witnessing debt levels that were unseen so far. USD 43 billion is needed for debt servicing for the poorest countries in the world.

Plans Suggested

Economic rescue plans have been suggested. In poor countries, there should be cuts in value-added taxes on cash transfers and staple food to protect them from inflation. Also, for the countries that fall in the spectrum of low and lower-middle-income, the World Bank should cancel debt payments for the years 2022 and 2023. Also, taxation should be applied to the wealthy with the rates being 2 percent tax on personal wealth over USD 5 million, 3 percent for having wealth over USD 50 million, and 5 percent for having wealth above USD 1 billion should be imposed. This will garner USD 2.52 trillion and 2.3 billion can be saved people from poverty. Under the IMF, special drawing rights must be reallocated to ensure it is debt-free. Also, the lower-income countries’ emergency support must be increased.