The real cause of growing global inequality

At a global level, the top 1% (60 million people), and particularly the even more select few in the top 0.01% (600,000 individuals – there are around 1,200 billionaires in the world), the last 30 years has been an incredible feeding frenzy.

Inequality has grown dramatically in many countries. In the US the share of national income going to the top 1% has doubled since 1980 from 10 to 20%. For the top 0.01% it has quadrupled to levels never seen before.

This goes way beyond America. In the UK inequality is rapidly returning to levels not seen since the time of Charles Dickens. In China the top 10% now take home nearly 60% of the income. Chinese inequality levels are now similar to those in South Africa, which are now the most unequal country on earth. Even in many of the poorest countries, inequality has rapidly grown.

Globally, the incomes of the top 1% have increased 60% in 20 years. The growth in income for the 0.01% has been even greater. Following the financial crisis, the process has accelerated, with the top 1% further increasing their share of income.

The luxury goods market has registered double digit growth every year since the crisis hit. Whether it is a sports car or a super-yacht, caviar or champagne, there has never been a bigger demand for the most expensive luxuries.

These are some of the statistics collected together in “The cost of inequality: how wealth and income extremes hurt us all”. This is Oxfam’s contribution to an avalanche of analyses and opinions tumbling out in the days leading up to the gathering of the super-rich and their hangers-on in Davos this week.

Mostly they are aimed at trying to steer the discussion and debate amongst the rich and powerful leaders of the global corporations who make up the membership of World Economic Forum.      

But in its oh-so-gentle warning “Occupy protests demonstrated the increasing public

anger and feeling that inequality has gone too far”, Oxfam isn’t telling the WEF something it doesn’t know already. “Severe Income Disparity” is, after all, one of the top ten global risks featured in the report the WEF commissioned for itself.

There may well be quite a number of well-meaning, even enlightened multi-billionaires in attendance, in between visits to the ski slopes. After all, Bill Gates and Warren Buffet are way up there on the list of the world’s richest and having seen the writing on the wall they’ve committed to giving away truly huge amounts of money. Buffet is even calling for greater taxes on the rich.

Oxfam argues that extreme wealth and inequality is economically inefficient, politically corrosive, socially divisive, environmentally destructive, unethical and not inevitable. The charity lists a range of measures to reduce the gap that have worked in the past, and could work in the future.

But what they don’t do is to look behind the shocking statistics to explain why the disparity between rich and poor has grown so far and so fast in the last 30 years. If they did, they’d be looking at a profit-driven social, economic and political system which for its survival ensures that the ownership of the world’s resources is concentrated in fewer and fewer hands

In the good times, at least, the value of those resources expands by putting more and more people to work and paying them a declining share of what they produce until they are no longer able to afford the things they produce. And then, in the consequential bad times (like now), the same system is driven to destroy the surplus capacity that is the result of all that accumulation.

So yesterday, the International Labour Organisation reported that the number of unemployed globally is expected to pass the 200 million mark this year. The WEF has nothing to offer humanity and the anger that Oxfam refers to needs to be channelled into making the Davos gathering history.

Gerry Gold

Economics editor

A billion hungry people victim of land grabs

The World Bank is one now of the world’s leading land grabbers, channeling aid and loans into projects which force people off land they have used for generations. One of the results is a dramatic rise in food prices and global hunger.

Since 2008, when the World Bank put a modest monitoring and a complaints procedure in place, communities saying investments have violated their land rights have brought 21 formal complaints. Internal monitoring found that people were forced off their land in 30% of the projects the World Bank funds – that’s around one million people in total.

The World Bank’s investments in agriculture have tripled in the last decade from $2.5bn in 2002 to $6–8bn in 2012. But this investment is not aimed at easing hunger or poverty.

Rather it is simply bankrolling governments to get involved in the global market in land. Private investors and governments dedicated to carving out a toehold for their own elite in the world capitalist market are the beneficiaries.

A case in point is Cambodia, where mass removals of people from their land have brought protests, and ruthless government repression, including assassinations of campaigners and journalists.

This week 71-year-old broadcaster Mam Sonando was jailed for 20 years because his Beehive Radio supported land rights. The trumped-up charge was one of “inciting rebellion”. Security forces stormed a village in May after local people resisted the sale of a land to a corporation.

“Not a shred of evidence has been submitted in court that proves any connection between Mam Sonando and these bogus charges,” said Ou Virak, president of the Cambodian Centre for Human Rights, calling the verdict “embarrassingly unsophisticated and brazen.”

Reluctantly, the World Bank has frozen loans to Cambodia, after the government refused to say how it would meet the needs of displaced people (not that people shouldn’t, in principle, be displaced you understand – the World Bank accepts that kind of “collateral damage” if some gesture is made at resettlement).

So now the Cambodian government says it will halt land deals for the time being – but as 63% of all available land in Cambodia has already been passed on to private companies, there can’t be much left to deal.

A report published by Oxfam into investment in agricultural land by foreign interests found that between 2000 and 2010, 60% was invested in developing countries with serious hunger problems. Two-thirds of those investors plan to export everything they produce.

“In the past decade an area of land eight times the size of the UK has been sold off globally as land sales rapidly accelerate. This land could feed a billion people, equivalent to the number of people who go to bed hungry each night. In poor countries, foreign investors have been buying an area of land the size of London every six days,” the report says.

Oxfam estimates that 60% of land deals in the past decade are either being used to produce bio-fuels or left idle as investors wait for the price to rise. This land could have fed one billion people. To complete the vicious circle, those countries where the land grab has been most extensive, are also those suffering the biggest food price hikes.

Sub-Saharan Africa has had the highest increase in maize prices – for example 113% in Mozambique, and 47% in Malawi. These reflect poor local harvests, rises in world prices, combined with general inflation. The wheat price rose 27% in South Africa, 15% in Sudan, and 14% in India. These are higher price increases than in the major producer countries where drought has reduced this year’s crop.

And just to underline the market-driven nature of the food crisis, there have been big increases in the price of rice, in spite of this year’s plentiful harvest. The internationalisation of rice exports raises prices in local, more traditionally rice-dependent and producer countries. In India and Pakistan for example, rice prices are 30% higher than a year ago.

Land grabbing, aided by the World Bank, is about making profit while large parts of humanity go hungry. Capitalism is truly an obscene system.

Penny Cole

Environment editor

Roma made scapegoats for the crisis

As unemployment rises and austerity measures bite, the scapegoating of minorities is growing across Europe. High up in the firing line are, as always, members of Europe’s 12 million-strong gypsy and Roma communities.

Small surprise then that a new report commissioned by Oxfam outlines the scale of discrimination levelled against the Roma community in Glasgow.

Having left their native countries in eastern Europe where they face rising levels of violence, sometimes aided and abetted by local politicians, Roma and gypsies from eastern Slovakia, the Czech Republic and Romania have settled legally in Scotland, many of them in Glasgow’s Southside.

But Scotland’s Roma have discovered their reception is sometimes worse than the conditions they left behind. A whistleblower at the Laurieston Jobcentre Plus (JCP),  who has chosen to remain anonymous, was shocked at the levels of prejudice that prevailed.

Staff routinely referred to Roma people as “gypos, scum, beggars, suicide bombers and paedos”, she told the report’s author. They were blatantly discriminated against and not provided with benefits to which they were legally entitled.

Using evidence provided by more than 60 families about the treatment by the job centre staff, the authors say that HM Revenue and Customs (HMRC) often treated claims by Roma as fraudulent. Sometimes it held on to passports and birth certificates for several years. The authors found that more than half of all Roma-related benefits decisions were subject to unreasonable delays. The result was that some one in five claimants faced homelessness.

The Govanhill report’s findings bears out the harsh truth about the treatment of Roma throughout western Europe which are detailed in a major new survey carried out by the European Union and the United Nations. The researchers found that:

• only 15% of young Roma adults surveyed had completed upper-secondary general or vocational education, compared with more than 70% of the majority population living nearby
• on average, less than 30% of Roma surveyed were in paid employment
• about 45% of the Roma surveyed lived in households lacking at least one of the following: an indoor kitchen, toilet, shower or bath, or electricity on average
• about 40% of Roma surveyed lived in households where somebody went to bed hungry at least once in the last month because they could not afford to buy food.

And their situation is worse than that of their neighbours regarding jobs, education, housing and health. All in all, "the results present a grim picture of the situation of the Roma surveyed," the report said.

Disadvantages for Roma were apparent across all 11 countries included in the surveys, which polled more than 22,000 households. "That is precisely what we find most shocking. We would have expected to find significant differences, but from the responses of the Roma people themselves and their neighbours, we see few differences,” Ioannis Dimitrakopoulos of the EU Agency on Fundamental Rights said.

Earlier this month, Roma were forced out of a Belgrade settlement by masked attackers who shouted: "Serbia for Serbs! Roma out of Serbia!". Blatant persecution against travelling people has seen the French government defy European law by forcibly deporting Roma back to Bulgaria and Romania.

In Italy, leaders of the Northern League have encouraged attacks while city authorities bulldozed a gypsy camp outside Rome. Meanwhile, in Essex, Basildon council is defying the EU’s commissioner for Human Rights with a new round of evictions.

History is full of ugly examples of how in times of economic crisis, high unemployment and political bankruptcy, racism is the name of the game. We urgently need to develop alternative economic and political solutions to dislodge the 1% who exploit society as a whole and target those at the bottom of the scale seeking safe havens from racism and discrimination.

Corinna Lotz

A World to Win secretary

Climate talks ignore the evidence

As Durban suffered unseasonable heavy rain and flooding that killed six people in the South African city playing host to the current round of UN Climate Talks, European representative Artur Runge-Metzger asked delegates:

“How high needs the water to get in this conference centre before negotiators start deciding on things?"

The answer is, it doesn't matter how high, or how horrific the impacts of extreme weather on populations across the world because there can’t be a new treaty on climate change within the present profit-driven system.

Right across the world there is evidence of more extreme and unseasonal weather, outside the natural variability of the climate. Glaciers crucial for water supplies are melting.

In Afghanistan, Oxfam says serious drought helped send prices of wheat and wheat flour in July 2011 up to 79% higher in affected areas over their levels a year before. In south-east Asia, heavy monsoon rainfall and multiple typhoons have killed more than 1,100 people and helped increase rice prices by about 25% and 30% in Thailand and Vietnam. Floods have devastated Pakistan’s Sindh province for a second year.

The United States has suffered hurricanes, droughts, out-of-the ordinary snowstorms and even freezing rains in California. Food prices are soaring as a result. Canada, which has become of the main opponents of a binding agreement to reduce carbon emissions, saw freak gales roaring through Alberta, ironically the province where they are determined to go ahead with extracting tar sands.

Closer to home, southern England is facing a water shortage in December, whilst floods are spreading across Scotland.

But none of these events has any impact in the conference centre, and there is no limit to the ability of governments to ignore reality and continue down the same disastrous road.

Before the talks opened, it was said that rich nations had already decided to push any substantive talks on a binding agreement to reduce emissions of greenhouse gases to 2015 - now it seems unlikely they will accept even that timetable. The truth is, there isn’t going to a successor treaty to Kyoto which will end next year and be quietly forgotten.

Another major element of the talks was to be the launch of the “Green Climate Fund”, which requires developed countries to provide $100 billion to poorer countries by 2020 to help them reduce their own carbon emissions and adapt to climate change.

Now the United States has held up the deal, saying they won't sign anything unless developing nations - wealthy ones, like China, India and Brazil - contribute too.

Countries who would have benefited were also deeply unhappy that the proposed framework for the fund would have allowed corporations to apply directly for money, bypassing governments.

They were prepared to let it go through unchanged, however, because no more funding for mitigating the effects of climate change would have been forthcoming. But outside the conference, a group of leading NGOs wrote an open letter strongly objecting "to any resources going from the Green Climate Fund directly to the private sector, particularly through the establishment of a private sector facility."

They warn that projects that help poor people to adapt to climate change, or tackle their energy problems, are not going to generate corporate profit. Letting corporations and “green investment funds” get their hands on the money would mean it poured into the existing discredited and scandal-ridden carbon markets, or into the new “risky financial instruments” that "green economy" speculators are designing. So in effect, the fund would become yet another means of transferring public money and assets into the hands of the private sector and the speculators.

The message is that the climate crisis, which is a direct result of the operation of capitalist forms of commodity production, cannot be solved within the system that caused it. Our answer to this shameful failure on the part of our governments must be to replace them with a truly democratic power that can then make a binding agreement to reduce carbon emissions.

Penny Cole

Environment editor

'The world is still being cooked'

A survey of top climate scientists published by Oxfam to try and influence the leaders of the G8 economic powers, says that 2 degrees of global warming, now considered economically acceptable and inevitable by the governments of the rich countries, would wreck the lives of 660 million people.

Poor people living in low-lying coastal areas, island atolls and river deltas, and farmers, are most at risk of flooding and prolonged drought. The scientists, all contributors to the International Panel on Climate Change (IPCC), named South Asia and Africa as the areas that will be most subject to the effects of climate change.

Professor Diana Liverman, a member of the National Academy of Sciences Committee advising the US government, said: ”If we do not make deep cuts in emissions now the changing climate will bring heat stress, sea level rise and more extreme drought and floods. Scientific observations tell us that the world is already warming and it appears that many of the most vulnerable people are starting to experience the impacts of climate change.” Oxfam’s report sets out some changes happening now:

HUNGER: Interviews with farmers in 15 countries reveal how once distinct seasons are shifting and rains are disappearing. Farmers from Bangladesh to Uganda and Nicaragua are facing failed harvest after failed harvest.

AGRICULTURE: Rice and maize, crops on which hundreds of millions depend, particularly in Asia, the Americas and Africa, are already suffering significant drops in yields. Maize yields will drop by 15 per cent or more by 2020.

HEALTH: Diseases such as malaria and dengue fever are appearing in areas where populations lack immunity or the healthcare infrastructure to cope with them. It is estimated that climate change has contributed to an average of 150,000 more deaths from disease per year since the 1970s, with over half of those in Asia.

WORK: Rising temperatures will make it impossible for people to work at the same rate on hot summer days without ruining their health. This will affect day and hourly-paid workers most and reduce productivity.

WATER: Major cities dependent on glacier run off, including Kathmandu and La Paz, may soon be unable to function.

DISASTERS: Extreme weather events including hurricanes, fires and storms could triple by 2030. A record $165 billion was lost in the 2005 hurricane season – and poor people have no insurance.

DISPLACEMENT: An estimated 26 million people have been displaced by climate change, mainly by extreme weather and drought. Each year there are a million more. Rising sea levels have already forced out island communities from Vanuatu, Tuvalu and the Bay of Bengal.

But the G8 leaders who met in Italy earlier this month were immune to these facts – the gulf between the science and the real world, and the fantasy finance world of global capital, is wider than ever.

After the summit Jeremy Hobbs, Executive Director, Oxfam International saw no results: “For Obama it was ‘yes we can’, for Berlusconi’s G8 it’s ‘no we won’t’. This summit has been a shambles, it did nothing for Africa, and the world is still being cooked. Canada 2010 is the end of the road for the G8 - all the promises they have made are due. They have 12 short months to avoid being remembered as the ones who let the poor and the planet die.”

Capitalism as a system is not opposed in principle to allowing people to die in order to sustain its own continuing existence, whether by war, hunger or genocide. As writer Naomi Klein said in a recent speech: “Capitalism can survive this crisis. But the world can't survive another capitalist comeback.”

Penny Cole
Environment editor