International charity Oxfam, in its usual headline-grabbing style, has once again confronted the elite gathering of government heads and corporate leaders meeting for the World Economic Forum (WEF) at Davos, Switzerland with some embarrassing data.
“Eighty-two per cent of the wealth generated last year went to the richest one per cent of the global population, while the 3.7 billion people who make up the poorest half of the world saw no increase in their wealth,” says Oxfam’s ‘Reward Work, Not Wealth’ report.
To emphasise the growing abyss between the wealthy and the poor, the report points out: “It takes just four days for a CEO from one of the top five global fashion brands to earn what a Bangladeshi garment worker will earn in her lifetime.”
The growing inequality is even sharper in India where the richest one per cent account for 58 per cent of the country’s total wealth, compared to the global figure of 50 per cent; and just 57 ‘dollar’ billionaires in India now have the same wealth ($216 billion) as that of the bottom 70 per cent , says another Oxfam headline. The wealthiest of these are Mukesh Ambani ($19.3 billion), Dilip Sanghvi ($16.7 billion) and Azim Premji ($15 billion).
STORMY DEBATE
The Oxfam report has stirred up a stormy debate. Thousands who see the irony of the representatives of the rich debating ‘anti-poverty measures’ in the cosy mountains of Davos have tweeted in support of Oxfam; others have trashed the report as a clever play of statistics.
The critics point out that below the headlines and deep into the report is the admission that the bottom 50 per cent are less ‘poor’ and in fact doing better than was previously thought. Oxfam has corrected its data to state that last year it was not just eight persons, as stated, but 61 billionaires who had the same amount of wealth as the poorest half of humanity. The ‘adjustment’ had to be made because it was found that Credit Suisse, whose data Oxfam relies on, discovered that $8 trillion of wealth was not counted and more than $1 trillion belonged to the bottom 50 per cent. Most of this new ‘discovered’ wealth came from India, China and Russia – countries with large populations and poor data records. But, then, Oxfam ended up showing these countries’ poor to be poorer than they were!
Journalist Felix Salmon arguing in Cause and Effect said: “Divided between 3.7 billion people, average net wealth for the bottom 50 per cent is no longer $110 per person, as we thought last year, but rather $427 per person. That’s a really big difference.” But, then, poverty is not about absolute numbers. The poverty line has to be an ever changing assessment of what is the cost a decent livelihood. What is ‘poverty’ in 1960 cannot be ‘poverty’ in 1918. Aspirations have grown and now education and health are seen as ‘essentials’, which was not so four decades ago.
CHANGING POVERTY LINE
Government of India data claims that the share of population below the national poverty line has steadily fallen during the growth years from 45 per cent in 1993 to 37 per cent in 20014 and further to 22 per cent. This is suspect as it assumes that a person who spent `27 a day in rural areas and `33 in urban, was not below the poverty line. These income levels are not enough to buy two square meals a day!
The United Nations uses the more realistic figure of $1.90 per day (about `120) for the poorest countries; and the median for developing countries is $3.10 per day or about `200 a day. If we use the latter matrix, India had the largest number of poor people; and in 2015, as much as 60 per cent of the country’s population were ‘poor’.
Pooh-poohing the semantics of ‘poverty, economist Surjit S Bhalla commented: “It would have been simpler to just state that the absolute poverty line is being raised, period. Why would anyone object to that?”There is no denying that the absolute conditions of livelihood have improved. But what the Oxfam report seeks to remind us is that inequality is on the rise.
“Over the next 20 years, 500 people will hand over $2.1 trillion to their heirs – a sum larger than the GDP of India, a country of 1.3 billion people,” points out the Oxfam report. Some say it is sabre-rattling without providing answers. But, we need to thank Oxfam for reminding us that along with prosperity there is a lot of squalor.
gurbir@newindianexpress.com