World’s rich ‘earn enough in year to end extreme poverty’

The charity said an “explosion in extreme wealth” was hindering efforts to tackle poverty, in a briefing released ahead of next week’s World Economic Forum in Davos, Switzerland.

Releasing The Cost Of Inequality: How Wealth And Income Extremes Hurt Us All, Oxfam said the net income last year of the 100 richest people was $240bn (£150bn).

In contrast, people in “extreme poverty” live on less than $1.25 (78p) per day, and the charity called on world leaders to commit to reducing inequality to levels last seen in 1990.

Barbara Stocking, Oxfam’s chief executive, said a “global new deal” was needed to reverse decades of increasing inequality.

“We can no longer pretend the creation of wealth for a few will inevitably benefit the many – too often the reverse is true,” she said.

“Concentration of resources in the hands of the top 1 per cent depresses economic activity and makes life harder for everyone else – particularly those at the bottom of the economic ladder. In a world where even basic resources such as land and water are increasingly scarce, we cannot afford to concentrate assets in the hands of a few and leave the many to struggle over what’s left.”

Political and economic leaders from around the world will gather for four days at Davos from January 23.

Oxfam claimed the richest 1 per cent of the world’s population has increased its income by 60 per cent in the past 20 years, with the financial crisis accelerating rather than slowing the process.

It warned that extreme wealth is “economically inefficient, politically corrosive, socially divisive and environmentally destructive”, with the richest 1 per cent using up to 10,000 times more carbon than the average US citizen.

The charity urged world leaders to close tax havens, saying their combined $32 trillion (£20 trillion) holdings equate to a third of all global wealth and could yield an extra $189bn (£118bn) in tax revenues.

Other ideas it suggested for a “new deal” included reversing “the trend towards more regressive forms of taxation” and a global minimum corporation tax rate.

It also urged an increased investment in free public services and safety nets for those out of work or ill.

The briefing pointed out that the World Economic Forum’s own Global Risk Report rated inequality as one of the top global risks of 2013, something the IMF agrees with.

Oxfam said world leaders should learn from countries like Brazil, which has “grown rapidly while reducing inequality”, and also cited former US president Franklin D Roosevelt’s New Deal in the 1930s during the Great Depression.

Ms Stocking added: “From tax havens to weak employment laws, the richest benefit from a global economic system which is rigged in their favour.

“It is time our leaders reformed the system so that it works in the interests of the whole of humanity rather than a global elite.”