Join Friends of Pambazuka

Subscribe for Free!



Donate to Pambazuka News!

Follow Us

delicious bookmarks facebook twitter

Pambazuka News Pambazuka News is produced by a pan-African community of some 2,600 citizens and organisations - academics, policy makers, social activists, women's organisations, civil society organisations, writers, artists, poets, bloggers, and commentators who together produce insightful, sharp and thoughtful analyses and make it one of the largest and most innovative and influential web forums for social justice in Africa.

Latest titles from Pambazuka Press

African Sexualities

Earth Grab A Reader
Sylvia Tamale
A groundbreaking book, accessible but scholarly, by African activists. It uses research, life stories and artistic expression to examine dominant and deviant sexualities, and investigate the intersections between sex, power, masculinities and femininities
Buy now

Global NATO and the Catastrophic Failure in Libya

From Citizen to Refugee Horace Campbell
In this elegantly written and incisive account, scholar Horace Campbell investigates the political and economic crises of the early twenty-first century through the prism of NATO's intervention in Libya.
Buy now

Queer African Reader

Demystifying Aid Edited by Sokari Ekine, Hakima Abbas
A diverse collection of writing from across the continent exploring African LGBTI liberation: identity, tactics for activism, international solidarity, homophobia and global politics, religion and culture, and intersections with social justice movements. A richness of voices, a multiplicity of discourses, a quiverful of arguments. African queers writing for each other, theorising ourselves, making our ...more
Buy now

China and Angola

African Awakening A Marriage of Convenience?
Edited by Marcus Power, Ana Alves
This book focuses on the increased co-operation between Angola and China and shows that although relations with China might have bolstered regime stability and boosted the international standing of the Angolan government, China is not regarded as a long term strategic partner.
Buy now

How Europe Underdeveloped Africa

To Cook a ContinentWalter Rodney
Rodney shows how the imperial countries of Europe, and subsequently the US, bear major responsibility for impoverishing Africa. They have been joined in this exploitation by agents or unwitting accomplices both in the North and in Africa.
Buy now

Pambazuka News Broadcasts

Pambazuka broadcasts feature audio and video content with cutting edge commentary and debate from social justice movements across the continent.

AU MONITOR

This site has been established by Fahamu to provide regular feedback to African civil society organisations on what is happening with the African Union.

Perspectives on Emerging Powers in Africa: December 2011 newsletter

Deborah Brautigam provides an overview and description of China's development finance to Africa. "Looking at the nature of Chinese development aid - and non-aid - to Africa provides insights into China's strategic approach to outward investment and economic diplomacy, even if exact figures and strategies are not easily ascertained", she states as she describes China's provision of grants, zero-interest loans and concessional loans. Pambazuka Press recently released a publication titled India in Africa: Changing Geographies of Power, and Oliver Stuenkel provides his review of the book.
The December edition available here.

The 2010 issues: September, October, November, December, and the 2011 issues: January, February, March , April, May , June , July , August , September, October and November issues are all available for download.

Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 Unported License.

Features

The truth about extreme global inequality

Jason Hickel

2013-04-18, Issue 626

http://pambazuka.org/en/category/features/87041

Bookmark and Share

Printer friendly version


cc M M
The richest 300 people on earth have more wealth than the poorest 3 billion – almost half the world’s population. This is in part a result of neo-liberal policies that have ensured massive transfer of resources from the global South to the North

The crisis of capital, the rise of the Occupy movement and the crash of Southern Europe have brought the problem of income inequality into mainstream consciousness in the West for the first time in many decades. Now everyone is talking about how the richest 1% have captured such a disproportionate share of wealth in their respective countries. This point came crashing home once again when an animated video illustrating wealth disparities in the United States [url=mashable.com/2013/03/02/wealth-inequality/]went viral[/url] last month. When an infographic catches the attention of tens of millions of internet users, you know it’s hitting a nerve.

But the global scale of inequality remains largely absent from this story. So we at The Rules decided to put together a video that would give it some attention.

While this information is not new, it is still startling. In the video we say that the richest 300 people on earth have more wealth than the poorest 3 billion – almost half the world’s population. We chose those numbers because it makes for a clear and memorable comparison, but in truth the situation is even worse: the richest 200 people have about $2.7 trillion, which is more than the poorest 3.5 billion people, who have only $2.2 trillion combined. It’s very difficult to wrap one’s mind around such extreme figures.

But we wanted to do more than just illustrate the brutal extent of inequality; we also wanted to demonstrate that it has been getting progressively worse. A recent Oxfam report shows that ‘The richest 1% has increased its income by 60% in the last 20 years, with the financial crisis accelerating rather than slowing the process,’ while the income of the top 0.01% has seen even greater growth.

The video shows how this widening disparity operates between countries. During the colonial period, the gap between the richest countries and the poorest countries widened from 3:1 to 35:1, in part because European powers extracted so much wealth from the Global South in the form of resources and labor. Since then, that gap has grown to almost 80:1. How is this possible?

CAPITAL FLOWS FROM POOR TO RICH

The gap is growing in part because of the neoliberal economic policies that international institutions like the World Bank, the International Monetary Fund (IMF), and the World Trade Organization (WTO) have imposed on developing countries over the past few decades. These policies are designed to forcibly liberalize markets, prying them open in order to give multinational corporations unprecedented access to cheap land, resources, and labour. But at a serious cost: poor countries have lost around $500 billion per year in GDP as a consequence of these policies, according to economist Robert Pollin of the University of Massachusetts.

As a result we see a clear net flow of wealth from poor places to rich places. We designed the video to help people visualize this flow, and to show how it pumps up the Global North at devastating expense to the Global South.

Few people know about this constant siphoning of wealth. One reason for this is that the discourse of aid takes up so much space. Consider the enormous publicity captured by Jeffrey Sachs and the Millennium Development Goals, or Bono and Bob Geldof, or even big charities such as Save the Children, Christian Aid and Action Aid. Governments of rich countries constantly celebrate how much they spend in aid to developing countries, and multinational corporations splash CSR credentials across annual reports and product lines; neither confess how much they take out of developing countries.

The video highlights the fact that aid disbursements from rich to poor pale in comparison to the amount of capital that flows the other direction. Tax avoidance alone accounts for more than $900 billion each year – money that corporations steal from developing countries and hide in tax havens (or thiefdoms, more accurately), of which the City of London is the global hub. Debt service accounts for about $600 billion each year, much of it paid on the compound interest of illegitimate loans accumulated by dictators long since deposed. Both of these flows can be understood as direct transfusions of cash from poor to rich.

There’s much more that we could have included in the video. Land grabs, for example: Fred Pearce’s new book, The Land Grabbers, shows that land exceeding the size of Western Europe has been grabbed from developing countries by corporations in the past decade alone. If we could quantify the value of that land, we could have added a huge amount to the $2 trillion stack of cash that the video depicts flowing from poor to rich. Or consider climate change. A 2-degree rise in global temperature will cost regions like Africa and South Asia about 5% of their GDP, much more than rich countries will suffer despite the fact that they bear most of the responsibility for causing this disaster. Losses on this level make aid seem insignificant.

These are the ultimate drivers of poverty and inequality. These are the problems that we need to tackle.

DEMOCRATIC DEFICIT

It bears pointing out that the geographic divide that the video depicts between the Global North and the Global South doesn’t make as much sense today as it once did. We tried to show how both China and Russia embody this divide within their borders. But to be even more accurate we would have had to depict a small wealthy core of corporations and individuals – a global elite versus the majority of the world’s people. It’s no longer only about the West versus the Rest; the class divide is now internationally dispersed.

It remains true that the institutions that control the global economy (the World Bank, the IMF, the WTO, and various bilateral Free Trade Agreements, or FTAs) are monopolized by Western countries. But that does not mean that they represent the interests of voters in those countries, for the people that run these institutions – central bankers, trade representatives, and their corporate lobbyists – are not elected by any democratic process.

The World Bank and the IMF have the power to impose economic policies on developing countries even when voters and elected politicians in those countries unanimously reject them. On top of this, they enjoy “sovereign immunity” status that protects them from lawsuit when their loans fail and their policies cause economic crisis and human devastation. In other words, not only are these institutions undemocratic, they also trump local democracies and override the will of voters in independent nations. The people affected have no recourse to justice.

We see the same democratic deficit in corporations. The majority of the world’s biggest economic entities are now corporations, not countries. They are run by CEOs who are unelected and unaccountable to any citizens; they are responsible only to their shareholders, and their mandate is to turn as much profit as possible at whatever cost to human life or the planet. These corporations often have more power than the governments of the countries in which they operate. One reason for this is that the WTO and most FTAs enforce “investor-state dispute agreements” that allow corporations to sue local governments for legislation that compromises their profits, like minimum wage laws or pollution laws.

WE NEED TO CHANGE THE RULES

The point here is that corporate power regularly transcends national sovereignty. We have to face the fact that the democratic institutions we worked so hard to shore up during the 20th century are no longer sufficient to protect us in this brave new world.

We need to change the rules, and we need to do it quickly. Given that real power is now routinely wielded at the supra-national level, we need to start building global democratic capacity that can keep rampant greed and profiteering in check.

This might mean a global corporate minimum tax that will put an end to trade mispricing and tax havens. It might mean a [url=blogs.ft.com/economistsforum/2011/07/a-global-minimum-wage-system/?]global minimum wage[/url] that will put a floor on the “race to the bottom” for labor. It will certainly mean wresting control of international trade laws from the hands of IMF bankers and WTO technocrats and placing it under new institutions that are transparent and democratic.

If we’re going to have a global economy, we need to have global democratic oversight. Can we accomplish this? Yes. And anyhow, we have no choice; the future of humanity, and of the planet, depends on it. They will say we’re dreamers for demanding these changes. But the dreamers are those who imagine that we can feasibly carry on with the status quo.

* Dr Jason Hickel teaches Anthropology at the London School of Economics and Political Science. This article originally appeared in Al Jazeera.

* BROUGHT TO YOU BY PAMBAZUKA NEWS

* Please do not take Pambazuka for granted! Become a Friend of Pambazuka and make a donation NOW to help keep Pambazuka FREE and INDEPENDENT!

* Please send comments to editor[at]pambazuka[dot]org or comment online at Pambazuka News.


Readers' Comments

Let your voice be heard. Comment on this article.




↑ back to top

ISSN 1753-6839 Pambazuka News English Edition http://www.pambazuka.org/en/

ISSN 1753-6847 Pambazuka News en Français http://www.pambazuka.org/fr/

ISSN 1757-6504 Pambazuka News em Português http://www.pambazuka.org/pt/

© 2009 Fahamu - http://www.fahamu.org/