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We can beat rising inequality

COMMENTARY
By Winnie Byanyima | January 20th 2017

 

You could sit them all around a dinner table, or inside a single elevator. Meet eight men. The eight men who, you may need to read this twice, have as much wealth as the 3.6 billion people who make up the poorest half of the world.

Welcome to the worldwide crisis of inequality, one in which Africa takes centre stage.

Our continent continues to see the potential of our countless talented girls and boys kept at bay. And for all her abundant natural resources and wealth, Africa sees so much of this wealth leave our borders and shores, never to reach our brothers and sisters. Take the number of African billionaires - it has doubled since 2010. Meanwhile the number of people living in poverty in Africa has increased by 50 million since 1990.

Trickle-down economics? Give me a break.

Rampant inequality breeds discontent, frustration, fear, and anger – as we saw last year when citizens around the world expressed themselves at the ballot box.

In the United States, billionaire Donald Trump won the election after rallying many voters who’d had their jobs sent elsewhere as manufacturers looked for cheaper labour and bigger profits.

In the Philippines, voters rejected mainstream politicians and instead elected Rodrigo Duterte, after the country saw years of booming economic growth but virtually no benefits for the 25 percent of the population who have been living in poverty for the last two decades.

And in South Africa, one of the most unequal countries in the world, the African National Congress, the party of Nelson Mandela, was handed its worst defeat since the end of apartheid and lost control of Pretoria, Cape Town, and Johannesburg.

Governments have allowed all this anger build up and unless they are serious about tackling the growing gap between the richest and ordinary people, it will not go away. We’ve recited the problems many times, but what are we going to do about it? Have hope, despite everything.

Oxfam, like others, has been voicing outrage about the inequality crisis for years, but it doesn’t have to be this way. Inequality is not inevitable. We have the talent, imagination and skills to make the world a fairer place. I believe the blueprint to build a more human economy is before us: an economy that works for everyone and not just the fortunate few. Let me outline some ideas.

It’s no secret that progressive tax reforms are core in the fight against inequality. The World Bank called them “an essential component of any successful strategy for guaranteeing equal opportunity.” By raising taxes on the highest incomes, governments can raise the funds needed to invest in universal education and healthcare for their citizens – essential investments proven to reduce inequality.

Sometimes countries can aim to be progressive about tax, but are outdone by a global tax system working against them. The wealthiest thrive on cheating this system while the poorest countries and poorest people suffer. Rich individuals hiding their wealth in tax havens deny Africa $14 billion a year in vital tax revenues; enough to pay for healthcare for mothers and children in Africa that could save 4 million children’s lives a year, and employ enough teachers to get every African child into school.

So in a more human economy, governments would work together to prevent toxic competition between countries for corporate investment by slashing their corporate tax rates. Tax giveaways to corporations cost Kenya $1.1 billion a year, for example – that’s almost double their entire national health budget!

I join many on our continent in believing that business must drive growth and provide jobs for our young people. But we need the right kind of capitalism; where proceeds benefit all, including workers and local communities, not just rich shareholders.

Governments should support companies with pro-worker policies that do this. Cooperatives and other employee-owned forms of business often offer their workers better rights and wages. For African countries, this means supporting locally-owned farming cooperatives over large, foreign-owned “mega-farms,” which snatch up land from small farmers and concentrate profits in the hands of a few.

Finally and just as importantly, governments must champion policies that help unlock the potential of our women and girls. A human economy for Africa should see our girls have a chance to live fulfilled lives. They lose out but we all lose out when this does not happen: just think of the ingenuity and the creativity our world is missing out on when girls are forced out of school to pound maize and fetch water.

It is happening as you read this.

Closing the gap between rich and poor is fundamental to eliminating poverty, in Africa and across the world. Growth needs to benefit the majority, particularly women, and not just a fortunate few.

We cannot continue to have the benefits of economic growth accruing to those at the top, as is happening across Africa. Countries like Zambia that saw vibrant economic growth for some years only to see poverty levels increase at the same time.

Inequality threatens the hard-fought progress our continent has made. However, as a true African I remain incurably hopeful for our future. Our continent has huge potential, let us work together to make our economies and governments work for all of us.

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