Is it not pointless – and just plain greed – to continue to accumulate massive wealth beyond a certain comfortable threshold? — By Mrinal Roy
As every year Oxfam International released its annual report on the appalling state of inequality in the world ahead of this week’s annual Davos meeting of world leaders and top CEOs from across the world. The latest report entitled ‘Reward Work, Not Wealth’ made public this week is damning. It highlights that half of the world’s population representing 3.7 billion people received no share of the wealth created globally last year, while the richest 1% obtained 82 percent of the wealth created.
Any economic system which denies the multitude of employees its fair share of the wealth generated through their hard work is unacceptable and untenable. Yet this widely condemned model of economic liberalism jointly championed by governments and the private sector across the world goes on unabated.
According to Oxfam, the driving factors which enrich corporate owners at the expense of fair workers’ pay and conditions include ‘the excessive influence of big business over government policy-making and the corporate pressure to keep wages down to minimize costs at the expense of the legitimate rights of workers in order to maximize returns to shareholders’. How can such a decried mindset, reminiscent of a bygone era still prevail in modern times?
Winnie Byanyima, Executive Director of Oxfam International summarized this iniquitous situation as follows: ‘The people who make our clothes, assemble our phones and grow our food are being exploited to ensure a steady supply of cheap goods and swell the profits of corporations and billionaire investors.’
The Oxfam report also flags that ‘billionaire wealth has risen by an annual average of 13 percent since 2010 – six times faster than the wages of ordinary workers, which have risen by a yearly average of just 2 percent.’ This situation is the more shocking as it is clear that the ordinary worker needs the additional dollars to his wages to meet his basic living requirements much more than the billionaire. Is competitive advantage being shamelessly wrested at the expense of decent wages to factory floor workers despite the fact that without them there is no production? Is it not pointless (and just plain greed) to continue to accumulate massive wealth beyond a certain comfortable threshold?
Wake up call
Oxfam adds that in 2017, billionaires increased their wealth by $762 billion, enough to end “global extreme poverty seven times over”. Based on data from Credit Suisse’s Global Wealth Databook for 2017, there are now 2,043 billionaires worldwide, which showcase the massive concentration of wealth in the world.
‘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. In the US, it takes slightly over one working day for a CEO to earn what an ordinary worker makes in a year. It would cost $2.2 billion a year to increase the wages of all 2.5 million Vietnamese garment workers to a living wage. This is about a third of the amount paid out to wealthy shareholders by the top 5 companies in the garment sector in 2016.’
This obviously shows that a fairer sharing of wealth created with workers is feasible. Similarly, in Mauritius 39% or some 166,800 of the 427,700 employees in 2016 earning up to Rs 10,000 per month would have to work for more than 15 months to earn the monthly salary of a Mauritian MP. The scale and inequity of inequality in the world is a jolting wake up call for all of us.
No wonder the widening chasm of inequality in the world has become structural. Growing inequality has also been fueled by tax evasion by the wealthy through trusts and shell companies domiciled in tax havens. Inequality and the abject failure of the model of economic liberalism promoted by the political establishment to meet the aspirational needs of people and assure inclusive prosperity for all have been the root causes of the political backlash against governments in Europe and the US in recent years.
Support for Senator Bernie Sanders anti-establishment movement and the election of Donald Trump as President of the United States reflect this ras le bol in the US. In Europe, the legitimate revolt of people has led to the rise of populist parties in France, Germany, Holland, the UK, Austria, Greece, Portugal, Italy and Spain. The EU has been rocked by the Brexit vote in June 2016, the election of Emmanuel Macron, the young leader of the newly founded En Marche party as President of France and the political setbacks of UK’s Theresa May and Germany’s Angela Merkel last year.
Prioritizing social equity
The World Economic Forum (WEF) which hosts its annual meeting of political leaders and CEOs from across the world in Davos this week has acknowledged in a new report released this week that ‘decades of prioritizing economic growth over social equity has led to historically high levels of wealth and income inequality. With these disparities comes unhappiness and distrust of politicians.’
The meeting is to focus on ‘creating a shared future in a fractured world’. The report makes a strong case for social inclusion and inclusive growth. It is however important that the rhetoric in favour of social inclusion and the need to create a right balance between competitiveness and social equity is urgently matched by fairer remuneration and concrete actions to significantly reduce inequality.
Since last year, WEF has been arguing that Gross Domestic Product (GDP) is an inadequate measure of national economic performance. It had instead proposed the ‘inclusive development index’ as a better yardstick of economic performance. This is a composite development index which aims at better representing economic well-being, living standards and conditions.
The index not only includes GDP per capita, employment, productivity but also key indicators such as poverty level, life expectancy, public debt, median income, wealth inequality, carbon intensity, damage cause by pollution, investments in human capital and the depletion of natural resources.
An updated report on ‘inclusive development index’ was made public this week. The report concludes that ‘policymakers should not expect higher growth to be a panacea for the social frustrations that have roiled the politics of many countries in recent years’. GDP growth cannot be an end in itself. This crying lesson from the WEF must be learnt in Mauritius as well at a time when there is so much hype on growth.
The world is at a crossroads. The burning issues of inequality, inclusiveness, protecting planet Earth against climate change and safeguarding the environment have been shortsightedly sidelined for too long. The future can only be sustainable if these cardinal issues are comprehensively addressed and resolved to the satisfaction of the multitude.
Will we collectively have the determination to do what it takes to bequeath to our children and to future generations a world where the adverse fallouts of climate change are reversed, inequality is significantly narrowed, inclusiveness and the protection of the world environment and its rich biodiversity are key drivers of the national and international policy framework?
Is it too much to imagine such a world? The signs of the adverse effect of climate change on our planet are looming larger every year. Monster cyclones and powerful hurricanes wreaked destruction in the Caribbean and the US. Floods and landslides caused devastation and distress in China, Peru, California and France. The world witnessed extreme temperatures and weather conditions from Australia to the US. Severe monsoons caused extensive floods in India, Sri Lanka, Bangladesh and Nepal. Extreme weather-led devastation is on the rise every year. It is high time to urgently snuff the causes of climate change and global warming in the world
Earth’s health sheet
Scientists agree that the unprecedented rate of global warming trend and climate change in the world is the result of wanton human activity. Earth-orbiting satellites and other technological advances have enabled scientists to collect a broad spectrum of data over many years about our planet and its health sheet on a global scale. The analysis of data shows that 16 of the 17 warmest years on record have been registered as from 2001.
The temperature of oceans which have absorbed much of this increased heat has risen. Greenland and Antarctic ice caps have decreased in mass. Glaciers are shrinking. Global sea level has risen more rapidly over the last two decades. This is evidenced by the increasing erosion of our coastal shores. The extent and thickness of the Arctic sea ice has declined rapidly over the last decades. The unabated increase in the amount carbon emissions in the atmosphere has increased the acidity of surface ocean waters by about 30 percent, affecting corals and marine biodiversity.
The widespread damage and distress caused by adverse climatic conditions and torrential rains affecting the country since the beginning of the year has yet again reminded the country of the havoc wreaked by climate change. There is a need for a new approach to deal with it with the help of experienced experts which takes on board the consequences of extreme weather conditions and significantly higher volume of water to evacuate. Drains must be planned accordingly. People in high risk areas which are repeatedly affected by floods must be permanently relocated in safer locations.
The battle against inequality and for inclusiveness as well as the imperative of rooting out the causes of climate change and global warming is of paramount importance. The battle to protect the environment and our planet is equally important. They must necessarily be won for the benefit of our children and future generations.
Quoting the Upanishad in his address at Davos, Prime Minister Narendra Modi said ‘Vasudhaiva Kutumbakam’ : The world is one family. Will this unifying ethos prevail over narrow policies and the relentless pursuit of ever more wealth to bridge inequalities, promote social equity, assure inclusiveness and take cogent steps to stem the risks of climate change on Earth?
* Published in print edition on 26 January 2018