Business elite meet in shadow of report: 62 people own same wealth as half the planet

DAVOS, Switzerland -- The world's political and business elite are being urged to do more than pay lip service to growing inequalities around the world as they head off for this week's World Economic Forum in the Swiss ski resort of Davos.

See Full Article

Two reports published Monday, from Oxfam and public relations firm Edelman, warned that the widening gap between the haves and have-nots since the global financial crisis is undermining a decades-long effort to reduce global poverty and fueling the rise of populist politicians.

According to Oxfam, the scale of the problem is increasingly stark: just 62 people, it says, own the same wealth as half the planet. The compares with 388 people just five years ago, when the global economy was just emerging from its deepest recession since the Second World War.

While the wealth of the poorest half of the world's population -- more than 3.6 billion people -- has fallen by a trillion dollars, or 41 per cent, since 2010, Oxfam said in its report that the wealth of the super-elite has risen by around half a trillion dollars.

Though acknowledging that dealing with inequalities has become a part of discussions in Davos, Oxfam said it's time for leaders to do more than just acknowledge the problem, especially if they want to hit poverty-reduction targets.

"It is simply unacceptable that the poorest half of the world's population owns no more than a few dozen super-rich people who could fit onto one bus," said Winnie Byanyima, Oxfam International Executive Director, who will again attend Davos, having co-chaired last year's event.

Tax havens, she said, are at the core of the rigged system that allows big corporations and wealthy individuals to avoid paying their fair share of tax.

"I challenge the governments, companies and elites at Davos to play their part in ending the era of tax havens, which is fuelling economic inequality and preventing hundreds of millions of people lifting themselves out of poverty," said Byanyima. "Multinational companies and wealthy elites are playing by different rules to everyone else, refusing to pay the taxes that society needs to function."

Oxfam reckons around $7.6 trillion of individuals' wealth sits offshore, around 12 per cent of the total, and that around $190 billion could be made available for poverty-fighting initiatives if tax were paid on that wealth. Closing the loopholes, which Oxfam says are used by nine out of ten of the WEF's sponsoring corporations, will help governments meet their goal of eliminating extreme poverty by 2030.

Over the past few years, those voicing concerns over growing inequalities have increased. Even the International Monetary Fund has warned of the perils to growth stemming from this gap.

According to Edelman, inequalities within society are already driving political change and that could put a break on economic potential.

In its annual survey of trust levels around the world, it found the largest-ever gap between the views of highly educated people and those with fewer years of schooling, driven by a disparity in income.

Edelman found general level of trust in institutions -- government, business, media and non-governmental organizations -- among college-educated people around the globe up 4 percentage points at 60 per cent, its highest level in the survey's 16 year-history. For the wider public, Edelman's trust gauge was up 2 percentage points at 48 per cent.

It noted that the U.S. has the biggest disparity in trust within its population, followed by Britain and France. Edelman's online survey of 33,000 plus respondents in 28 countries, was conducted between Oct. 13 and Nov. 16, 2015.

"We are now observing the inequality of trust around the world," said Richard Edelman, the president and CEO of Edelman. "This brings a number of potential consequences including the rise of populist politicians, the blocking of innovation and the onset of protectionism and nativism."

Around the world, there's been a groundswell of support for what were previously considered fringe political leaders and parties. Edelman noted the rise of Donald Trump, who is in a seemingly strong position in the race to be the Republican Party's candidate in the presidential election this fall, the politics of many countries are in flux.

Spain has seen the anti-austerity Podemos party perform strongly in last month's general election, while polls suggest that Marine Le Pen, leader of the far-right Front National in France, could be contesting the presidential runoff next year.

Edelman said that following the global financial crisis and global recession, most of the income gains have gone to the better-off, who have also benefited from low mortgage rates and rising house prices.

For those lower down the income scale, Edelman said the years since have been marked by a growing sense of insecurity and anger. Bad behaviour by banks, politicians and even the likes of German car giant Volkswagen further eroded trust.

"The trust of the mass population can no longer be taken for granted," said Edelman.


Latest Economic News

  • Can Facebook restore public trust after privacy scandal?

    Economic CTV News
    CHICAGO -- It's a scandal of privacy, politics and an essential ingredient of business success -- public trust. Facebook is confronting a costly, embarrassing public relations debacle after revelations that Cambridge Analytica may have misused data from some 50 million users to try to influence elections. Source
  • China tells U.S. it will defend interests after Trump tariffs

    Economic CTV News
    BEIJING -- China's newly appointed economic czar told U.S. Treasury Secretary Steven Mnuchin on Saturday that Beijing is ready to defend its interests after U.S. President Donald Trump announced plans to slap tariffs on nearly US$50 billion in Chinese imports. Source
  • The biggest loser in a trade war between China and the U.S.? It's you (but don't worry about it)

    Economic CBC News
    The old adage tells us no one wins a trade war. So, the next logical question is: Who loses? Well, the short answer is — you do. Consumers have been the clear beneficiaries of globalization. Cheap stuff has flooded into North America at a historically unprecedented rate. Source
  • What's being done with your data: Experts ask, shouldn't someone get this under control?

    Economic CBC News
    Now that Facebook, Google and Amazon know pretty much everything about us, how they're using that information is drawing the focus of politicians throughout the Western world, asking in effect: "Shouldn't something be done about this?" Source
  • Bombardier executive compensation hits US$33.4 million in 2017

    Economic CTV News
    MONTREAL -- Bombardier's executive compensation rose seven per cent to US$33.4 million in 2017, according to a circular released ahead of the company's May 3 annual meeting. The increase comes after a year marked by improved results, but also by the Airbus takeover of the C Series program without the company having to pay a single cent. Source
  • U.S. sets May 1 tariff threat on Canada, Mexico amid rush to speed up NAFTA talks

    Economic CBC News
    The United States has just applied additional pressure in its rush to get a new NAFTA agreement within several weeks, establishing a May 1 deadline, after which Canada and Mexico would face tariffs on steel and aluminum. Source
  • United Airlines gives $10,000 voucher to traveller on overbooked flight

    Economic CBC News
    A passenger who was bumped off a full flight has scored the maximum prize — a $10,000 US travel voucher. A spokesperson for United Airlines confirmed Friday that a passenger got the big voucher, but he didn't name the person. Source
  • Canadian retailers could be boosted by a U.S. trade battle with China

    Economic CTV News
    MONTREAL -- U.S. President Donald Trump's plan to impose tariffs on up to US$60 billion of Chinese imports could help Canadian retailers by further easing cross-border shopping, even though a full-fledged trade war between the world's two economic superpowers would damage Canada's economy, experts say. Source
  • CRA audits just 5 Canadians out of hundreds of RBC Panama Papers accounts

    Economic CBC News
    Two years after it took aim at hundreds of Royal Bank clients exposed in the Panama Papers leak, the Canada Revenue Agency has decided just five cases require an audit. That's because most of the offshore accounts it unearthed ended up belonging to foreigners, the CRA says. Source
  • Manulife mix-up: $170K retirement nest egg transferred from account without warning

    Economic CTV News
    A Toronto woman’s retirement nest egg was transferred out of her RRSP account after Manulife Financial wired more than $170,000 to a foreign third-party stock transfer company, putting the funds in limbo amid an ongoing spat with the financial services giant. Source