Comprehensive News Analysis 18-01-2022

C. GS 3 Related

Category: ECONOMY 

1. Inequality Kills: A study of the new OxFam report

Syllabus: Inclusive Growth and issues arising from it

Mains: Findings of the Oxfam ‘Inequality kills’ report; Recommendations.

Context:

• “Inequality Kills: The unparalleled action needed to combat unprecedented inequality in the wake of COVID-19” report released by Oxfam.

  • Oxfam is a U.K.-based consortium of 21 charitable organisations.

Details:

• The report notes that the COVID-19 pandemic has heightened economic inequalities across the world.

  • The report points out that 160 million people were rendered poor during the pandemic, while the ten richest people doubled their fortunes since the start of the pandemic.

• The report notes with concern the fact made obvious during the pandemic that the peoples’ life chances are directly linked to their access to wealth and healthcare, their positions of power in society, their racial and caste identities, and their geographic locations.

How has the pandemic aggravated global inequality?

• The most impacted section of the population due to the pandemic was the poor who often indulge in informal work. The pandemic-induced lockdowns led to the loss of livelihood opportunities for this section. This led to the loss of income and impacted the educational as well as nutritional security of the children of such families. The lack of social and income protections for poor people only added to their concerns. Thus the pandemic only pushed the poor into greater poverty.

• The report notes that the emergency government expenditure meant as a fiscal stimulus (estimated at $16 trillion) inflated stock prices and disproportionately benefitted the rich who invested in stock markets rather than helping the poor.

• The structural and systemic policy and political choices that are skewed in favour of the richest and most powerful people are also factors contributing to gross inequality.

Concerns:

Form of economic violence:

• The report describes gross economic inequality as being a form of institutionalized ‘economic violence’ against poorer people as it robs them of access to basic living standards.

Higher impact on the vulnerable:

• The major brunt of the inequality and the violence it begets is borne mostly by vulnerable sections like women and Dalits in India, Black, Native American and Latin persons in the United States and indigenous groups in many countries.

• Economic inequality only further marginalizes people already marginalized by social and economic structures and removed from political decision-making.

Impact on women:

• The lockdowns implemented to contain the spread of the pandemic led to an increase in violence against women worldwide, which has been described as a shadow pandemic.

• Available estimates note that around 13 million women have not returned to the workforce and 20 million girls are at risk of losing access to education due to the disruption caused by the pandemic.

• Hence the goal of gender equality has suffered a huge setback as women who were already unequal before the pandemic are now more unequal because of increased economic inequality.

Nutritional insecurity:

• Poverty, caused by rising inequality, also leads to hunger and deaths due to hunger. Around 369 million children have reportedly lost access to school meals during the pandemic robbing them of their access to the most nutritious meal of the day.

Impact on social trust in society:

• The higher economic inequality could fuel more crime and violence in society and would lessen social trust due to the glaring difference between the haves and have-nots.

Climate crisis:

• The report argues that the climate crisis is exacerbated by inequality between countries.

• The extreme neoliberal models of economic growth have led to a skewed system of carbon-intensive production that favours richer countries while shifting the risk onto poorer countries. This is undermining global climate action efforts.

Recommendations:

• The report warns that the increasing economic inequality could be profoundly dangerous for the world. The report argues for sustained and immediate action to end the pandemic, address global inequality and initiate concerted measures to tackle the climate emergency.

• The report proposes changes to the structures of government, economy and policy-making to rectify the gross global inequality.

Addressing vaccine inequity:

• Given that the “vaccine apartheid” (unequal access to vaccines between countries) and the lack of universal vaccination programs in many countries have been a major cause of the emergence of multiple new strains of the coronavirus that has led to the continuation of the pandemic, the report asks for the ending of monopolies over vaccines held by pharmaceutical companies.

• The vaccine manufacturing process and the associated technical know-how should be openly available to every qualified vaccine manufacturer to enable easy manufacturing of the vaccines and enable affordable vaccine access to everyone.

Taxation measures:

• The report proposes addressing the gross wealth inequality by administering solidarity taxes on the rich that have profited during and because of the pandemic.

  • A solidarity tax is a government-imposed tax that is levied in an attempt to provide funding towards theoretically unifying (or solidifying) projects. The tax acts in conjunction with income taxes and places an additional burden on taxpayers, including individuals, sole proprietors, and corporations.

• The report also calls for permanent cancellation of tax havens, progressive taxation on corporations and an end to tax dodging by corporations.

• The revenue thus collected should be redirected towards building income safety nets, universalising healthcare and investing in protecting the vulnerable sections.

Climate action:

• The unequal impact of climate change on underdeveloped nations needs to be recognized and acknowledged. These countries should be adequately financed for adaptation measures.

• The developed and developing countries should take higher responsibility for mitigation measures. There should be a higher investment in green technologies to reduce the carbon footprint.

Political empowerment:

• The report advocates for redistributing political power by strengthening workers’ unions and boosting the political representation of marginalised groups to ensure higher political bargaining power for these sections. 

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