G20 must tackle ‘cost of profit’ crisis causing global chaos, says Oxfam – World

0

G20 countries are receiving US$136 million every day in debt repayments from the world’s poorest countries at a time when up to 828 million people face hunger.

The “cost of living” crisis is more accurately a “cost of profit” crisis – of the growing wealth of billionaires and the mega-profits of corporations – which is driving up poverty, hunger, debt and deprivation. around the world, says Oxfam, as the G20 summit begins in Bali.

“If the G20 is serious about tackling this impending global economic catastrophe, it needs to get its house in order. Therein lies the real cause of this crisis,” said Oxfam’s G20 chief, Joern Kalinski.

“In reality, we are facing a ‘cost of profit’ crisis. The rich are getting richer, while ordinary families and poorer countries are being stripped,” Kalinski said.

Since the start of the pandemic, poor countries have had to shell out US$113 billion to their creditors in rich G20 countries, during a period when four times as many people have died of Covid in the poorest countries as in the countries rich.

In 2021, on average, poor countries were forced to spend 27.5% of their budget on debt repayment, four times more than for health and 12 times more than for social protection. Even the public climate finance they receive from wealthy countries, including many G20 members, is 71% loan.

Meanwhile, the biggest companies in the G20 are making record profits. BP earned £7.1bntheir biggest profits in 14 years, and BNP Paribas 2.76 billion euros in the past three months alone. Nine out of ten of the largest fossil fuel companies are headquartered in G20 countries. US companies see their biggest profit margins since 1950 and were charged with “greed”; leading to higher inflation through higher prices.

The G20 is now home to 89% of all the world’s billionaire wealth, or about $10 trillion. Since 2020, that figure has increased by $1.88 trillion, creating 287 new pandemic billionaires. The energy and food billionaires are currently getting richer by half a billion dollars a day.

Oxfam urges the G20 to recognize the consequences this shocking inequality is having on ordinary citizens around the world in the form of mass starvation, death and deepening poverty.

In Somalia, Ethiopia and Kenya, historic levels of drought mean one person is likely to die of hunger every 36 seconds by the end of the year, as the worst-affected regions race towards famine. Women and girls, who are often the primary food producers, primary caregivers and guardians of household nutrition, are most at risk of hunger.

The war in Ukraine is an additional layer to the existing problems. As 828 million people face hunger, the world’s major food traders have made record profits and food and agribusiness billionaires have increased their collective wealth by $382 billion (45%) over the past two years. The United Nations has appealed for $17.1 billion in humanitarian food security assistance for 2022, but so far donors have given just $7 billion.

Globally, progress in the fight against poverty has stalled, according to the World Bank, with poverty increases during COVID-19 for the first time in decades. Inequality has increased too; with the poorest seeing their selvesincomes fall twice as much as the richest.

“Austerity is exactly the wrong reaction – a textbook error – that tears apart social safety nets and pushes people into poverty,” Kalinski said.

Recent research from Oxfam on inequality shows that despite the worst health crisis in a century, half of all poor countries have reduced their share of health spending. Almost half of all countries have reduced their share of the budget devoted to social protection, 70% have reduced their share devoted to education and two-thirds have not increased their minimum wage in line with economic growth. Over the next five years, three-quarters of all countries in the world are planning further cuts totaling US$7.8 trillion.

143 of the 161 countries surveyed by Oxfam have frozen tax rates for their wealthiest citizens, and 11 countries have even lowered them. Corporate tax avoidance also continues on an industrial scale with a $1 trillion in corporate profits were shifted to tax havens in 2019.

The G20 must tackle the root causes of hunger: extreme inequality and poverty, human rights abuses, conflict, climate change and rising food and energy prices. Oxfam says the G20 must craft an economic and social bailout that protects the rights of the poorest people and tackles extreme inequality. This means:

  • Advocate for systematic strategies to tackle inequality and track progress by rejecting austerity, increasing anti-inequality public spending, making taxes more progressive, and increasing workers’ rights and wages
  • Large-scale debt relief and meaningful debt cancellation for the poorest countries
  • Increased taxes on windfall profits, wealth and corporations
  • Issue more special drawing rights and allocate more to the poorest countries
  • Increase support to tackle inequality
  • Securing climate finance, especially for the most vulnerable countries
  • Commit to improving pandemic preparedness and building more resilient systems.

To stop the worsening hunger crisis, the G20 must:

  • Urgently mobilize financial resources for humanitarian emergencies
  • Addressing the root causes of hunger crises, including climate change, conflict, poverty and inequality, human rights violations and food price inflation
  • Ensure that blockades, economic sanctions and military activities in all countries do not impede the free, safe and reliable transport of food and agricultural supplies, especially to conflict-affected areas
  • Rebalancing power in food supply chains to create a more sustainable and just food system.

Remarks

  • “G20 countries receive $136 million every day in debt repayments from the world’s poorest countries”: Oxfam calculations based on the World Bank‘s International Debt Statistics database: Principal repayments plus interest paid by low- and lower-middle-income countries to G20 countries in 2022 divided by 365 days.
  • “Since the start of the pandemic, poor countries have had to shell out US$113 billion to their rich G20 country creditors”: Oxfam calculations based on the World Bank‘s International Debt Statistics database: Sum of repayments of principal plus interest paid by low and lower middle income countries to G20 countries in 2020, 2021 and 2022.
  • “The G20 is now home to 89% of all the world’s billionaire wealth, or about $10 trillion. This has grown to US$1.88 trillion, creating 287 new pandemic billionaires since 2020”: Oxfam calculations based on the Forbes Billionaires List from March 18, 2020 through October 31, 2022.
Share.

Comments are closed.