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Poverty-targeting role in growing wealth divide pinpointed in report aimed at Davos leaders


Brazil inequality

A new report outlining how the wealth of the poorest half of the world’s population shrunk last year while billionaire fortunes increased underlines how poverty-targeting contributes to the growing divide.

Oxfam’s new report, launched as political and business leaders gather in Davos for the World Economic Forum, highlights how the wealth of the world’s billionaires increased by USD$900bn in a year when the wealth of the poorest 3.8bn people was slashed by 11%. The rate of poverty reduction globally has halved since 2013 according to the World Bank, and extreme poverty is increasing in sub-Saharan Africa, the report says.

This increase in inequality “is a political choice… concrete steps can be taken to reduce it,” according to the devastating critique, released ahead of the World Economic Forum’s annual forum in Switzerland. It comes as Professor Klaus Schwab, the World Economic Forum’s Chief Executive, declared that globalisation “needs to be human-centred and inclusive,” as the Forum acknowledged the economic system’s “failure to consistently raise living standards”.

Oxfam’s new report uncovers the role of poverty-targeting of benefits in increasing inequality, division and conflict, backed by evidence from Development Pathways. It underlines that “the stronger the targeting, the more those who should qualify are left out… Indonesia’s PKH scheme is the most extreme example of this: it excludes 93% of those who should qualify for the benefits”.

The report comes ahead of a new global review of the effectiveness of poverty-targeting due to be launched by Development Pathways this spring.

Despite the evidence, the IMF and World Bank have undermined universal schemes, including pushing Mongolia to target its universal child benefit, the report adds, keeping the spotlight on the controversial intervention in the nation’s decision-making revealed by Development Pathways last year.

Oxfam also underlines that this harmful targeting is taking place even though many countries have found universal coverage affordable. Even the low-income nation of Nepal, “is showing the way through its universal old age and disability benefits”. Moreover, on the issue of identifying fiscal space, it mentions that in some countries such as Brazil (pictured) and the UK, the richest 10% are actually paying a lower rate of tax than the poorest 10%.

You can register your interest in the launch of the report on the global review of targeting’s effectiveness ahead of the spring launch. The full Oxfam report, detailing the evidence provided by Development Pathways, is available by clicking here.

Image: of Rocinha favela by AHLN is used under a Creative Commons License.



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