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What is the News?
Oxfam has released a report titled “First Crisis, Then Catastrophe”.
What are the key findings of the report?
Increase in Poverty: The combined impact of COVID-19, inequality and food price hikes could result in 263 million more people living in extreme poverty in 2022. This could result in a total of, 860 million people living below the $1.90 (Rs 144.7) a day extreme poverty line.
Inequality: Due to the impact of Covid-19 and price inflation, the gap between the rich and the poor is at an unprecedented rate. Nearly half of the global population (3.3 billion) are living below the poverty line while a new person becomes a billionaire every 26 hours since the beginning of the pandemic.
Uneven increase in Poverty: The increasing poverty is not spread evenly across geographies. Food costs account for 40% of consumer spending in sub-Saharan African nations, while the same figure is half for those living in advanced economies.
Developing nations which were already faced with a worrying fiscal condition, are now witnessing debt levels unseen so far.
What are the suggestions given by the report?
Firstly, cuts in value-added taxes on staple food and cash transfers to support income should be implemented to protect the poorest from inflation.
Secondly, the World Bank and IMF should cancel debt payments for 2022 and 2023 for low and lower-middle-income countries.
Thirdly, a 2% tax on personal wealth above $5 million, 3% for wealth above $50 million and 5% for wealth above $1 billion should be imposed. This could amount to $2.52 trillion — enough to save 2.3 billion people from poverty.
Fourthly, Special Drawing Rights under the IMF should be reallocated to ensure it is debt- and conditionality-free.
Lastly, emergency support provided to lower-income countries should be increased.
Source: This post is based on the article “Quarter-billion people face extreme poverty in 2022 as the rich get richer: Oxfam” published in Down To Earth on 13th April 2022.
