The richest 1% in Latin America and the Caribbean owns 41% of the region’s total wealth and if this trend continues, in only 8 years’ time the progress that has been achieved there in reducing poverty could drastically reverse, warns Oxfam today.
‘Privileges that deny rights: Extreme inequality and hijacking of democracy in Latin America and the Caribbean,’ Oxfam’s latest report on inequality, is being released in Lima as the city gets ready for the Annual Meetings of the International Monetary Fund and the World Bank.
Oxfam ‘Even It Up’ campaigner, Rosa Cañete, said: “In the last ten years, we have seen a remarkable fall in poverty rates across Latin America and the Caribbean, but this success is set to not only stop but reverse due to inequality.
We are already seeing the gap between rich and poor widen once more, and with the region’s economy not growing as expected, the pressure is on to make sure 200 million more people do not fall into poverty again.”
Oxfam is calling on governments to prioritize reducing economic, social and power inequalities in the region.
Alongside the report, Oxfam and Peruvian news website, Ojo Público (Public Eye in English), have developed an internet-based application about inequality. The “inequality calculator” allows users from 17 Latin American nations to compare their monthly income with the rest of the population, including the wealthiest people in their country.
Oxfam’s report shows there is an extreme concentration of wealth that hinders economic growth and the fight against poverty.
In Honduras, a billionaire earns 16,460 times more than what someone among the poorest 20% of the population gets paid annually. On average, the annual income of Latin American billionaires is 4,846 times greater than that of the region’s poorest people.
“Wealth concentration goes hand in hand with greater power for the few; democracy is being hijacked by political and economic elites who use public resources for their private benefit,” says Cañete.
The report details multiple illegal practices showing how this hijacking of democracy operates, which all boils down to corruption and a “boys club” culture. From illegitimate lobbying to the corruption and over-valuing of public contracts to assigning civil servants to roles depending on their personal political agenda.
“Inequality is not inevitable; it is the result of governments´ decisions that can be changed if there is the political will. Democracies have to guarantee that the State responds to the interests and needs of the majority protecting the rights of all citizens, and not only the elites,” continued Cañete.
Falling commodity prices have hit Latin America´s economic growth, with ECLAC estimating a mere 0.5% growth for 2015. This context demands a development model that puts inequality front and center to offer sustainable solutions to poverty.
To avoid a negative backlash in poverty reduction, Oxfam recommends that governments in the region take on firm and simultaneous action that address inequality:
• Break the models that allow for the unfair concentration of wealth, income, land and opportunities in the hands of the few at the top.
• Stop the hijacking of democracy and prioritize the interests of the majority and not the privileges of a few.
• Ensure the provision of free, good quality public services for all to guarantee a fair and supportive society.
• Work towards an economic model that overcomes the dependency on commodities and diversifies productivity,
• Ensure equal rights and power between women and men.
