The effects of COVID-19, rising global inequality and soaring food prices caused by the war in Ukraine are set to send more than 250 million more people into poverty this year, charity group Oxfam International said in a report yesterday.
The combined hit could result in a total of 860 million people living below the US$1.90 a day line by the end of this year, or 263 million more than the projection before the COVID-19 pandemic, the group said.
That is equivalent to the entire population of France, Germany, Spain and the UK combined.
Oxfam released the report ahead of the IMF-World Bank Spring Meetings taking place next week in Washington, where global economic challenges and the shock of Russia’s invasion are set to feature as two of the main focuses.
The poorest people would be hit hardest, with food costs accounting for 40 percent of consumer spending in sub-Saharan Africa, compared with 17 percent in advanced economies, Oxfam said, citing an IMF report.
The return of inflation is a recipe for financial turmoil in lower-income nations that need US dollars for their energy, medicine and food imports, and whose debt is largely in the currency, Oxfam said.
To address the situation, Oxfam proposed a number of ideas.
They included an annual wealth tax on millionaires starting at 2 percent, and 5 percent on billionaires, which the organization estimated would generate US$2.52 trillion a year.
That would be enough to lift 2.3 billion people out of poverty, make enough vaccines for the world, and deliver universal healthcare and social protection for everyone living in low and lower middle-income countries.
“We reject any notion that governments do not have the money or means to lift all people out of poverty and hunger and ensure their health and welfare,” Oxfam International executive director Gabriela Bucher said. “We only see the absence of economic imagination and political will to actually do so.”
US President Joe Biden last month proposed a 20 percent minimum tax on households worth more than US$100 million. While it could generate hundreds of billions of dollars in new revenue and has strong support among many Democrats, it is unlikely to be passed anytime soon in the US Congress, where the party has razor-thin margins, because many moderate lawmakers are skittish about such a big tax overhaul.
Oxfam also is urging the G20 to cancel all debt payments this year and the next for all low and lower middle-income countries that require it.
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