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October 6, 2015

‘Thanks, but the truth is I hate being a refugee’: a young Syrian introduces Oxfam’s new briefing

October 6, 2015

Where has the global movement against inequality got to, and what happens next?

October 6, 2015
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Katy Wright, Oxfam’s Head of Global External Affairs, stands back and assesses its campaign on inequality.Katy Wright

The most frequent of the Frequently Asked Questions I’ve heard in response to Even it Up, Oxfam’s inequality campaign. is “how equal do you think we should be?”

It’s an interesting response to the news that just 80 people now own the same wealth as half the world’s population put together, and the best answer was that given by Joe Stiglitz to a group of UN ambassadors: “I think we have a way to go before we worry about that.”

So how far do we have to go, exactly? The good news is that inequality is no longer just the concern of a small number of economists, trades unions and social justice campaigners. It’s now on the agenda for the international elite.

the inequality busThat partly reflects a growing realisation that inequality may be a problem for us all, not just those at the bottom. The Spirit Level  raised questions about the impact of inequality on societies, and the rise of Occupy pointed to a growing political concern.

More recently, research papers from the IMF have demonstrated extreme inequality is at odds with stable economic growth, and that redistribution is not bad for growth. Significantly, this shift in focus from the IMF has been driven by Christine Lagarde. To the outside world, the IMF now officially cares about inequality, as do Andy Haldane at the Bank of England, Donald Kaberuka (outgoing head of the African Development Bank), and Alicia Barcena of the Economic Commission for Latin America and the Caribbean, to name a few.

The World Economic Forum too has repeatedly warned of inequality as a major global risk  (as well as providing, through its Davos meetings, the perfect backdrop to Oxfam’s much-publicised ‘killer facts’).

Finally, the inclusion of an inequality goal in the new Sustainable Development Goals indicates a willingness to see

inequality reduction as an explicit policy aim of government.  I remember being told in early 2013 by a UK Government adviser that Oxfam’s very use of the word inequality in a headline was “very unhelpful”. Two years later and that government is ready to champion a new set of global goals with reducing inequality in at goal number 10 (no irony intended).

So far, so useful: for NGO campaigners, allies don’t come more unusual than these establishment voices.

But we now face three challenges:

First is the basic one: how to ensure that institutions that have started to talk about inequality turn this into action? A second and more difficult challenge will be to force through reforms that go further than institutions intended, and involve going up against vested interests.

And the third challenge is perhaps Oxfam’s greatest: How to ensure that this concern for inequality actually benefits

credit: Paul Smith, Panos

credit: Paul Smith, Panos

poor people? Interestingly recently it’s the IMF that appears more worried about extreme income inequality – because of the impact on economic stability – than the World Bank, which has been more cautious, despite its poverty mandate. If the actors we are relying on for change are primarily motivated by concern for GDP, for political stability, and to preserve what works for them, we will need to work to ensure that responses to inequality are not delivered solely on the terms of those at the top, in order to keep those in the middle happy.

So what opportunities exist that we can use?

Where we’ve seen progress, we should keep pushing: Tax dodging is now a regular agenda item at global summits, but so far efforts have tended to be in response to the needs of developed countries. The current mandate for tax system reform is with the OECD, but even before its action-plan on Base Erosion and Profit Shifting has been published, tax campaigners see it as a plan drawn up by rich countries that won’t help poorer countries keep corporate profits onshore.

Now the IMF and World Bank are looking to deepen their dialogue with developing countries on tax issues and to strengthen the voice of developing countries in the international debate on tax. In addition, the Financing for Development Summit in Addis saw G77 countries being more outspoken in their demands to have a say in global tax rules. With these dynamics enabling us to keep tax on the agenda and to widen the scope of institutions involved, a broader redesign of the global tax system could be on the cards.

We shouldn’t be fixated on governments as targets: Many people’s daily experience of inequality is not as voters; it’s as workers or customers or small business owners. Oxfam’s Behind the Brands campaign has shown how swiftly even big multinational companies will respond to pressure on their public image, in comparison to the sluggish response of governments. Companies paying outlandish pay ratios, investors who can influence corporate behaviour, or individuals using anonymous shell companies, all could be targets.

Neither is it necessarily the case that such victories would be at the expense of more systemic change. The campaign to get organisations to divest from fossil fuels has allowed local, easily replicable campaigns to force change across a range of institutions, creating a domino effect of small victories and indirectly increasing the pressure on government policy to move away from fossil fuels.

Brazil

Brazil

Stopping bad things happening may be just as important: When it comes to challenging what is broadly known as the privatisation of aid (use of Public-Private Partnerships – PPPs, financial intermediaries, blended finance etc) it’s useful to share a common language of concern for inequality with those you’re trying to influence.

But that argument must be joined with evidence and politics to ensure change: We’ve seen success in recent years in creating national political fights over attempts to introduce user fees for healthcare, and in using investigative efforts to highlight the dangers of PPPs for ensuring public services reach the poorest people.

There’s opportunity here for institutional change too: Jim Kim at the World Bank is progressive on the issue of removing user fees on healthcare, and promoting free healthcare should be part of his legacy issue within the Bank.

Of course, added to these suggestions would be a wealth of other opportunities to push change with national governments – spotting and using political opportunities to do so.

Oxfam has played a small part in drawing attention to the inequality crisis, and in influencing the right people to be concerned. Achieving change will mean a lot more than just repeatedly calling for ‘rhetoric to turn into reality’ or Duncan’s bugbear, ‘political will’. Removing the ideological barriers is important, but the decisions of those in power are rarely made purely on policy considerations. Policy change on this scale needs a combination of ideas, public and peer pressure, leadership, and events, accidents and plain good luck.  The role of activists is to keep a careful eye on what’s going on, build alliances and seize opportunities when they arise.

1 comment

  1. Here’s an interesting take on how we could address inequality:

    ‘First, the importance of government as a counterforce to the normal pattern of economic development in inequality. In the South African debate, at least outside the academic world, there has not been sufficient acknowledgement of the importance of government’s role. For all its weaknesses, it has played a pivotal part in redistributing income and stabilising South African society.

    One estimate shows that South Africa’s Gini coefficient, which measures levels of inequality for income before social transfers, is 0.69. For income after social transfers it is 0.52 and for income after taxation it is 0.47. A figure of 0 is considered perfect levels of equality and 1 perfect inequality. The democractic government introduced a massive social grant system which now distributes R155 billion to 16 million South Africans. Can you imagine what South African society would have looked like without government intervention?’
    Imraan Valodia, Dean of Commerce, Law and Management, University of the Witwatersrand, http://theconversation.com/what-south-africa-can-learn-from-piketty-about-addressing-inequality-47658

    Redistribution… State led no less….

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