GDP fo­cus widens wealth gap - Ox­fam

The Star Early Edition - - BUSINESS REPORT - Ka­belo Khu­malo

THE FIX­A­TION on us­ing gross do­mes­tic prod­uct (GDP) growth in pol­icy mak­ing and tax avoid­ance by big cor­po­ra­tions had served to per­pet­u­ate in­come and gen­der in­equal­ity in South Africa and glob­ally. This is ac­cord­ing to a re­port re­leased by Ox­fam yes­ter­day.

While global wealth was at $255 tril­lion (R3.43 quadrillion), only 1 per­cent of the world’s pop­u­la­tion owned half of this. The “An econ­omy for the 99 per­cent” re­port found that in South Africa, the rich­est 1 per­cent owned 42 per­cent of the wealth in the coun­try – this equates 50 per­cent of the wealth in the hands of those in the bot­tom half.

Ayabonga Cawe, the eco­nomic jus­tice man­ager at Ox­fam South Africa, said pol­icy mak­ers needed to shift their fo­cus from achiev­ing a higher GDP growth and pur­sue growth that brought shared wealth.

“The nar­row pur­suit of GDP growth and pri­vate prof­its above else con­tin­ues to de­ter­mine global, na­tional and many cor­po­rate agen­das,” said Cawe. A key eco­nomic mea­sure of South Africa’s Na­tional De­vel­op­ment Plan is to see the coun­try hav­ing an av­er­age GDP growth of more than 5 per­cent and dou­bling its GDP per capita by 2030.

The re­port came a day be­fore the world’s most im­mi­nent busi­ness peo­ple and politi­cians con­gre­gated at Davos, Switzer­land, for the World Eco­nomic Fo­rum. The re­port found that seven out of 10 peo­ple in the world lived in a coun­try that had seen a rise in in­equal­ity in the last 30 years. Be­tween 1988 and 2011 the in­comes of the poor­est 10per­cent had gone up by an av­er­age of $3 per year.

The re­port also flagged tax avoid­ance as one of the key driv­ers to wealth in­equal­ity.

Cor­po­rate tax dodg­ing cost poor coun­tries $100bil­lion per an­num, the re­port said.

Sipho Mthathi, an Ox­fam SA ex­ec­u­tive di­rec­tor, said the gov­ern­ment could do more to en­sure com­pa­nies paid their share of taxes. “They can build an econ­omy where busi­nesses pay… taxes and con­trib­ute to the wider good.”

Of the 1 810 dol­lar bil­lion­aires fea­tured on the 2016 Forbes list, 89 per­cent were men and owned a com­bined $6.5trln. The Ox­fam re­port said it would take women 170 years to be paid the same as men.

Asanda Benya, an aca­demic at the Univer­sity of Cape Town, said gen­der equal­ity was fun­da­men­tally linked to wealth equal­ity. “We need to shift from poverty and min­i­mum wages and fo­cus on set­ting a liv­ing wage,” said Benya.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.