Challenge to World Bank and IMF to get serious about extreme inequality

April 9, 2014
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Global wealth inequality threatens economic and social viability

Following Oxfam’s January report revealing that just 85 people owned the same wealth as the bottom half of the world’s population, Forbes has updated its “billionaires’ list”, showing that extreme inequality has worsened – just 67 people at the top now own half the wealth.

Ray Offenheiser, Oxfam America Executive Director, said: “Bank President Jim Kim and IMF managing director Christine Lagarde have been outspoken about the dangers of skyrocketing inequality. This week we need to see real initiatives to back up their rhetoric.

“International financial institutions should change the policy advice they gives countries, and shift the balance towards investment in health, education and progressive fiscal policies.”

“The IMF should acknowledge that corporate tax dodging is a key driver of inequality – companies must pay their fair share.”

Developing countries lose an estimated $100 billion to $160 billion annually to corporate tax dodging.

“Austerity worsens inequality, as the IMF and World Bank know well. They advised aggressive cuts to health and education in developing countries in the 1980s and 90s, and some of these countries took two decades to climb back to square one. Gaps between rich and poor widened, economies were shattered, and the poor continued to get poorer even when growth improved.”

Oxfam will advocate for change during the IMF-World Bank spring meetings in Washington, including:

  • The IMF and World Bank putting inequality and poverty at the center of discussions with their members
  • Committing to measure the gap between the richest 10% and the poorest 40%
  • Changing IMF and World Bank lending and advisory policies to bring them in line with new thinking on the economic, social and developmental damage done by extreme income inequality
  • Pushing the World Bank to support of a goal on inequality in the new post-2015 global development framework.

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Notes to Editors

Christine Lagarde has said inequality damages long term growth and wastes human potential: https://www.imf.org/external/pubs/ft/survey/so/2014/NEW020314A.htm

World Bank President Jim Kim has committed the Bank to advancing shared prosperity https://www.linkedin.com/today/post/article/20140122175445-32702694-at-davos-income-inequality-should-be-front-and-center

 

For more information:

Scott Patterson
Media Relations

 

 

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