Johannesburg - 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 on Monday.
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 - which equates 50 percent of the wealth in the hands of those in the bottom half.
Ayabonga Cawe, economic justice manager at Oxfam South Africa, said policy makers needed to shift their focus from achieving higher GDP growth and pursue growth that brought shared wealth.
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“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 10 percent 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 $100 billion per annum, the report said.
Sipho Mthathi, 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 1810 dollar billionaires featured on the 2016 Forbes list, 89 percent were men and owned a combined $6.5 trillion. 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.