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  HOME | Business & Economy (Click here for more)

Oxfam: Inequality Gets Worse Thanks Largely to IMF and World Bank

WASHINGTON – Institutions like the World Bank and the International Monetary Fund (IMF) are a big part of the reason why inequality is getting worse around the world, Oxfam Executive Director Winnie Byanyima warned in an interview with EFE.

“Inequality is getting worse... We have an economy where a few at the top are running away with the benefits and leaving millions at the bottom. Twenty-six people today own as much wealth as the bottom half of humanity – 3.8 billion people,” Byanyima said about the growing economic disparity.

Byanyima regretted that institutions like the World Bank and the IMF “are part of the problem, a big part of the problem, and they could be part of the solution because they hold a lot of power.”

“For the developing countries especially,” she said, “the World Bank and the IMF have lending instruments and they use them, combined with their policy advice, to shape the economic path of the developing countries.”

The director of Oxfam, an international confederation of humanitarian NGOs, is in Washington specifically to take part in the annual assembly of the two organizations, attended by the world’s chief economic leaders.

Among the subjects to be discussed is the world’s growing economic inequality, particularly in the most advanced economies, and the challenges linked to the automation of labor.

In the opinion of the Uganda official Byanyima, 60, there is a great need to “change the global economy and make it work for everybody,” because “right now, it is working for a few billionaires at the top and the big companies and not for the ordinary person.”

As for the extreme form of capitalism the world is currently experiencing, she gave Mexico as an example, where she said that entrepreneur Carlos Slim benefited for years “from a near monopoly of his company. He benefited from very, very low tax rates.”

“And that’s something that we see across the world, that very wealthy people are close to politics, to political power, and they’re able to shape the rules of the game,” EFE was told by Byanyima, who will soon leave her current position to become executive director of the Joint United Nations Program on HIV and Aids (UNAIDS).

Tax systems are a reflection and source of these growing economic woes.

“In a country like Brazil today, the 10 percent poorest people are paying a tax rate relative to their income that is higher than the 10 percent at the top. The tax system is so regressive, such that the poorest share a bigger burden of taxation relative to their income than the people at the top,” she said Byanyima also spoke about the recent occurrences in Ecuador, where the economic reforms launched by the administration of President Lenin Moreno included the elimination of fuel subsidies, which sparked a wave of massive protests that forced the government to drop the measure.

“We want the IMF and the World Bank to understand two things: one, when you are bringing austerity in a situation when the country is in economic crisis, social spending should always be protected,” she said, because that is something which “should never be cut. And the government should negotiate such things with the people. You cannot sit somewhere in secret and agree on an austerity package and pass the pain to ordinary people.”

Trained in aeronautical engineering at the University of Manchester in the UK, Byanyima has directed Oxfam since 2013, and before that spent seven years as director of the Gender Team in the Bureau for Development Policy at the United Nations Development Program (UNDP).

Her interview ended with a heartfelt call to action.

“No, we don’t have a choice. We have to reform this globalization because this globalization is a system that is unregulated, where the role of government has been pushed back and back and back. Governments have to come back and sit in their seat and regulate globalization for the benefit of people,” Byanyima said.


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