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News > World

Oxfam: Poorer Countries Closing Income Gaps, India's Increases

  • A woman flies a South African flag during the

    A woman flies a South African flag during the "Nelson Mandela: A Life Celebrated" memorial service at Cape Town Stadium Dec. 11, 2013 | Photo: Reuters

Published 9 October 2018

A new report by Oxfam uses social and health spending to measure inequality in 157 countries, with several African nations leading the way.

Oxfam says that some of the least wealthy nations in the world have, in fact, some of the smallest inequality gaps between the rich and poor.

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In the recently-released Commitment to Reducing Inequality Index Report 2018, Oxfam and Development Financial International calculates the inequality ranking of 157 countries and it turns out that some ‘developing’ countries, such as Namibia and South Africa both in Africa, and Uruguay in South America, are among a group of nations with growing economies actively working to decrease income inequality.

The report states that the leaders of these nations are doing so through a wide range of measures, including social spending and progressive taxation.

For example, the lower-middle income countries of Lesotho, Georgia, and Ethiopia all made strides to decrease inequality between 2004 and 2013. Lesotho has spent 14 percent of its budget on education and 12 percent on health using a progressive tax structure, along with negotiating with trade unions and increasing women’s labor rights. Georgia implemented similar progressive tax policies on education spending.

Oxfam found that Ethiopia has raised its education spending from 22 to 23 percent over the past year — the sixth highest education allotment among all nations surveyed.

Guinea, Mauritania, Saint Lucia, Angola, Ukraine, and Kazakhstan also spent significant portions of their national budgets on education, social welfare programs and health — the three main indicators Oxfam used to register combating inequality.

The report’s authors concluded that in contrast to these countries there was a relatively lower gross domestic product with wealthier developing countries such as India and Nigeria. Nigeria earned the least coveted 157th spot. According to the report, the African nation has failed to tackle a 10 percent child mortality rate and labor rights violations and tax violations are the norm in the oil-rich nation. Oxfam described India’s public health and education as “woefully” low.

Singapore came in at 149.

This is Oxfam’s second year using the index it created in 2017 to measure the world’s income inequality.

The top five countries in terms of equality, social spending and labor rights were: Denmark, Germany, Finland, Austria, and Norway. The bottom five were: Nigeria, Uzbekistan, Haiti, Chad, and Sierra Leone.

Matthew Martin, the director of Development Finance International said of the findings: “What’s most striking is how clearly the index shows us that combating inequality isn’t about being the wealthiest country or the one with the biggest economy. It’s about having the political will to pass and to put into practice the policies that will narrow the gap between the ultra-rich and the poor.”

In the United States, which Oxfam ranked as 23 overall, Moody’s has an ever-increasing income gap which could put its “creditworthiness” at risk.

Moody’s said on Monday in a report, that the widening income gap is worsening the public’s ability to repay on its debts because of weaker economic growth and ineffective government institutions.

"Over the past two decades, income and wealth inequality have increased in the U.S. as high and very high income households have commanded rising shares of income and wealth," Moody's analysts wrote.

"The top 10 percent of income earners have seen their overall median net worth increase by almost 200 percent since 1995, while the bottom 40 percent of income earners have experienced a decline in median net worth over the same period," researchers concluded of the United States.

Read the full Oxfam report here.


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