Davos Wants You to Know It Really, Really Cares About Inequality

Pope Francis would like the international business mandarins assembled at Davos for the annual meetings of the World Economic Forum to know that they really ought to be doing something about economic inequality in the world.

In remarks read by an emissary, Francis urged the crowd gathered at the event to combat inequality and to direct their efforts to fighting global inequality. "I ask you to ensure that humanity is served by wealth and not ruled by it," he implored.

As if to punctuate his remarks, Oxfam, the international charity group, released a report Tuesday highlighting the deplorable state of inequality in the world. The report describes a global economy in which an increasing share of income and wealth has been concentrated among the world's elite. The highlights of the report add up to a sobering picture of the state of the world:

  • Almost half of the world's wealth is now owned by just one percent of the population.
  • The wealth of the one percent richest people in the world amounts to $110 trillion. That's 65 times the total wealth of the bottom half of the world's population.
  • The bottom half of the world's population owns the same as the richest 85 people in the world.
  • Seven out of ten people live in countries where economic inequality has increased in the last 30 years.
  • The richest one percent increased their share of income in 24 out of 26 countries for which we have data between 1980 and 2012.
  • In the U.S., the wealthiest one percent captured 95 percent of post-financial crisis growth since 2009, while the bottom 90 percent became poorer.

Apparently, that great big sucking sound you've been hearing for the last few years was the vacuuming up of global wealth by the world's 1 percent.

Nonethless, the World Economic Forum is emphasizing that it is most definitely hip to this problem. And the organization -- which describes itself as dedicated to "improving the state of the world by engaging business, political, academic and other leaders of society to shape global, regional and industry agendas" -- has an uncomparable ability to get the world's most powerful in the same room talking about a given issue. In the parlance of the information economy, it is the pre-eminent "convener," capable of attracting celebrities, magnates, and dealmakers. And this year, the organization has decreed, that they will spend most of their time talking about inequality, declaring it inequality the top item on the agenda. To further underscore its emphasis on inequality, the World Economic Forum's annual report examining the greatest risks facing the global economy over the next decade settled on inequality as the most pressing problem.

The incongruous nature of all of this is rather spectacular. As Tuesday's report from Oxfam points out, few have benefited quite so much from the post-financial crisis economic recovery as the world's elite. While stock markets have recovered and corporate profits returned, the titans of business have been quite well for themselves, thank you very much. Profits have returned and jobs have not -- only all the better to keep costs down. But business leaders at Davos say they are busy working on a solution to this problem. "They can spend a week in the most luxurious circumstances, flying in their private jets, precisely because of the inequality that we are talking about," FP contributor and development economist Daron Acemoglu told NPR's "Marketplace."

It's easy to be cynical about Davos, but perhaps awareness of the employment crisis that has marked Western economies really has breached the gilded chambers of Davos' meeting rooms. "We need to push the reset button. The world is still much too much caught in a crisis-management mode," Davos founder Klaus Schwab told reporters last week. "We should look at our future in a much more constructive and strategic way. That is what Davos is about."

If Schwab and his colleagues are looking for a place to start in thinking about how to tackle inequality, they might as well begin with Oxfam's recommendations. Here's what business leaders, according to Oxfam, can do to combat global inequality: pledge to no longer dodge taxes, no longer use their wealth to gain political influence and undermine the democratic will of their fellow citizens, support progressive taxation on wealth and income, urge governments to provide universal healthcare, and demand a living wage for workers in their companies.

For a sense of why these things will probably not happen at Davos, it's instructive to have a look at another report, this one by the accounting firm PricewaterhouseCoopers and which was released shortly after the Oxfam report. It describes the outlook among a group of nearly 1,500 business executives and their views on the global economy. Some 44 percent are sufficiently optimistic to say that the economy will improve in the next 12 months. But if Oxfam is hoping business leaders will take the hand of government and walk together down a path of more equitable prosperity, they may be somewhat deluded. A full 72 percent of executives believe government over-regulation to be the most-pressing challenge facing their businesses.

Here's how Dennis McNally, the chairman of PwC, summed up the reports gloomier findings: "Worries continue to loom large on CEO horizons, with CEOs sending a clear message to government with their levels of concerns about over-regulation, fiscal deficits, and tax burdens at their highest levels."

Doesn't sound like business leaders are eager to line and pay their taxes in the name of ending global inequality.



HRW Report: Myanmar's Minorities Oppressed, North Korea Worse Than Ever

Human Rights Watch's annual human rights report doesn't make for uplifting reading. A snapshot of the human rights situation around the world, the report presents a depressing, if somewhat familiar conclusion: The perennial human rights offenders of the world haven't changed much. 

Myanmar's slow crawl toward democracy, for example, remains stunted by ongoing violence against Muslim and ethnic minority communities. Though the government released more than 200 political prisoners in 2013, HRW notes that attacks on Muslims, including those carried out by and ethnic Buddhists, increased during 2013. Efforts on the part of a 10,000-strong contigent of monks to pass a law banning interfaith marriage have further fueled the intolerance. Meanwhile, "state-sponsored discrimination" against ethnic Rohingyas has displaced 180,000 people. The government, despite a considerable international outcry, still refuses to grant citizenship to the marginalized group, despite the fact that many have lived in Myanmar for generations.

HRW's findings are particularly troubling given the apparent ambivalence of Aung San Suu Kyi, the country's long-jailed opposition leader who now serves in the its parliament, on these matters. As William McGowan wrote for Foreign Policy in 2012, "Suu Kyi has reacted like a deer caught in the headlights when confronted with the Rohingya issue ... At no point did she or the NLD denounce either the attacks or the racist vitriol that followed them, or express sympathy for the victims." In an October BBC interview, the Nobel Peace Laureate reiterated her unsettling position on violence against ethnic and religious minorities, implying that recent attacks on Muslims do not compare to the suffering of Buddhists at the hands of the former military regime. "There are many, many Buddhists who are also in refugee camps for various reasons... This is a result of our sufferings under a dictatorial regime," she said, adding that the conflict is driven by fear between Buddhists and Muslims: "There is a perception that global Muslim power is very great." 

Meanwhile, in North Korea, HRW reports that Kim Jong Un spent much 2013 consolidating his "rights-abusing rule." Since succeeding his father in 2011, Kim continues to rely on an extensive prison camp system to punish dissenters and has made it more difficult and dangerous for North Koreans to flee the country (leaving the country without permission is, of course, illegal).

Among other tactics, Kim has ordered border guards to shoot illegal crossers on sight. "The government now recognizes that the accounts of escaping North Koreans reveal Pyongyang's crimes -- so it is doing what it can to stop people from fleeing," Phil Robertson, deputy Asia director at HRW, said in a statement. "The fiction that Kim Jong Un might be somehow more moderate because of his education in Switzerland has been thoroughly refuted by the continued brutality of the government he now leads," he said. A recent Frontline documentary featuring secret footage from inside the country, as well as interviews with recent defectors, has shed a light on the depth of the Supreme Leader's brutality -- and the tiny rumblings of dissent against him.

HRW's findings on Russia are also noteworthy, given the Russian Foreign Ministry's recent attempt at playing rights arbiter by issuing its own scathing report of human rights abuses in the EU. As my colleague Hanna Kozlowska described the report, it presents Europe as "a dark, dark place, filled with Nazis and xenophobes ... but coming from Russia -- a country with a vibrant population of political prisoners, whose government largely controls the media, whose ethnic minorities are severely discriminated against, and whose laws prohibit the expression of one's sexual orientation -- the accusations are of course hugely hypocritical."

HRW would agree. While the report notes serious problems in the EU -- among them, continued discrimination against Roma, immigrants, and asylum seekers, and 47 percent of LGBT respondents in the EU said they had experienced harassment in the past 12 months -- it doesn't go easy on Russia. Despite all eyes being on the country ahead of the Sochi Olympics, President Vladimir Putin has overseen a legal crackdown on the country's sexual minorities, which has fostered homophobic rhetoric and violence. Moreover, has continued to crack down on free speech and political dissenters.

The full report is available here

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