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News : Global Economy Last Updated: Jan 9, 2015 - 5:19 AM


Davos 2014: Richest 85 people worth as much as 3.5bn poorest; Few poor countries by 2035
By Michael Hennigan, Finfacts founder and editor
Jan 22, 2014 - 6:28 AM

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Bill Gates with health workers in Accra, Ghana, in 2013

Davos 2014: The World Economic Forum's annual meeting opens in Davos, Switzerland today and on the eve of the gathering of political leaders and members of the global business elite, Oxfam International issued a report which shows that the 3.5bn people in the bottom half of the world’s population owns the same as the richest 85 people in the world. However, reflecting the dramatic benefits of globalisation in the decades since 1945, Bill and Melinda Gates in their philanthropy's annual letter predict that by 2035, there will be almost no poor countries left in the world.

This massive concentration of economic resources in the hands of fewer people presents a real threat to inclusive political and economic systems, and compounds other inequalities – such as those between women and men. Left unchecked, political institutions are undermined and governments overwhelmingly serve the interests of economic elites – to the detriment of ordinary people.

In the paper [pdf], Oxfam shows how extreme inequality is not inevitable, with examples of policies from around the world which have reduced inequality and developed more representative politics, benefiting all, both rich and poor. Oxfam calls on leaders at the 2014 World Economic Forum at Davos to make the commitments needed to counter the growing tide of inequality.

  • 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 $110tn - - 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 US, the wealthiest one percent captured 95 percent of post-financial crisis growth since 2009, while the bottom 90% became poorer.

By 2035, there will be almost no poor countries left in the world. There will be countries will be held back by war, politics (such as North Korea) or geography (such as landlocked states in central Africa). However, every country in South America, Asia and Central America (except likely Haiti) and most in coastal Africa will have become middle-income nations. More than 70% of countries will have a higher per-person income than China does today.

This is the prediction of Bill and Melinda Gates, the founders of the world's biggest philanthropy, in their 2014 annual letter.

They say that in our lifetimes, the global picture of poverty has been completely redrawn. Per-person incomes in Turkey and Chile are where the U.S. was in 1960. Malaysia is nearly there. So is Gabon. Since 1960, China's real income per person has gone up eightfold. India's has quadrupled, Brazil's has almost quintupled, and tiny Botswana, with shrewd management of its mineral resources, has seen a 30-fold increase. A new class of middle-income nations that barely existed 50 years ago now includes more than half the world's population.

"And yes, this holds true even in Africa. Income per person in Africa has climbed by two-thirds since 1998—from just over $1,300 then to nearly $2,200 today. Seven of the 10 fastest-growing economies of the past half-decade are in Africa."

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