60% Of Countries Getting IMF, WB Loans See Rising Income Inequality, Finds Oxfam Study - Vibes Of India

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60% Of Countries Getting IMF, WB Loans See Rising Income Inequality, Finds Oxfam Study

| Updated: April 15, 2024 17:31

An analysis by Oxfam International found that 60 per cent of countries that receive loans or grants from the International Monetary Fund (IMF) and World Bank are facing high or increasing income inequality.

Oxfam, a non-profit group, explained that out of 106 such nations, 64 are seeing either high levels of inequality or a rise in inequality.

This is determined using a measure called the Gini coefficient, where a value above 0.4 is seen as a warning sign by the United Nations.

According to Oxfam’s study, 42 countries, including Ghana, Honduras, and Mozambique, have high income inequality. Additionally, in the past decade, inequality has increased in 37 countries, such as Burkina Faso, Burundi, Ethiopia, and Zambia.

Kate Donald, who leads Oxfam International’s Washington DC Office, criticised the IMF and World Bank, saying they claim to prioritise reducing inequality but support policies that widen the gap between the rich and everyone else.

“The IMF and World Bank say that tackling inequality is a priority but, in the same breath, back policies that drive up the divide between the rich and the rest,” said Donald.

She highlighted the struggles of ordinary people due to cuts in public funding for essentials like healthcare and education.

“Ordinary people struggle more and more every day to make up for cuts to the public funding of healthcare, education and transportation. This high-stakes hypocrisy has to end,” she added.

“But if the Bank is serious about tackling inequality, the first test will be making it a headline priority for its lending to the world’s poorest countries, being discussed now at the Spring Meetings,” said Donald, describing the World Bank’s agreement to prioritise reducing inequality for the first time since its establishment in 1944 as a ‘landmark move’.

The Spring Meetings, running from April 15 to 20, bring together officials from the IMF and World Bank to discuss global economic issues.

Oxfam also highlighted the slowdown in donor contributions to the World Bank’s International Development Association (IDA), which aids the world’s poorest countries, especially in Africa. This comes at a time when these countries are fighting debt crises.

The organisation proposed raising funds by increasing taxes on the super-rich, which could generate trillions of dollars to support development and address climate change.

It urged the G20 Finance Ministers, meeting during the Spring Meetings, to support such measures. Brazil, the current G20 Chair, has called for a global plan to ensure fair taxation of the wealthy, a move supported by France as well.

Oxfam highlighted the need for a global agreement that imposes substantial taxes on the super-rich to reduce inequality.

Donald said that there’s enough money available; it’s just a matter of directing it where it’s needed most.

“We don’t buy the excuse that ‘we can’t afford it’ – the money is there; it’s just not flowing to where it’s needed. We urgently need donor governments to step up their contributions to IDA, and for the G20 to move forward with a global deal to tax the super-rich. It’s all part of ensuring that rich countries and rich people pay their fair share towards tackling inequality and climate breakdown,” said Donald.

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