A report by Development Finance International (DFI) and Oxfam have revealed that Nigeria and Singapore are among a group of governments that are fueling inequality.
This submission is contained in a newly released edition of the Commitment to Reducing Inequality Index developed by Oxfam and DFI.
The Index ranked 157 countries on their policies on social spending, tax, and labour rights -three areas the organisations say are critical to reducing inequality.
The report found that there was a clear divergence between governments such as the Republic of Korea, Indonesia, and Georgia that are taking positive steps to reduce the gap between rich and poor, and governments that are making it worse.
However, the report said all countries, even those at the top, could do much more.
The Index was released ahead of this week’s meeting of finance ministers, central bank governors, and other economic leaders at the World Bank and International Monetary Fund Annual Meeting in Bali, Indonesia.
The Index shows that “Nigeria ranks last for the second year in a row due to low social spending, worsening labor rights violations, and poor tax collection. The ranking reflects the well-being of the country’s population: one in 10 children die before their fifth birthday.”
With regards to Singapore, Oxfam and DFI said the country is now in the bottom 10 countries in the world at tackling inequality ranking 149, despite being among the world’s wealthiest nations. This ranking the report said, “is in large part, to a new indicator on the extent to which a country’s policies enable corporate tax dodging. It also has no minimum wage to its workers, except for cleaners and security guards.”
By comparison, the Republic of Korea is said to have taken significant steps to tackle inequality – boosting the minimum wage by 16.4 percent, increasing taxes on wealthy people and corporations, and expanding social spending. Other countries making progress include Georgia, which increased spending on education by almost 6 percent in 2017– more than any other country– and Indonesia, which increased its minimum wage by nearly 9 percent last year.
Denmark topped the Index thanks to a long history of policies that have delivered high and progressive taxation, generous social spending, and some of the best protections for workers in the world. However, recent Danish governments are rolling back many of these policies and inequality has risen rapidly.
Countries such as Argentina and Brazil also scored well because of actions taken by previous administrations. However, a 20-year social spending freeze in Brazil and austerity measures in Argentina are putting this progress at risk.
China was reported to spend more than twice as much of its budget on health than India, and almost four times as much on welfare spending, showing a much greater commitment to tackle the gap between rich and poor.
Inequality slows economic growth, undermines the fight against poverty and increases social tensions. The World Bank predicts that unless governments tackle inequality then the goal of eradicating extreme poverty by 2030 will not be met and almost half a billion people will still be living in extreme poverty.
Winnie Byanyima, Oxfam International’s executive director, said: “Simply put, inequality traps people in poverty. We see babies dying from preventable diseases in countries where healthcare budgets are starved for funding, while billions of dollars owed by the richest are lost to tax dodging. We’ve heard from women living on poverty wages and facing hunger, seeing none of the wealth they create. None of this is inevitable. Governments often act like they’re committed to fighting poverty and tackling inequality—this Index shows us if their actions match their promises.”