Income Inequality Rising In 60% Of Countries Receiving IMF, World Bank Loans: Reports

Oxfam International analysis reveals that a substantial 60 per cent of countries benefiting from grants or loans from the International Monetary Fund (IMF) and World Bank are experiencing high or increasing income inequality. Among 106 such nations, 64 exhibit either high inequality or a rising trend. High inequality is defined by a Gini coefficient surpassing 0.4, a threshold set by the United Nations.

According to Oxfam's findings, income inequality is notably elevated in 42 countries, including Ghana, Honduras, and Mozambique. Moreover, over the past decade, income inequality has surged in 37 countries, including Burkina Faso, Burundi, Ethiopia and Zambia.

Oxfam's head of Washington DC Office, Kate Donald, criticised the IMF and World Bank for promoting policies exacerbating inequality while acknowledging it as a priority. She emphasised the urgent need to end this "high-stakes hypocrisy" as ordinary people grapple with cuts to essential services like healthcare and education.

Donald hailed the World Bank's recent commitment to targeting inequality reduction, labeling it a "landmark move." However, she stressed that tangible action is needed, urging the World Bank to prioritise inequality in its lending to the world's poorest nations.

The upcoming Spring Meetings of the IMF and World Bank in Washington DC are set to address these issues. Oxfam highlighted stagnating donor contributions to the World Bank's International Development Association (IDA), which aids the world's poorest countries, particularly in Africa. Ballooning debt and interest repayments are diverting resources from vital sectors like education and healthcare.

Oxfam proposed that IDA funding shortfalls could be alleviated by increasing taxes on the world's super-rich, potentially generating trillions of dollars. The organsation called on the G20 Finance Ministers, convening during the Spring Meetings, to spearhead global efforts to ensure equitable taxation of the wealthy.

Brazil, the current G20 Chair, has advocated for such measures, with support from France. Oxfam emphasised the importance of a global agreement to tax the super-rich adequately, suggesting an annual net wealth tax of over 8 per cent to reduce billionaire wealth.

In conclusion, Oxfam urged donor governments to enhance contributions to IDA and called on the G20 to advance a comprehensive plan for taxing the super-rich. These measures are vital to addressing inequality and combating climate change effectively.