As dozens of billionaires sip champagne and ski down the slopes at this year’s World Economic Forum in Davos, Switzerland, millions in Zambia suffer the harsh reality of extreme poverty, with two-thirds of the country living on less than $2.15 a day – and a fraction of the price of a cappuccino in Davos.
These contrasting scenes highlight a grim reality: the world’s wealth is grotesquely concentrated in the hands of a few. According to a a new Oxfam report this week, the wealth of the world’s billionaires grew three times faster in 2024 than the year before; five of them are predicted to become trillionaires within ten years.
The imbalance of wealth and power is particularly evident in international spaces. One example is the recent UN climate change talks (COP29), where more than 1,700 lobbyists for the fossil fuel industry outnumbered almost all participating national delegations. Rich nations prioritized their plans. Not surprisingly, the final climate commitments made at COP29 fell $1 trillion short of what will be needed each year.
The international spaces of the World Bank and the International Monetary Fund (IMF) are equally symbols of the power imbalance that raises inequality to new heights. Rich countries dominate both of these institutions, setting the rules of the international financial system in a way that serves their own banks and balance sheets.
Ninety four out of 100 countries with current loans from the World Bank and the IMF, they have reduced investment in public education, health and social protection in the last two years. Around the world, 3.3 billion people now live in countries that spend more on debt service than on education or health.
The IMF and the World Bank now recognize that inequality is a serious threat to economic stability, social cohesion and democracy. Yet their actions fuel further imbalances, despite claims of addressing economic and gender inequality.
Not much has changed: the powerful make the decisions; the marginalized pay the price. Money is flowing out of poor economies, into debt servicing, when it should be flowing.
Meanwhile, corporate wealth continues to rise. Seven of the 10 largest companies on Earth are controlled by billionaires, and their combined value exceeds the economies of Africa, Latin America and the Caribbean. At the same time, the wages of nearly 800 million workers failed to keep up with inflation, resulting in an average annual loss equal to 25 days’ income.
The most important step in any solution is to raise taxes on the super-rich, an idea that gained significant traction at the G20 meetings in Brazil last year. Not all countries have billionaires, but every country has a rich elite. Everywhere, the richest 1 percent should be taxed the most, and taxes should be reduced for the poorest.
The revenue generated by these taxes should fund increased investment in public services and climate action that benefit society: in education, health, housing and environmental protection, and in ensuring that the cost of living can become more reasonable.
One of the many social service initiatives that could benefit from the new tax revenue is cash transfer programs, which provide money directly to poor households. Research has shown that these programs can help to successfully alleviate the worst effects of poverty, including the burden of HIV/AIDS and tuberculosis, two diseases that most affect the less affluent sections of society.
We also need to make sure people can afford the medicines they need. New discoveries can prevent HIV transmission just twice a year. But when used for treatment in the United States, they cost $40,000, when we know they could cost as little as $40 if mass-produced. We need cheap, effective generics in every low- and middle-income country to control new infections.
People all over the world are looking for alternatives to the current world order. If we fail to act, the consequences will be catastrophic: an entrenched billionaire class will continue to undermine democratic systems around the world; social unrest will continue to grow as millions lose hope for a just future; and the climate crisis will get even more out of control. This is not a distant threat. This is happening now and it will affect everyone on the planet. It is enough to extinguish the bubbly of any glass of champagne – even those served in Davos.
The views expressed in this article are those of the authors and do not necessarily reflect the editorial position of Al Jazeera.
