Why 3 million more Kenyans might live in extreme poverty by 2019

Kenya: OXFAM has warned that Kenya's inequality may spiral out of control unless trends are reversed immediately.
A fresh report warns that Kenya will have 3 million more people living in extreme poverty by 2019 if remedial measures are not taken.

Winnie Byanyima, Oxfam International Executive Director, said in Kenya, 3 million more people could be pushed below the poverty line by the same year if inequality there remains at current levels rather than declining slightly.

Rising inequality could set the fight against poverty back by decades, Oxfam warned today as it published a new report showing that the number of billionaires worldwide has more than doubled since the financial crisis.

The report, Even it Up: Time to End Extreme Inequality, details how the richest people in the world have more money than they could ever spend while hundreds of millions live in abject poverty without essential health care or basic education.

In countries around the world, prosperity is not trickling down to ordinary people, but up to those at the top, whose exceptional wealth is growing ever more rapidly.

The richest 85 people, who Oxfam revealed in January as having the same wealth as the poorest half of the world’s population, saw their collective wealth increase by $668 million per day between 2013 and 2014. That’s almost half a million dollars every minute.

From the IMF to the Pope, from President Obama to the World Economic Forum, there is a growing consensus that inequality is a crucial challenge of our time and that failure to act is both economically and socially damaging.  Despite the warm words, little action has materialised.

The Oxfam report, endorsed by Graça Machel, Kofi Annan and Joseph Stiglitz among others, is the opening salvo of a new Oxfam campaign, also called Even it Up, to push world leaders to turn rhetoric into reality and ensure the poorest people get a fairer deal.

Action is needed to clamp down on tax dodging carried out by multinational corporations and the world’s richest individuals. Big global corporations and the wealthiest people must pay their fair share to governments’ coffers, so that countries can tackle inequality and build fairer societies.

Ms Byanyima argues: “Far from being a driver of economic growth, extreme inequality is a barrier to prosperity for most people on the planet. Today wealth is trickling upwards, and will continue to do so until governments act. We should not allow narrow-minded economic doctrine and the self-interest of the rich and powerful blind us to these facts.

“Around the world millions of people are dying due to a lack of health care and millions of children are missing out on school, while a small elite have more money than they could spend in a lifetime.

“Inequality hinders growth, corrupts politics, stifles opportunity and fuels instability while deepening discrimination, especially against women,” said Byanyima.

The potential benefit of redistributing the wealth of the very richest, by even a tiny amount, tells a compelling story. A levy of just 1.5 per cent on the wealth of the world's billionaires today could raise enough each year to get every child into school and deliver health care in the poorest countries.

The effect of curbing inequality would be as dramatic as would be the failure to act. In India, for example, halting the recent increase in inequality could enable 90 million more people escape extreme poverty by 2019.

Byanyima added, “Tackling inequality is not about being envious of fast cars and super yachts – it’s about the fact that the richest literally live longer and healthier lives than the poorest. We live in a world where there is plenty enough for everyone to improve their lot. Extreme inequality causes instability, conflict and even mental health problems that affect us all. It is time to even it up before it gets worse.”

Investment in free public services will be crucial to closing the gap between the richest and the rest. Every year, 100 million people are driven into poverty because they are forced to pay for health care.

From 2009-2014, at least one million women died in childbirth due to a lack of basic health services.(9) Meanwhile, education fees still exclude far too many. In Ghana, for instance, the poorest families would have to pay 40% of their income to send just one child to a low-fee school, underlining the importance of free education for all.

But for those at the top, it’s a different tale as they have enough assets to last them well beyond their years.

If the world's three richest people were to spend $1m every single day each, it would take each one of them around 200 years to exhaust all of their wealth.

This is not a rich country story; today there are 16 billionaires in Sub-Saharan Africa, alongside the 358 million people living there in extreme poverty, while in South Africa, inequality is now greater than it was at the end of apartheid.
 

East Africa specific data and statistics:

· The poorest 20 percent of Ethiopians are three times more likely to miss out on school than the wealthiest 20 percent.

· Over 50 percent of Ethiopian women have never been to school, compared to just over a third of men.
· In Uganda, enrolment rose by 73 percent in just one year – from 3.1 million to 5.3 million – following the abolition of school fees.

· In Uganda, under-five mortality among the top 20 percent has halved, but for the bottom 20 percent it has only fallen by a fifth over the same period.

· In 2008/09 the Rwandan government authorized tax exemptions that, if collected, could have doubled health and education spending.

·In Rwanda, for example, budget support has enabled the government to remove education fees and treat more people with HIV and AIDS.

·In Kenya, if inequality remains at the same level for the next five years, three million more people could be living in extreme poverty than if they reduced their Gini coefficient by just five points, the equivalent of a 12 percent reduction