Fighting inequality in Latin America and the Caribbean
Diving into Oxfam’s latest report about inequality in the region.
Latin America and the Caribbean (LAC) is the most unequal region in the world by wealth. In this week’s bulletin, we look at Oxfam’s latest report from the region, which is brimming with shocking stats. The report shines a light on the vast levels of inequality, what’s driving it and what needs to be done to tackle the problem.
LAC inequality in numbers
Billionaires get richer. There are 98 billionaires in LAC, with a combined wealth of $480.8 billion. Since 2000, their wealth increased by 368% in real terms – almost six times faster than the region’s economic growth.
Someone earning a minimum wage would have to work for 90 years to earn what a LAC billionaire makes in a single day.
As poverty rises. In 2023, the poverty rate in LAC reached 29% (183 million people) while extreme poverty rose to 11.4% (72 million people), higher than 2010. There are now 2.9 million more people living in extreme poverty compared to before the pandemic.
The likelihood of living in poverty increases when someone has two or more of the following characteristics: they are a woman, a young person, live in a rural area, are Afro-descendant or Indigenous.
Driven by a broken tax system. The tax system favours those who have the most —the richest 1% in the region pay proportionally less tax than the poorest 50%. Half of tax revenue in LAC comes from consumption taxes, which disproportionately affect lower-income households as they are the same level regardless of income. Revenue from taxes on corporate profits and capital gains decreased slightly between 2010 and 2021.
Just five countries levy taxes on net wealth while only nine have inheritance, estate and gift taxes. The region also has lower effective tax rates on capital gains compared to labour income.
Destination neoliberalism. Structural reforms and the return to democracy in the region have failed to deliver promises of well-being, inclusion and guaranteed rights. There has been a notable re-concentration of power in the hands of a small elite with neoliberal policies such as deregulation, increasing internal security to silence critical voices, and reducing social spending, among others.
There is a fascinating chapter about this in the report which you can read in Spanish, Portuguese or English here.
Scope for hope
It is an exciting time for LAC as regular Equals readers will know. Under Brazil’s leadership, the G20 is poised to agree on a new global standard to fairly tax the ultra-rich. This will come to a head in November at the leaders’ summit —a moment to keep your eye on.
Something to read and listen to
Read Aaron Reeves and Sam Friedman’s new data rich book, analysing the British elite from the Victorian era to today.
Watch former Equals Podcast host Nabil Ahmed speaking at the Democracy Summit about the shadow of global oligarchy.
Listen to the Inequality Podcast episode on Great Gatsby Curve.
Meet, Oxfam’s new boss Amitabh Behar as our first guest in the new Equals podcast season.
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