The poverty and unearned wealth of colonialism

How historical and modern-day colonialism fuels inequality

In part 1 of the ‘Takers not Makers’ series, we set out the scale of extreme wealth. This week we look at the evidence, in Oxfam’s new report, that much of it is built on historical and modern colonialism.

Colonialism in numbers

Rich people in the Global North still own the world. Where the world’s wealth is held provides important context to understanding the ongoing impact of colonialism. Despite having just 1/5th of the global population, the Global North is home to 68% of the world's billionaires and 77% of their wealth. Almost 70% of the world's wealth is held in these countries.

Historical colonialism and the ruling class. The spoils of colonialism ended in the pockets of the rich. In the UK in 1900, the richest 1% had twice as much income as the poorest half of the population. The wealth extracted from India by the UK’s richest 10% would be enough to carpet the surface area of London in £50 notes almost four times over.

The fruit from the poisoned tree. Colonialism bestowed very high levels of inequality. Today, all the countries, bar one, that the World Bank defines as having high inequality are in the Global South. Racial and gender gaps in the Global South find their roots in colonialism. For example, white South Africans still earn three times more than their Black counterparts nearly 30 years after the end of apartheid. Globally, 24.3 million more women than men live in extreme poverty.

Economic engines of extraction. The imbalance in the financial markets alone leads to a payment of almost $1 trillion a year from the Global South to the Global North, of which $30 million an hour is being paid to the richest 1% in rich countries. Between 1970 and 2023, Global South governments paid $3.3 trillion in interest to creditors in the Global North.

Political domination. G7 countries hold 41% of the votes in the IMF and World Bank despite having less than 10% of the world’s population. An average Belgian citizen has about 180 times more voting power than an average Ethiopian in one of the financing arms of the World Bank.

Setting the tax rules. The OECD, a club of rich nations, continues to dominate global tax policy. Over 70% of all corporate tax abuse is channelled through OECD countries, depriving Global South countries of large amounts of tax revenue.

The modern-day tool of colonialism. Large multinational corporations dominate today’s global supply chains, benefitting from cheap labour and the continued extraction of resources from the Global South. Wages in the Global South are between 87% and 95% lower than wages in the Global North for work of equal skill.

De-colonisation. Oxfam is calling for an end to the flow of wealth from South to North. This includes cancelling debts, re-writing financial market and trade rules and guaranteeing fair representation of Global South countries in global institutions. Former colonial powers should offer formal apologies, and provide reparations to affected communities.

You can read the whole report, the methodology for these stats and the recommendations here.

Something to read, listen to, watch

Watch Break Through News’ excellent summary of Oxfam’s report

Listen (in case you missed it) to Jason Hickel on Equals, who talks about how colonialism never ended and drives today’s extreme inequality.