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This blog post has been originally written for the ‘OECD Development Matters‘ blog by Winnie Byanyima, executive director of Oxfam International. This is an adapted version of the original post published here.
To say that the world’s poorest people are simply being left behind can sound like an unbearably polite understatement at times, designed not to offend the rich and the powerful.
I think of the girls I grew up with in Uganda who have worked hard all their life, paid their taxes and supported their communities, only to see themselves and their children remain poor, without essential services. I think of women in poverty like Dolores, who works in a chicken factory in the United States. She and her co-workers wear diapers because their employer denies them toilet breaks (Oxfam, 2016).
These women aren’t just left behind but trapped and exploited at the bottom of a global economy.
The 42 richest people now have the same wealth as the poorest 50% — 3.7 billion people. Last year, the top 1% reaped 82% of all new wealth (Oxfam, 2018). That bottom half — who helped create the wealth — received nothing. The majority of the world have not been left behind, they are being deliberately held back to enable a fabulously rich and unaccountable elite to march away into the distance.
Global wage growth has slowed; gender inequality, inextricably linked to economic inequality, stubbornly persists. Women dominate the least secure and least paid jobs. The unequal impact of climate change is trapping more people in poverty.
Yet, inequality and deprivation are not inevitable. They are the result of missed opportunities, and wrong-headed political choices that hardwired inequality into our economic model.
This is why Oxfam is focusing relentlessly on building a more human economy that realises and respects human rights. We know the tools proven to reduce inequality … from providing living wages, tackling harmful social norms to fighting with citizens for universal, high quality healthcare and education.
Governments have considerable policy space to reduce inequality. They can raise the wages of workers as they did in Brazil. They can tax the richest more, as they have done in South Korea. They can spend more on health and education to ensure every woman and man have opportunity. Applying these lessons, together with Development Finance International, we developed the Commitment to Reduce Inequality Index (Development Finance International and Oxfam, 2017), which measures action on social spending, taxes and workers’ rights in 157 countries.
Aid, used strategically, can help to build a more human economy. It can help end poverty and fight inequality in poor countries. It has the potential to deliver transformative finance from rich to poor nations, helping close the inequality gap between and within them. If aid needed a renewed calling, the crisis of economic inequality is it.
How? Predictable assistance can build effective states, support government budgets that pay teachers and nurses (OECD, 2015) (Oxfam, 2014) provide humanitarian assistance, and adopt a feminist aid approach to advance the twin goals of economic and gender equality.
This “inequality-busting aid” needs Development Assistance Committee (DAC) donors to support the people on the frontlines, be they in NGOs, unions, women’s rights movements or journalism, pushing governments for fairer policies. DAC donors must also help protect their civil and political rights, which are under threat worldwide.
We know about how not to use aid too. For example, donors should never instrumentalise aid to stop people fleeing from their homes for safety. As former UN High Commissioner for Human Rights Zeid Ra’ad Hussein said, “People don’t lose their human rights by virtue of crossing a border without a visa.” Privatising health and education, based less on evidence of effectiveness than blind faith in markets, pushes people further behind. Talented girls in poverty consistently lose out when education comes with a fee.
In the long term, aid needs to write itself out of a job. Helping governments to mobilise domestic revenues to deliver essential services, and ensure taxes are raised progressively and spent accountably, is shrewd. Yet in 2016, DAC donors only invested 0.18% of official development assistance (ODA) in domestic revenue mobilisation (Oxfam, 2018). And on all of this, DAC donors can give more — ODA accounts for 0.31% of their gross national incomes, less than half of their 50-year-old pledge of 0.7%.
In years past, life-saving aid was pivotal in the child survival revolution, closing the school enrolment gender gap and promoting environmental sustainability. Donors must now use aid strategically to help build a more human economy and leave poverty and inequality behind by 2030.
Oxfam (2016), No Relief: Denial of bathroom breaks in the poultry industry, Oxfam America, www.oxfamamerica.org/static/media/files/No_Relief_Embargo.pdf
Oxfam (2018), Reward Work Not Wealth (Oxfam briefing paper), Oxfam, https://d1tn3vj7xz9fdh.cloudfront.net/s3fs-public/file_attachments/bp-reward-work-not-wealth-220118-en.pdf
Development Finance International and Oxfam (2017), The Commitment to Reducing Inequality Index, Oxfam GB, Oxford,
OECD (2015), Evaluating the impact of budget support, https://www.oecd.org/dac/evaluation/Evaluation-Insights-Evaluating-the-Impact-of-BS-note-FINAL.pdf
Oxfam (2014), Working for the Many, Oxfam briefing paper, Oxfam GB, Oxford,https://d1tn3vj7xz9fdh.cloudfront.net/s3fs-public/file_attachments/bp182-public-services-fight-inequality-030414-summ-en_1.pdf
Oxfam (2018), Doubling Down on DRM, Oxfam America, Boston,https://www.oxfamamerica.org/static/media/files/DOUBLING_DOWN_ON_DRM_-_2018_LVC7aXc.pdf
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