COVID E GUERRA. RAPPORTO OXFAM: “DALLA CRISI ALLA CATASTROFE”.

263 milioni di persone in più potrebbero trovarsi in condizione di povertà estrema nel 2022, per l’effetto combinato della crisi Covid, di una ripresa non inclusiva e dell’aumento dei prezzi dei generi alimentari, causato dal conflitto in Ucraina.

Complessivamente, 860 milioni di persone dovrebbero sopravvivere con meno di 1,90 dollari al giorno e 827 milioni soffrirebbero la fame.

È l’allarme lanciato da Oxfam con il rapporto “Dalla crisi alla catastrofe”, pubblicato il 12 Aprile 2022, alla vigilia degli Spring Meetings della Banca Mondiale e del Fondo Monetario Internazionale, in programma a Washington dal 18 al 24 aprile.

Di seguito le pagine iniziali del Rapporto.

“OXFAM MEDIA BRIEFING.

12 APRIL 2022 (www.oxfam.org)

 FIRST CRISIS, THEN CATASTROPHE”

Unless G20 leaders, the IMF and the World Bank act immediately, crises of inflation, inequality and COVID-19 could push over a quarter of a billion more people into extreme poverty in 2022.

Summary.

The crises of extreme inequality, unprecedented food and energy price inflation accelerated by the war in Ukraine and COVID-19 are converging to create a catastrophe for the world’s poorest people.

New Oxfam estimates, building on World Bank projections and prior research conducted by the World Bank and Center for Global Development on food price spikes, show that over a quarter of a billion more people could be pushed into extreme poverty in 2022. The combined impact of COVID-19, inequality and food price hikes could result in 263 million more people living in extreme poverty this year, resulting in a total of 860 million people living below the $1.90 a day extreme poverty line. This would be an extraordinarily damaging rise that reverses decades of progress in the fight against poverty.

These multiple crises are hitting an already deeply unequal world, which is being torn apart further by the COVID-19 pandemic. Already, 3.3 billion people are projected to be living below the poverty line of $5.50 a day in 2022, approaching half of humanity.

Now ordinary people, so many of whom have suffered major economic hardship during the pandemic, are facing rapid rises in the cost of food, which have reached an all-time high, surpassing the food spike crisis of 2011. Meanwhile billionaire wealth has seen its biggest increase ever. Large corporations appear to be exploiting an inflationary environment to boost profits at consumers’ expense: soaring energy prices and margins have pushed oil company profits to record levels, while investors expect agriculture companies to rapidly become more profitable as food prices spiral. Moreover, low-income countries – their foreign reserves largely depleted by their COVID-19 responses and debt servicing – are dependent on a handful of grain exporting nations. The fragility and inequality of global food and energy systems is being profoundly exposed. It is alarming to see inflation becoming wildly unstable and rising faster than real wages. Today the purchasing power of wages has been depressed the world over, with major concerns that inflation in 2022 will far outstrip wage growth, resulting in a real-term pay cut. Millions of families now face impossible choices: between feeding their children, sending them to school, or treating sickness for example. The spike in food prices is also harshly conspiring with climate-driven disasters and conflict, all severely exacerbating already existing and devastating hunger crises in parts of East Africa, the Middle East and West Africa.

This crisis is far from equal. All people are impacted in some way but it is the poorest who are being hit hardest. The IMF estimates that food costs account for 40% of consumer spending in Sub-Saharan Africa, more than double what it does in advanced economies10. But even within these advanced economies there is deep inequality: the poorest 20% in those societies are spending four times more than the top 20% on food, as in the case of the US. The long-term impacts of lack of nutrition risk permanently worsening the lives of the poorest. It is a crisis disproportionately felt by women and girls – the last to eat, the first to be excluded from a school that can’t be afforded, and whose unpaid care work is as ever the shock absorber of crisis.

And, just as poorer people are facing the brunt of this multi-pronged crisis, poorer nations that were already facing fiscal pressures are, too, now being pushed hard into deeper and lasting poverty. Developing countries, already facing historically high debt levels have been crippled by the cost of responding to the pandemic and its recession. This has been notably driven in part by extreme vaccine inequality, as rich nations have hoarded the vaccine while denying developing countries the rights to produce it themselves.

Debt servicing for all the world’s poorest countries is estimated at $43 billion in 2022 –equivalent to nearly half their food import bills and public spending on health care combined. In 2021, debt represented 171% of all spending on healthcare, education and social protection combined for low-income countries. The international financial institutions have lent money; the G20 offered a partial bilateral debt payment suspension; and the IMF made a belated issuance of $650 billion dollars in SDRs – all of this went a small way in helping to mitigate the harsh economic impact of the pandemic, but it has been far from enough.

The dramatic return of inflation, which has led the US Federal Reserve to raise the cost of borrowing, just as the war in Ukraine drove up the cost of the dollar, is a recipe for financial turmoil in lower-income countries who need dollars for their energy, medicine and food imports, and whose debt currency is largely in dollars. Several developing countries are likely to default on their debts in coming months, and will try to stave off bankruptcy as they try to maintain vital imports. This could mean drastic cuts to spending worldwide, exacerbating an already dangerous path towards austerity that countries were beginning to take with the IMF’s backing. Some of the most effective tools at reducing inequality – public goods such as universal healthcare, education and social protection–risk being cut, which would disproportionately impact poorer people, women and racialized groups. UNCTAD has warned that policy tightening in rich countries driven by inflation and the war in Ukraine is likely to lead to sudden currency depreciation in many developing countries leading to recession and insolvency.

While the COVID-19 pandemic pushed people and countries into economic crisis worldwide, the compounding effects of the Ukraine crisis mean we risk now heading towards catastrophe. But this can be averted through bold and coordinated international and national action.

An urgent economic rescue plan is required. A plan that must right the wrongs of rich nations’ COVID-19 response so far, and prevent a catastrophe of unprecedented poverty and widespread suffering in its wake. The greatest responsibility rests upon the leaders of the richest nations who will come together at the G20, the IMF and World Bank, in Washington DC this month. Oxfam urges the leaders of the G20, IMF and World Bank, together with all leaders, to:

1.Protect the poorest people from the harms of inflation.

Meeting the extraordinary demands of the time, governments should seek to control food and energy prices directly – including through permanent cuts in value-added taxes (VAT) and sales taxes on staple food products, with the IMF ensuring it is advising this and refraining from seeking governments to expand VAT; the provision of limited and/or temporary carefully-designed subsidies on staple food products such as through increases in school feeding programs; avoiding export bans and reining in markets including by increasing transparency and preventing excessive financial speculation. This must be accompanied by a range of measures that include expanding cash transfers to provide income support, and the vital automatic indexation of cash transfers and wages on inflation at short intervals. Moreover, the call for a Global Fund for Social Protection is more urgent than ever for low-income countries.

2.Cancel unpayable debts to poorer countries.

The two main initiatives driven by the international community – the Debt Service Suspension Initiative (DSSI) and the Common Framework – have proven largely ineffective. The G20 must prioritize the debt agenda and cancel all debt payments in 2022 and 2023 for all low and lower-middle-income countries that require it; immediately suspend debt service for countries applying to the Common Framework and establish a new debt relief process which addresses its failures, particularly ensuring private sector participation. Recognizing that multilateral institutions account for around one-third of outstanding debt of low- and lower-middle-income countries, the World Bank and IMF must participate in such efforts. They should both cancel debt payments owed, and the IMF should eliminate surcharges. 

3.Taxing wealth.

Governments must fund vital support to people to protect them from rising energy and food costs, as well as to fund the COVID-19 response and a fair recovery. They must tax progressively, investing in universal public goods, and reject austerity. Oxfam urges the implementation of emergency solidarity taxes or one-off wealth taxes, or temporary increases in capital gains taxes or personal income taxes on high incomes, building on the proposals of the OECD and IMF, and learning from the recent successful example of Argentina. Crucially, permanent taxation of wealth is required to more fundamentally, redistribute resources and reduce inequality. A progressive net wealth tax of just 2% on personal wealth above $5 million, rising to 3% for wealth above $50 million and 5% for wealth above $1 billion could generate $2.52 trillion worldwide, would raise enough to lift 2.3 billion people out of poverty, make enough COVID-19. The IMF must support countries to build fiscal space in a progressive way, and refrain from advising or conditioning austerity measures which would only worsen poverty and inequality.

Now is crucially the time to uncover hidden wealth: including through a global asset registry to disclose the true owners of assets such as property, stocks, companies, trusts and other assets. And, recognizing that the OECD and EU have proposed that governments impose windfall taxes on the energy companies making record profits from sky-rocketing energy prices to support people that face rising energy bills, Oxfam urges the implementation of ambitious excess profit taxes on the windfall profits of corporations across all industries, as was done in the wake of World War II.

4. Reallocate and re-issue Special Drawing Rights

While the $650 billion-worth of Special Drawing Rights (SDR) issued in August 2021 was a breakthrough, it was distributed according to quotas, not needs, in line with IMF rules. Despite G20 promises to reallocate $100 billion of their SDRs to lower-income countries, seven months later only $36 billion has been pledged. Rich countries must reallocate at least 25% of their SDRs to developing countries in a way that is debt and conditionality-free. The IMF must ensure that its new Resilience and Sustainability Trust (RST) set up to channel SDRs avoids conditionality and is as concessional as possible. And – recognizing that the $650 billion SDR allocation fell short of the $3 trillion that Oxfam and others called for in 2020 – discussions must begin on a new general allocation of SDRs to meet this crisis in 2022.

5.Increase life-saving emergency aid to poorer countries.

Building on their existing aid commitments, rich country donors must provide immediate emergency support to lower-income countries. Only 3% of funds have been given to the UN’s emergency appeal to relieve the hunger crisis in East Africa, while donors have also fallen short in meeting their estimated fair share of aid in response to COVID-19 of nearly $300 billion.

Meeting needs in Ukraine is vital, and this must be additional to existing aid budgets. Moreover, donors should not count their contributions to other donor countries, for example for refugee support, as aid, thereby displacing funds that are badly needed to respond to challenges elsewhere.

Multiple crises have converged in 2022 and they risk taking the world towards catastrophe that is unprecedented in living memory. This will be felt most by the billions of people worldwide living on the breadline, one pay-check away from penury. These are the taxi drivers, the security guards, the nurses, the teachers. They are the cooks, the cleaners, the factory workers, the gig 4 workers. They have no savings, and work for poverty wages. They live in rich and poorer countries.

But this is not inevitable. During this COVID-19 crisis we have seen governments able to mobilize the money, and at times, the imagination necessary to ward off the harshest impacts facing their populations. We also, at first, saw the solidarity required between nations, only to be undermined by myopic nationalism that created vaccine apartheid and divided the world apart.

The G20, IMF and World Bank all meet in the next two weeks. Sticking to the status quo is not without consequence – it will result in harm to people the world over. Amid exceptionally challenging political circumstances, it is urgent that leaders take responsibility to advance action that averts catastrophe for billions of people. And in doing so, they have the chance to show we can rewrite the rules of our economy so that everyone, including the richest countries, richest people and corporations, play their part and pay their fair share of taxes; so that governments have the needed fiscal space and are not servicing their debts at the expense of delivering strong universal public services required to protect their populations at all times but especially in times of crisis; so that decent work exists for all; and so we get on track to stop climate breakdown in the few years that we have left. That is the job of creating a more equal world and that job must begin now.”.