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The global challenge of inequality
by Save the Children, agencies
 
Leaders at Davos must address the critical issues the world face – Call from civil society leaders. (Save the Children, agencies)
 
As representatives of civil society organisations attending the World Economic Forum, we are writing to urge you to ensure that the following issues of critical global importance are central to discussions at the forum and that, as per its stated purpose, the forum helps to deliver the insights, initiatives and actions necessary to respond to them.
 
1. Securing a safer world: As the forum takes place thousands of innocent people in Syria, including many children, continue to die. As vital peace talks kick off in Geneva, the crisis in Syria emphasises why we must work together to guarantee both immediate humanitarian access and aid, as well as secure long-term solutions to end crises – especially in Syria, South Sudan, the Central African Republic and Afghanistan - and find ways to prevent future outbreaks of conflict and violence.
 
2. Picking up the pace on development and setting ambitious goals for the future: In 2000, the world agreed the Millennium Development Goals with the aim of reducing extreme poverty by 2015. We have witnessed significant progress, but, with less than 800 days to go to the 2015 deadline many goals are off track. Failure to achieve the goals translates into children and women dying from preventable causes and in childbirth, and millions of people living in poverty without enough food or water. We need the leaders at Davos to get behind efforts to finish the job on the MDGs and engage fully in discussions around the next set of development goals in order to help eradicate extreme poverty for good.
 
3. Tackling inequality: In this changing world, rising inequality is a potent challenge. The top 5% of the world’s population is understood to have over 37% of global income, whilst the bottom 5% has less than 0.2%. As the IMF and the World Economic Forum itself have highlighted inequality is a fundamental obstacle to sustained economic growth. Leaders at Davos must recognise the importance of addressing inequality and ensure it is at the heart of future development efforts.
 
4. Creating a liveable climate for all: We cannot eradicate poverty without addressing climate change, which is hitting the poorest and most vulnerable the hardest. 2014 will be a crucial year to mobilize action ahead of global climate negotiations in 2015. Leaders at Davos should be clear in their commitment to ensuring a bold climate deal is delivered. The private sector leaders at Davos have a particularly critical role to play in leading the way to a low-carbon, climate-change resilient future. The new climate partnerships expected to be launched at Davos must also drive action at scale and have governments at their heart.
 
5. Investing in young people’s potential: Young people are shaping our world but they need support to ensure they have the education, training and opportunities to do so and a safe environment to thrive in. The Forum is an opportunity for leaders to identify new ways of working together to create the jobs and opportunities needed and help deliver a world where every young person is protected from violence, gender discrimination and the absence of opportunity.
 
To deliver all the above, we need responsible government, responsible business and new ideas where old ones have failed.
 
(Fazle Hasan Abed, Founder and Chairperson, BRAC, BRAC International and BRAC University; Mohamed Ashmawey, CEO, Islamic Relief Worldwide; Winnie Byanyima, Executive Director Oxfam International; Nigel Chapman, Chief Executive Officer, Plan International; Kumi Naidoo, Executive Director, Greenpeace International; Dhananjayan Sriskandarajah, Secretary-General, Civicus: World Alliance for Citizen Participation; Jasmine Whitbread, CEO, Save the Children International)
 
http://www.savethechildren.net/news
 
The global challenge of inequality, by Antonio Walker, Manuel Muniz.
 
Of the many challenges the world faces to stability and good governance, that which has received the least attention up until now is that of ever widening income disparities.
 
It’s a problem that used to belong to the realm of development economics, but is now so widespread and of such a scale that it has become a concern in terms of political stability. Increases in inequality have been so great that it is time to acknowledge there is a societal pandemic on a global scale. Until we do so, we won’t be able to tailor a global response.
 
The World Economic Forum’s “Outlook on the Global Agenda 2014” suggests that widening income disparities will, in the coming 12 to 18 months, be the greatest source of instability in the world, second only to tensions in the Middle East and North Africa. The reason inequality is so disruptive is that it is leading lower and middle classes around the world to mistrust the economic systems under which they live, and therefore, to demand radical change. This shouldn’t be at all surprising.
 
A recent Oxfam report called “Working for the Few” highlighted such shocking statistics as the fact that 1% of the world’s population owns almost half its wealth, and that the 85 richest individuals in the world have as much wealth as the bottom 50% of the global population.
 
Many people still talk of a North-South or East-West wealth divide. Although differences in income tend to be greater across borders than within them, with inequality greatest between developed and developing nations, it is also the case that most developed states have in recent decades seen a marked worsening of domestic inequalities. This is true of most of Europe, and especially in the United States, where inequality is now at a level not seen since the late 1920s and the onset of the Great Depression.
 
The financial crisis has accentuated this trend, as since 2009, some 95% of the wealth generated in the U.S. has gone to the top 1%. In 2011, that small group owned 40% of America’s total wealth and earned almost a quarter of the country’s aggregate annual income. It seems hard to argue that this isn’t a case of systemic exploitation of national wealth by a tiny elite.
 
There are many reasons to question the appropriateness of so much wealth being concentrated in the hands of so few. First and foremost, there is the obvious one that after an individual reaches a certain level of income, there is little increase in life expectancy or personal happiness.
 
It seems right, therefore, to question the wisdom of philosophies (and policies) that call for such an accumulation of wealth in the hands of a few and the need for a more balanced distribution within society.
 
There is growing evidence that inequality is tightly linked to falling levels of trust in social structures, as well as to increasing levels of violence and criminality, and to falling rates of social mobility. This last point is perhaps the most significant because the accumulation of wealth in the hands of a few has enabled to them to systematically capture the social and political levers of power, resulting ultimately in the erosion of one of liberal democracy’s central principles: equal opportunity.
 
Data on the family background of those elected to public office, or those who gain admission to some of the world’s best universities corroborates that the scions of the wealthy tend to be over-represented on the social ladder and the places it takes you to. These are particularly worrisome trends in the case of Europe because equality of opportunity and rewards based on merit are two of the most important elements in what could be described as the European social compact.
 
Of the many possible causes of this pathology, ranging from those of personal philosophy to education to the nature of capitalism, we believe the most significant is globalisation and the way it has limited the power of states.
 
In an environment where the wealthy can move resources across borders and avoid accountability and taxation, governments are left with little leverage on the distribution of wealth within their societies.
 
States’ powers are today most effective when implementing redistributive policies that chiefly affect the lower and middle classes who tend to live off fully-declared and, therefore, easily taxable salaries.
 
The top 1% are able to establish tax residence in Luxembourg or one of the Gulf States and so avoid almost all income tax. They can also construct complicated legal structures that avoid or minimise corporate taxation.
 
In other instances, and regularly using the effective threat of outsourcing, they have managed to lobby their governments into establishing regressive tax systems.
 
The overall effect has been the creation of a global elite capable of avoiding its fair contribution to common affairs, and able therefore to direct resources into perpetuating its position of privilege.
 
This is a problem that can only be tackled globally, and through the increase of international governance. Recent discussions by the G8 and the G20 to crack down on corporate tax avoidance are only the tip of the iceberg in terms of what is needed.
 
A determined push to shut down all tax havens, a marked convergence of real corporate tax rates around the world, and a concerted international effort to share information and decrease tax fraud are among the measures that should be tabled without delay.
 
States that profit from current arrangements should be put under heavy pressure to comply. A supranational actor like the EU, born as it was out of the desire (or need) to better manage cross-border interdependence, should play a prominent role in tackling this challenge.
 
Only through effective traction on these matters can we hope to give governments the ability to tackle inequality and guarantee equality of opportunity within their own borders. The current state of affairs, with a clear lack of governance on global taxation, is playing to the hand of the wealthy and enabling the few to profit from the many.
 
http://inequalitywatch.eu/


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WFP and UNHCR struggling to raise funds for humanitarian emergencies that don’t make the headlines?
by Francisco Toro
Guardian Development Network
 
It’s been called “disaster overload” – major crises in Syria, Iraq, South Sudan, the Central African Republic (CAR) and the Philippines have left the United Nations’ humanitarian response system reeling. But as media attention gravitates toward the major crises, there’s been little thought to the long tail of the humanitarian system.
 
Chad, one of the poorest countries in Africa, is now facing two separate refugee crises: a long-running crisis in the east, where refugees from Darfur began arriving more than ten years ago and arrivals from the conflict-torn CAR in the south. Worse, instability in CAR has cut off the main logistics corridor used to bring assistance to the country. “Chad is landlocked, all resources must come through Cameroon, which makes everything more expensive,” explains Aminata Gueye, the UN High Commission for Refugees (UNHCR)’s representative in Chad. The agency is struggling to cope, having raised just 25% of its needs for 2014.
 
The World Food Programme (WFP) has done slightly better, raising 30.9% of funds needed for its Chad operation. Yet sharply rising transport cuts have forced the agency to severely cut back on food distributed to refugees, with the standard ration now standing at a mere 850 calories per person per day. “The current ration level is very low,” says Caroline Wilkinson, a nutritionist at UNHCR working on Chad. “For the children it’s probably ok, but for a working adult it’s an extreme value of caloric intake.”
 
And it isn’t just Chad. From Mauritania to Somalia, food insecurity is chronic and widespread. Fundraising in the region appears particularly problematic. According to the Office for the Coordination of Humanitarian Affairs (Ocha), in Mali, just 37% of the $568m needed for humanitarian operations in 2014 has been funded. In Burkina Faso, 34%, in Somalia, where famine looms, it’s 32%. And a $1bn protracted WFP operation in Niger has attracted just 11% of the funds needed.
 
Given a funding architecture where the bulk of humanitarian donations are earmarked for use in a specific emergency, second-tier crises like the one in South Sudan face major obstacles to fundraising and third-tier crises like those in Chad often don’t get any direct funding. “We have plenty of operations that attract no earmarked funds at all,” says Alex Mundt, senior donor relations officer for the UNHCR. In those cases, the agency allocates non-earmarked contributions, typically from private donors, or “loosely earmarked” funds from donor governments directed at a broad region, rather than a specific place or activity. For the WFP, just 11% of donations come with no strings attached.
 
In parts of the voluntary sector, unrestricted donations are common. John Longhurst, director of communications at Canadian Foodgrains Bank says: “We’re fortunate to have a church-based support network that is used to just sending money each year for use where it’s needed most.” That flexibility helps the charity to send funds to places that aren’t making headlines, says Longhurst, although he admits that “it always helps if there’s more information about these kinds of crisis on the news”.
 
It’s no great mystery who wins out in the scramble for that precious media attention: major, sudden disasters in countries that have large diasporas, like the Philippines, or dramatic conflicts in strategically significant places, like Gaza. It’s easy to lose sight of the fact that most humanitarian relief operations are nothing like that. The typical UNHCR or WFP operation comes in response to a situation that develops slowly or drags on for decades: things that, virtually by definition, aren’t news. The chronic hunger that has resulted from conflict and land degradation in Uganda’s Karamoja region or living conditions in western Algeria’s now five-decade old refugee camps can hardly compete for an editor’s attention with the drama of war in Syria.
 
While global humanitarian spending is rising, demand for humanitarian services is rising faster. Yet some question whether it is true that more demands are being placed on a static pot of money. The alternative interpretation is that the high-profile crises raise the profile of the humanitarian enterprise in general, helping grow the pot. “With these high-profile crises, humanitarians are being given a seat at the table in policy discussions,” UNHCR’s Mundt says. “As the needs have grown, policymakers see that they have an obligation.”
 
In the meantime, the rush of crises is amplifying the need for unearmarked funding. Loosening earmarks or forgoing them altogether is recognised as one of the principles of good humanitarian donorship, a voluntary framework that, in principle, all major donors adhere to. Yet, less than 1% of the US’s standard contribution to the WFP is unearmarked, for instance, as opposed to more than 80% of Sweden’s. This needs to change, but bureaucratic inertia is a major obstacle to improved response to these invisible crises.
 
http://www.theguardian.com/global-development-professionals-network/2014/sep/12/chad-hunger-malnutrition-humanitarian-crises


 

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