Richest 85 boast same wealth as half the world

SMH, Gareth Hutchens, January 21, 2014

Illustration: Cathy Wilcox

Eighty-five people control the same amount of wealth as half the world's population.

That is 85 people compared with 3.5 billion.

A new report from Oxfam has been published in time for the World Economic Forum in Davos this week.

It shows the world's ultra-wealthy have not only recovered from the global financial crisis, they have positively blossomed.

The report shows the wealth of the 1 per cent richest people in the world is worth about $US110 trillion, 65 times the total wealth of the bottom half of the world's population.

It also shows the world's richest 85 people control about $US1.7 trillion in wealth, equivalent to the bottom half of the world's population.

And far from hindering the wealthy, the political response to the global financial crisis - including the actions of central banks and the austerity measures introduced by national governments - has made the rich fabulously richer.

In the US, the wealthiest 1 per cent of the population grabbed 95 per cent of post-financial crisis growth between 2009 and 2012, while the bottom 90 per cent became poorer.

But an Oxfam survey of six countries - the United States, UK, Spain, Brazil, India and South Africa - has found that the majority of people believe laws and regulations are skewed in favour of the rich, so people are noticing.

It has called on the world's powerful meeting in Davos to try to stem the tide of rising inequality.

It says seven out of 10 people live in countries where economic inequality has increased in 30 years.

''Given the scale of rising wealth concentrations, opportunity capture and unequal political representation are a serious and worrying trend,'' the report says.

''This massive concentration of economic resources in the hands of fewer people presents a significant threat to inclusive political and economic systems.''

Economists say the rise in global inequality is not surprising.

The US Federal Reserve's multibillion-dollar bond-buying program was singled out as a major driver of the increase in wealth inequality.

"The distribution of wealth has been widening, both before and after the financial crisis,'' Bank of America chief economist Saul Eslake said.

''And although I don't criticise the policies on these grounds, I think it's fairly apparent that the policies that are being pursued, particularly by central banks, in an attempt to revive major advanced economies after the financial crisis, have probably contributed to widening the distribution of wealth.''

Frank Stilwell, Emeritus Professor at Sydney University, said he was not surprised there was inequality of that magnitude, but he wondered if Davos would be the forum to address it.

''It should be a matter of public concern, within and between nations, because this concentration among the ultra-wealthy I think is pretty well documented within countries,'' Professor Stilwell said.

''The bigger question is if the World Economic Forum and its member participants can do anything about these trends is another matter.''

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