{"id":209773,"date":"2022-04-25T12:00:22","date_gmt":"2022-04-25T11:00:22","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=209773"},"modified":"2025-01-10T15:06:45","modified_gmt":"2025-01-10T15:06:45","slug":"oxfam-report-poorer-countries-going-from-crisis-to-catastrophe","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2022\/04\/oxfam-report-poorer-countries-going-from-crisis-to-catastrophe\/","title":{"rendered":"Oxfam Report: Poorer Countries Going from Crisis to Catastrophe"},"content":{"rendered":"
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19 Apr 2022 – <\/em>In the lead up to the semi-annual meetings of the International Monetary Fund (IMF) and the World Bank being held in Washington this week, the global aid agency Oxfam has produced a report detailing the horrendous impact of rising inflation, coming on top of the devastating effects of the COVID-19 pandemic, for almost half the world\u2019s population.<\/p>\n

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Cover page of April 2022 Oxfam Report<\/p><\/div>\n

It said the crises of extreme inequality and massive food and energy inflation, accelerated by the war in Ukraine and COVID-19, are converging to create a catastrophe for the world\u2019s poorest people \u201cthat is unprecedented in living memory.\u201d<\/p>\n

The report, entitled \u201cFirst Crisis, Then Catastrophe,\u201d estimated that at least a quarter of a billion more people could be pushed into extreme poverty, defined as receiving below $1.90 per day, bringing the total to 860 million.<\/p>\n

The number of people estimated to be living below the poverty line of $5.50 per day is already 3.3 billion, almost half the world\u2019s population.<\/p>\n

It noted that at the same time, billionaire wealth \u201chas seen its biggest increase ever\u201d with more accumulation at the top to come.<\/p>\n

\u201cLarge corporations appear to be exploiting an inflationary environment to boost profits at consumers\u2019 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,\u201d Oxfam stated.<\/p>\n

Inflation is rising rapidly and will far outstrip wages growth this year.<\/p>\n

Poorer countries are being bled white by the international banks, multilateral lending institutions, including the IMF, and investment houses.<\/p>\n

According to the report, debt servicing for all the world\u2019s poorer countries is estimated at $43 billion for this year, equivalent to nearly half their spending on food import bills, healthcare, education and social protection combined.<\/p>\n

The situation is even worse for the lowest income countries. In 2021 the amount spent on debt servicing and repayments was 171 percent of their combined spending on healthcare, education and social protection.<\/p>\n

The report made clear that the very limited measures initiated at the start of the pandemic, supposedly to lessen the debt burden, the Debt Service Suspension Initiative and the Common Framework introduced by the G20, \u201chave proven largely ineffective.\u201d<\/p>\n

Likewise, the much-trumpeted decision by the IMF to make available $650 billion of additional Special Drawing Rights (SDRs) in August, which provides for greater access to foreign currencies without conditions being attached. The additional SDRs were not allocated in accordance with need but in line with IMF quotas which meant richer countries were the chief beneficiaries.<\/p>\n

There were pledges by the G20 to reallocate some $100 billion but so far only $36 billion has been provided.<\/p>\n

The financial situation confronting poorer and highly indebted countries is only going to worsen in the coming period because of the moves by the world\u2019s major central banks, led by the US Federal Reserve, to hike interest rates amid soaring inflation.<\/p>\n

This is a recipe for financial turmoil in lower income countries that need dollars to pay for their energy, food and medical imports.<\/p>\n

The report warned, \u201cSeveral 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 IMF backing.\u201d<\/p>\n

According to Oxfam representatives, whereas in 2020 the IMF had urged countries to spend money to combat the effects of the pandemic, without imposing the conditionalities that had been tied to loans in the past\u2014measures such as cuts in social spending and privatisation of government-owned entities\u2014these conditionalities were now returning in a large majority of loans and debt restructuring agreements.<\/p>\n

The IMF is laying down such conditions as representatives of the government of Sri Lanka, one of the countries at the centre of the debt crisis, meet with its officials in Washington this week.<\/p>\n

The Oxfam report provided figures showing there is more than enough money to deal with the crisis.<\/p>\n

\u201cA progressive wealth tax of just 2 percent on personal wealth above $5 million, rising to 3 percent for above $50 million and 5 percent for wealth above $1 billion could generate $2.52 trillion worldwide,\u201d it said.<\/p>\n

That amount of money would be \u201cenough to lift 2.3 billion people out of poverty, make enough COVID-19 vaccines for the world, and deliver universal healthcare and social protection for everyone living in low- and lower middle-income countries\u201d with a combined population of 3.6 billion.<\/p>\n