Oxfam, DFI urge countries to do more to tackle inequality

A woman prepares groundnuts outside her home in a neighbourhood in Harar, Ethiopia, on July 22, 2018.
A woman prepares groundnuts outside her home in a neighbourhood in Harar, Ethiopia, on July 22, 2018.PHOTO: REUTERS

SINGAPORE - South Korea, Ethiopia and Indonesia are among the countries that have done the most in the past year to tackle inequality, while Nigeria, Brazil and the United States have fallen behind, a new report says.

The Commitment to Reducing Inequality (CRI) Index, compiled by developmental charity Oxfam and non-profit research group Development Finance International (DFI), ranks 157 governments across the world based on the extent to which they are tackling the growing gap between rich and poor in three key policy areas - social spending on public services such as education and health, progressive taxation and labour rights.

Oxfam and DFI said in the report, released on Tuesday (Oct 9), that inequality is a growing crisis that is undermining social and economic progress and the fight against poverty.

Denmark topped the index, followed by Germany and Finland.

Japan, the top-ranking Asian country, came in 11th.

The report lauded President Moon Jae-in of South Korea, which came in 56th overall, for showing commitment to tackling inequality in the country in the past year by raising tax on the richest earners, boosting spending for the poor and dramatically raising the minimum wage.

It also cited other countries that have made taken strong steps to tackle inequality in the past year.

Ethiopia, although at 131st place, now has the sixth highest level of education spending in the world. Chile, at 35th, increased its rate of corporation tax and Indonesia, at 90th, has increased its minimum wage and its spending on health, the report noted.

"These positive actions shame those governments that are failing their people," it added.

"Nigeria remains at the bottom of the CRI Index, failing the poorest people, despite its president claiming to care about inequality. Hungary has halved its corporation tax rate, and violations of labour rights have increased."

Nigeria is ranked 157th while Hungary is 29th.

It added that in Brazil, which ranked 39th, social spending has been frozen for 20 years. The report also noted that United States President Donald Trump has slashed corporation tax in the US - which took 23rd place - in what it called "one of the biggest giveaways to the 1 per cent in history".

Singapore came in 149th place - among the bottom 10 countries.

One reason, for this, Oxfam and DFI said, is because Singapore has what it called a number of "harmful tax practices". It cited among them corporate tax incentives for intellectual property development, the maritime sector, financial sector and global trading.

The report claimed such incentives "enable tax dodging" and affect the ability of other countries to collect corporate taxes.

The Singapore Government has previously maintained that the Republic's tax policies are designed to support substantive economic activities in order to create skilled jobs and build new and enduring capabilities in Singapore, and that it does not condone any tax evasion activities by corporations or wealthy individuals.

Oxfam and DFI added that although the Republic increased its personal income tax rate for top earners by 2 percentage points, the new maximum rate of 22 per cent remains very low.

Among other things, the report also chided Singapore for not having equal pay or non-discrimination laws for women. It said the Republic's laws on both rape and sexual harassment are inadequate, and noted that there is no minimum wage, except for cleaners and security guards.

The report recommended that all countries should develop national inequality action plans, which should be funded by increasing progressive taxation and clamping down on exemptions and tax dodging.

"Countries must also respect union rights and make women's rights at work comprehensive, and they should raise minimum wages to living wages."