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Wealth gap is global threat, report warns

By Agence France-Presse in Paris | China Daily | Updated: 2014-01-22 08:20

The world's elite have rigged laws in their own favor undermining democracy and creating a chasm of inequality across the globe, charity Oxfam said in advance of the annual get-together of the world's most powerful at Davos, Switzerland.

Inequality has run so out of control that the 85 richest people on the planet "own the wealth of half the world's population", Oxfam said in an introduction to a new report on widening disparities between the rich and poor.

The report exposes the "pernicious impact" of growing inequality that helps "the richest undermine democratic processes and drive policies that promote their interests at the expense of everyone else", the statement said.

Inequality has recently emerged as a major concern in countries around the world, with US President Barack Obama prioritizing a push to narrow the wealth gap in his second term.

In Germany, the government seems set to adopt a minimum wage.

The World Economic Forum, which organizes the Davos talkfest, warned last week that the growing gulf between the rich and the poor represents the biggest global risk in 2014.

"The chronic gap between the incomes of the richest and poorest citizens is seen as the risk that is most likely to cause serious damage globally in the coming decade," the WEF said.

But many of the corporate giants and world leaders set to confer at Davos, a posh ski resort tucked in the eastern reaches of Switzerland near Liechtenstein, are implicitly identified by Oxfam.

"Policies successfully imposed by the rich in recent decades include financial deregulation, tax havens and secrecy, anti-competitive business practice, lower tax rates on high incomes and investments and cuts or underinvestment in public services for the majority," Oxfam said.

WEF however has decided to put the inequality theme up front during the five-day event with closed doors seminars and public key talks scheduled to mull over the hot-button issue.

In the forefront will be Australia's Prime Minister Tony Abbott.

Sydney has just taken on the G20 presidency, and in a speech on Thursday Abbot should tackle the wealth-gap issue, with the fight against tax havens and evasion clearly targeted.

In the report, Oxfam said that "since the late 1970s, tax rates for the richest have fallen in 29 of the 30 countries for which data are available, meaning that in many places the rich not only get more money but also pay less tax on it".

(China Daily 01/22/2014 page10)

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