Brazil World Cup
Income inequality is at the heart of the protests currently raging across several Brazilian cities. Originally, the protests were about the twenty-cent price hike for bus fare. Eventually, however, they turned into protests about everything that’s wrong in Brazil.

Next year’s World Cup has added to the public dissent. Brazil’s rampant political corruption has resulted in huge expenditures. The government has spent twice the amount as Germany and South Africa spent on the World Cup.

It is predicted that FIFA will make over one billion dollars from the tournament, but Brazil will benefit very little. Originally, it was presumed that the Cup would be paid for by private investors and corporations, and that the public funds would go toward bettering the existing infrastructure. But then the Brazilian government lent money to build brand-new stadiums. Essentially, the government is spending billions of dollars on a private event that is so expensive that only the rich can attend.

It has become a bit of a paradox — a country that is a symbol of soccer to many has turned against the sport’s largest event. The huge public expenditure has left the people wondering: why can the country invest millions on a soccer tournament but can’t seem to find funds to fix the broken healthcare and education systems?

The independent protestors have balked at any specific political party that has tried to claim leadership in the demonstrations, preferring instead to remain a party-free dissident entity. Even the large Workers Party was shooed away.

The impact of the country-wide protests have already been felt. President Dilma Roussef went on TV and invited protestors into the head of the government to talk about what’s going on. She met with the Movimento Passe Livre, the university free fare group that started the protests, and ultimately ceded the twenty cent transport fare increase.

While the positive impacts have been felt, it is doubtful that any more progress will be made on the issue. With so little political cohesiveness within the demonstrators themselves, it appears that the dissidence will continue into the foreseeable future.

– Kathryn Cassibry

Sources: Fair Observer, The Guardian

The gap between rich and poor is widening. It takes money to make money, and so inequality is becoming exacerbated as the rich get richer.

Rising inequality has impeded efforts to eliminate global poverty. With a greater share of wealth being captured by those in the highest income bracket, the amount reaching the lowest is continually decreasing. Two nations with equivalent GDP growth rates could have drastically different levels of poverty depending on income equality. For example, in India, the net worth of 46 billionaires is $176 billion. This number represents 12% of the GDP of India, as opposed to 1% fifteen years ago. Half of that amount would be enough to eliminate absolute poverty in India.

The irony of this unchecked growth of the upper classes is that eventually it can result in a restriction of growth. Extreme inequality slows the development of markets and limits investment opportunities for the poor. Inequality also diminishes the political power of the poor. This skewing of power can reduce government efficiency and allow for tax evasion by the wealthy, limiting the government’s ability to invest in necessary infrastructure to sustain growth.

If we’re to see success in the fight against global poverty, then rising equality must be allowed to play its part.

– David Wilson

Source: The Guardian
Photo: Global Post

Israel Has the Highest Poverty Rate in the Developed World
A study by the Organization for Economic Cooperation and Development (OECD) reported that out of 34 developed countries, Israel has the highest poverty rate. The newspaper disclosed that 20.9% of Israeli citizens are currently living in poverty. In addition to staggeringly high numbers of impoverished people, Israel also has one of the largest inequality gaps in the developed world.

The OECD speculates that these struggling economic times have greatly contributed an increase in poverty rates as well as a greater gap between the rich and poor. The organization notes that the inequality gap grew more in the past three years than in the twelve years before then.

As expressed in OECD’s report, “With higher unemployment and lower returns from capital, the crisis not only weighted heavily on incomes from work and capital but also made their distribution more unequal.” There are only a few other countries that are rated higher than Israel in income inequality: Chile, Mexico, Turkey, and the United States.

Israeli Prime Minister Benjamin Netanyahu has recently been under scrutiny over his prodigal spending habits with taxpayer money. Among his expenses have been an 80% pay raise for himself and a $127,000 cabin for a trip to London. The struggling Israeli population heavily criticized his actions. The Prime Minister also plans to cut funding for benefits and child allowance, which is likely to put even more families below the poverty line.

Israel is among those developed countries that are particularly struggling with a massive inequality gap. The Israeli government must step in and create policies that will bring these people out poverty and shorten the gap between the rich and poor.

– Mary Penn

Source: Huffington Post
Photo: Christoin

The 100 Richest People In the World Could End Global Poverty
It would cost $30 billion annually to end global poverty. This would mean that billions of people would no longer suffer from malnutrition, food insecurity, unsanitary conditions, preventable disease, and lack of education. A new study by Oxfam shows that the world’s 100 richest people earned $240 billion in 2012, enough to end global poverty four times.

While a majority of businesses and individuals were financially hurt by the economic crisis, the wealthiest have benefited from it. Oxfam reported that “The richest 1 percent has increased its income by 60 percent in the last 20 years with the financial crisis accelerating rather than slowing the process,” thus contributing to the growing gap between the rich and poor of the world.

It can be difficult to fathom how the richest 100 people can earn hundreds of billions of dollars in a year while billions of people can live on less than $1.25 a day. Oxfam’s report, “The Cost of Inequality: How Wealth and Income Extremes Hurt us All,” suggests that having so few people controlling such a large amount of the world’s wealth makes it more difficult to end global poverty. The philanthropic organization urges world leaders to address this alarming financial inequality by ending extreme wealth by 2025.

In order to return to 1990’s inequality levels, Oxfam suggests that world leaders get rid of tax havens and regressive taxes, implement a “global minimum corporation tax rate,” increase wages in proportion to corporate earnings, and “increase investment in free public services.” These extreme inequality gaps are spreading to countries like China, the United Kingdom, South Africa, and the United States. Oxfam states that inequality levels in South Africa are worst now than during the end of apartheid.

Jeremy Hobbs, Executive Director of Oxfam International, is adamant that the study shows the idiocy behind trickle down economics. He says, “We can no longer pretend that the creation of wealth for a few will inevitably benefit the many – too often the reverse is true.” He also stresses how when the wealthy control politics, they will often employ policies that only benefit the rich. World financial leaders are meeting April 3rd to discuss these issues and how to overall improve the global economy.

– Mary Penn

Source: SCMP
Photo: Global Giving