42 trillion dollars. It is the figure that separates the super rich from the rest of the world. An economic abyss that has opened up over the past decade, as taxes paid by the global elite have fallen to historic lows. Now, the G20 in Brazil faces a titanic challenge: how to rebalance the scales of global wealth?
The treasure of modern dragons
Over the past decade, as many of us struggled with rising costs of living and stagnant wages, the richest 1% of the world's population has seen their assets grow by a head-spinning figure: 42 trillion dollars. To put this sum into perspective, it is 36 times greater than the wealth accumulated by the poorest half of the world's population in the same period.
Oxfam, the non-governmental organization that released this data, doesn't mince words. This concentration of wealth is not only impressive. It's dangerous.
The magic of tax evasion
If you think it's all about social envy, and that with great wealth comes great fiscal responsibility, prepare to be disappointed. According to Oxfam, billionaires globally they pay less than 0,5% of their wealth in taxes. It's as if they've found the magic formula to make their tax obligations disappear. An economic invisibility cloak, if you pass me the license.
In this scenario worthy of a dystopian film, the G20 enters the scene. The summit in Brazil, which represents 80% of global GDP, has put international cooperation to tax the super-rich at the top of the agenda. For the umpteenth time, world leaders show that they have finally woken up and want to face the dragon of inequality. Do we believe it?
Super rich, the battle of the finance ministers
Finance ministers meeting in Rio de Janeiro are trying to come up with strategies to raise taxes on billionaires and prevent them from evading tax systems. It’s not an easy task. It’s like trying to catch smoke with your hands. Countries such as France, Spain, South Africa, Colombia and the African Union support the initiative. The United States, on the other hand, maintains an oppositional position. It's a game of chess where some pieces refuse to move.
Oxfam's bold proposal – Oxfam doesn't just criticize. The organization proposes a bold solution: a net annual wealth tax of at least 8% for the super rich. It is a proposal that would not shake the wallets of billionaires, yet it almost seems like treason. Max Lawson, head of inequality policy at Oxfam International, asks a crucial question: will governments have the political will to set a global standard that privileges the many over the few?
The dark side of climate finance
But the story doesn't end here. Oxfam has also put the spotlight on another aspect of global inequality: climate finance. Rich nations say they provided nearly $116 billion in climate finance to developing countries in 2022. Sounds good, right? But no. Imagine the disappointment when Oxfam reveals that real support does not exceed $35 billion, with a significant portion in the form of loans (and at profitable rates). They promise a lifebuoy and instead they throw you an anchor that makes you sink even more.
Super rich, the broken promise of Copenhagen
Remember the UN climate conference in Copenhagen in 2009? If you don't remember it, I don't blame you. Climate conferences are starting to all look alike, and to accomplish nothing. In any case, in 2009 the rich nations committed to providing $100 billion annually from 2020 to help developing countries mitigate and adapt to climate change. That commitment now seems more like a mirage than a reality. Oxfam estimates the real value of climate finance provided by rich countries in 2022 is between $28 billion and $35 billion, with up to $15 billion earmarked for critical adaptation efforts for climate-vulnerable nations.
The challenge of the century
As the G20 meets in Brazil, the world watches with a mixture of hope and skepticism. Me with a lot of skepticism and very little hope. The challenge is titanic: reducing a wealth gap that seems like an abyss, ensuring fair taxation of the super rich and keeping promises on climate finance. It is a battle that will define our century. On the one hand, an elite that accumulates unimaginable riches. On the other, a planet and a population struggling to survive. The G20 has the opportunity to rewrite this history. It remains to be seen whether he will have the courage to do so.
