Public good or private wealth?

Since the international financial crisis of 2007-08, the number of billionaires has doubled worldwide, and their wealth grows by US$ 2.5 billion a day. Meanwhile, 3.4 billion people – almost half the world’s population – live on less than US$ 5.50 a day.

The World Inequality Report 2018 showed that between 1980 and 2016, the poorest 50 per cent of humanity only captured 12 cents of every dollar of global income growth while the top 1 per cent captured 27 cents of every dollar.

Other reports claim that the world’s super-rich are hiding US$ 7.6 trillion from the tax authorities and corporates have stashed large amounts of money offshore.

Together, this deprives developing countries of US $170 billion a year.

The authors of this paper say that getting the richest to pay just 0.5 per cent extra on their wealth could raise enough money to educate 262 million out-of-school children and provide healthcare that could save 3.3 million lives.

A 2015 study in 13 developing countries found that spending on education and health accounted for 69 per cent of the total reduction of inequality. Around 171 million people could escape extreme poverty if children leave schools with basic reading skills.

Public spending on health in India is among the lowest in the world even though the country is a top destination for medical tourism. Infant mortality rates in Uttar Pradesh and Chhattisgarh are higher than those in sub-Saharan Africa.

India has the largest number of people pushed into poverty because of health-related expenses.

In countries like Kenya, the Democratic Republic of Congo and India, poor people are sometimes held as prisoners in hospitals, even chained, until they can settle their health bills.

In India, 80 per cent of payments to the government health insurance scheme go to private insurance providers. Evidence from different states shows that these providers often charge the government for bogus patients, refuse free treatment to poor patients, and suggest unnecessary medication and procedures such as hysterectomies that are among the most profitable.

The unpaid work of women and girls worldwide is worth US$ 10 trillion a year or 43 times the annual turnover of Apple.

Globally, women earn 23 per cent less than men. In Africa and countries like India, Pakistan and Bangladesh, women own only 20 to 30 per cent of the wealth.

The report says that in India, a woman from the ‘lowest caste’ can expect to live almost 15 years less than a ‘higher-caste’ woman.

A 2011 study of schools in rural Uttar Pradesh found that even low-cost private schools were unaffordable for the poorest 40 per cent of families, making girls and children from lower castes and religious minorities unlikely to attend school.

Worldwide, wealth inequality is significantly higher than income inequality, so taxing wealth can help reduce economic inequality and increase government revenue. But many countries have either reduced or failed to implement taxes on wealth. In India there are so many exemptions to net wealth tax that a typical individual pays over eight times less than what they should.

Mukesh Ambani ranks 19th in the Forbes 2018 list of billionaires and is the richest Indian. His residence in Mumbai, a 570-foot building, is worth US$ 1 billion and is the most expensive private house in the world.

Focus and Factoids by Sushmita Iyer.